My top 10 things to watch Wednesday, Nov. 6: Election edition
1. Wall Street was heading for a huge open after Donald Trump won the presidential election, per NBC News projections. Dow futures were leading the way higher, soaring 3%, or roughly 1,250 points. Republicans are projected to win control of the Senate. The majority in the House is still too close to call.
2. U.S. bond yields were soaring, meaning that investors were selling Treasurys in favor of riskier assets such as stocks. The 10-year Treasury yield surged to 4.47%, hitting its highest level since July. The bond market was betting Trump’s presidency would increase economic growth and fiscal spending.
3. The Federal Reserve kicks off its two-day November meeting Wednesday. The markets still see a 25-basis-point interest rate cut on Thursday as a lock. But the chances for another 25 in December were less likely after Trump’s win, with a pause given more than 30% odds.
4. The biggest winner of the presidential election result was Tesla, with its shares surging more than 12% Wednesday. CEO Elon Musk campaigned hard for Trump, whose call for China tariffs and anti-union stance would protect Tesla.
5. As for the rest of the “Magnificent Seven” stocks, all of which the Club owns, Alphabet is seen as benefiting because the Justice Department will get a new antitrust boss. Same for Apple on the DOJ, but the iPhone maker still makes too much in China.
6. Amazon is complex: The FTC under Trump won’t be an issue anymore. But Trump used to dislike Amazon over postal issues. So, we’ll see. Possible animus for Meta Platforms but a block of TikTok would help. No animus for Microsoft. Could the software and cloud giant end up being a big winner?
7. Nvidia’s crucial chipmaking partner is Taiwan Semiconductor Manufacturing Company, and it imports a lot of chips from the democratically governed island, which China claims as its own. Is Taiwan protected under a second Trump administration?
8. Winners outside the Mag 7: Less regulation is a big positive for investment banks and commercial banks, though we’re locking in profits in two of our financials into Wednesday’s strength. Crypto is a winner, with SEC Chair Gary Gensler likely to be replaced. Will we see a bitcoin national reserve?
9. More winners: Communication stocks thanks to mergers likely being allowed. Really any industry that needs consolidation could be a big winner. Same goes for steel and old fashion industries. Health insurers will probably see less regulation. As for oil, we may see more drilling, but it could it be too much drilling?
10. Many losers. Solar and wind energy are huge losers. So is anything with major exposure to China. Anything Mexico, too. The anti-bitcoin crowd also is in this camp.
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