To The Moon

Trump returns to the White House with a landslide victory; U.S. tech giants and major bank stocks soar to all-time highs.

🇺🇸 S&P 500: +2.53% 📈

🇺🇸 Nasdaq: +2.95% 📈

🇪🇺 Stoxx 600: -0.54% 📉

🇯🇵 Nikkei 225: +2.61% 📈

🇭🇰 Hang Seng: -2.23% 📉

🇨🇳 CSI 300: -0.50% 📉

🇸🇬 Straits Times Index: +0.62% 📈

U.S. stock market performed strongly, with the S&P 500 and Nasdaq Composite soaring 2.5% and 3.0%, respectively, driven by broad market gains as the Republican Party took control of the Senate with a decisive victory. Many well-known stocks hit new all-time highs, and Trump also secured a landslide victory, surpassing polling predictions by winning key swing states.

Asia-Pacific markets underperformed, with the Hang Seng Index and CSI 300 falling 2.2% and 0.5%, respectively. Market sentiment turned cautious ahead of the closely-watched U.S. election. Investors grew increasingly concerned about potential protectionist policies and the negative spillover effects from efforts to limit alliances with China in key high-growth sectors.

💡 Upcoming Events: 💡

Thursday: U.S. unemployment claims

By the end of the week: U.S. Federal Funds Rate, FOMC statement, U.S. preliminary Michigan Consumer Sentiment Index, Michigan Inflation Expectations and unemployment rate.

💡 Key Things to Know Today: 💡

1. Market expectations for a rate cut next year have moderated after Trump's victory. While the possibility of a 25 basis point cut in November and December remains high, the Fed is now expected to pause rate cuts after two more reductions in the first half of 2025, bringing rates down to the 3.75%-4% range.

Fed rate cut

2. The S&P Steel Sub-Industry Index  surged 11% intraday, as market speculation grew that Trump's victory would trigger a new round of protectionism and reshape global trade rules. The index includes companies like United States Steel Corp. $U.S. Steel(X)$  , Nucor Corp. $Nucor(NUE)$ , Cleveland-Cliffs Inc. $cleveland-cliffs(CLF)$ , Steel Dynamics Inc., and others, all of which saw stock prices rise by as much as 14%. The four major U.S. steelmakers all gained over 10%. Trump had previously promised to impose higher tariffs on imports that threaten domestic industrial capacity and jobs.

US Steelmakers

3. Energy Transfer LP $Energy Transfer LP(ET)$  rose 3% intraday, welcoming Trump's return. Trump is a strong advocate for oil and gas, and the company stated that his return would bring "a breath of fresh air," with more hopes for deregulation and enhanced pipeline construction.

Energy Transfer

4. Japanese stock index futures rose, as the yen continued its downward trend. Trump's victory raised expectations that he would push policies aimed at economic growth, which would keep U.S. interest rates high. The yield differential continues to favor the dollar, which has suppressed the yen's short-term outlook.

Japanese stocks

5. Bond financing in China's real estate sector increased 3.2% YoY, reaching 29 billion RMB, supported by policies aimed at helping the liquidity-stricken sector. Measures to lower financing costs, such as reducing the reserve requirement ratio and encouraging banks to lend, have somewhat benefited corporate financing. However, as the monthly increase was -32.4%, the positive growth partly stemmed from a low base effect, indicating there is still room for growth.

✅ Key Takeaways:

The U.S. election results favored the "Trump trade," with Tesla benefiting from Elon Musk's support and Bitcoin rising on expectations of regulatory easing. However, U.S. Treasury yields rose to 4.5%, partly due to expectations that higher tariffs will inevitably be passed on to consumer prices, and because Trump's spending promises may increase government debt. Trump's pledges to raise tariffs, cut taxes, and reduce regulations have reignited market risk appetite.

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