ADDX Go Market Morning Wrap - 8th Nov

Market Key Focus

US Market

- Markets

The day of the "Fed Rate Cut", the S&P 500, Nasdaq, Dow Jones, Nvidia, and Amazon all reached new intraday highs, with the Nasdaq leading the charge by closing up over 1.5%.

Chip stocks, AI-related stocks, and tech stocks saw significant gains. The telecommunications, technology, and consumer discretionary sectors were among the top performers, while financials, industrials, and energy were the only sectors to decline. The Philadelphia Bank Index, which had surged over 10% the previous day, fell back to close down 2.68%.

- Stocks

Meta closed up 3.44%, while Tesla gained 2.9%, building on its 3.54% rise on U.S. Election Day (5th) and a 14.75% surge on "Trump's Election Victory" day (6th).

Google A climbed 2.4%, Nvidia increased by 2.25%, Apple added 2.14%, Amazon rose 1.43%, and Microsoft was up 1.25%.

- Treasury

The Federal Reserve's interest rate cut led to the yield on the 10-year U.S. Treasury falling by over 10 basis points on the day of the rate cut.

Jeffrey Gundlach, known as the "New Bond King" and founder of Doubleline Capital, anticipates that the Federal Reserve will lower interest rates by an additional 25 basis points in December.

- FX

The Federal Reserve's interest rate cut, combined with profit-taking from the "Trump trade," caused the U.S. dollar index to drop nearly 0.5%, after hitting a four-month high on Wednesday

Dollar falls, wiping out most of election gains

Asian Market

- Markets

Asia-Pacific stock indices showed mixed results, with the Indonesian and Indian stock indices dropping more than 1%, and the Nikkei 225 closing down 0.3%.

- Stocks

The Nasdaq Golden Dragon China Index surged over 3.7% at one point. Among ETFs, the Direxion Daily FTSE China Bull 3X Shares ETF (YINN) soared more than 13.7%, the Invesco China Technology ETF (CQQQ) rose over 5.2%, the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) gained more than 5%, and the KraneShares CSI China Internet ETF (KWEB) climbed over 5%. Meanwhile, the gains in the FTSE China A50 Index Futures have narrowed to 0.32%.

- FX

The yen surged over 1% against the dollar by the end of trading, breaking past the 153 mark.

The offshore RMB gained 621 points against the dollar, closing at 7.1415, effectively recovering half of the losses since "Trump's Election Day." Traders are betting on a short-term appreciation of the RMB.

European Market

- Markets

The FTSE 100 index in the UK fell by 0.32% after the Bank of England warned that the budget plan could drive up inflation, despite a general rise in European stocks.

Meanwhile, Germany's stock market gained 1.7% following the Chancellor's dismissal of Finance Minister Lindner, which brought an end to the three-party coalition government.

Treasury

Following the dismissal of Germany's Finance Minister Lindner, there are market concerns about a potential increase in Germany's debt issuance. For the first time in history, a key market indicator showed that the yield on Germany's 10-year government bonds surpassed the swap rate for the same maturity, signaling increased worries about bond supply. Additionally, the yield spread between 30-year and 2-year government bonds widened, approaching its highest level in over two years, further highlighting growing fiscal concerns.

- FX

The euro rose 0.3% against the dollar to $1.0764, after dropping to a low of $1.06828 on Wednesday, marking its first time reaching this level since July 27.

Cryptocurrency Market

Bitcoin, the largest cryptocurrency by market value, initially declined but later rebounded, closing above $76,000. Its futures dropped 0.5% to $76,500.

Meanwhile, Ethereum futures, the second-largest cryptocurrency, surged over 7%, climbing above $2,900.

Bitcoin fell first and then rose, reaching the highest point of $76,000

Macro

1. The Federal Reserve cut interest rates by 25 basis points as anticipated, removing language about "gaining confidence in the fight against inflation" from its statement, which analysts interpret as a sign of openness to pausing further rate cuts. During the press conference, Powell also indicated that it might be appropriate to slow down rate cuts in the future.
2. Recent U.S. economic data had a minimal impact on the market. Last week, initial jobless claims in the U.S. slightly rose to 221,000, which was below the expected 222,000. Traders have adjusted their expectations for rate cuts, with the likelihood of a 25 basis point cut by the Federal Reserve in December increasing from 29.5% to 72.9%, while the probability of a 50 basis point cut has dropped to zero.
3. The Bank of England has cut interest rates by 25 basis points to 4.75% as anticipated. The Governor cautioned that the £40 billion fiscal budget could heighten inflation risks, indicating that rate cuts won't be too rapid or substantial.
   

Stocks to Focus

1. Moderna initially surged over 9.4% but ended the day down 2.95%, as its third-quarter revenue surpassed expectations and it posted an unexpected profit, thanks to robust COVID-19 vaccine sales.
2. U.S. electric vehicle maker Lucid Group's stock climbed more than 6% in after-hours trading, with third-quarter losses coming in better than anticipated.
3. Airbnb expressed optimism about the upcoming holiday season (Thanksgiving and Christmas), citing "strong demand," which led to its stock jumping over 13% in after-hours trading.

Tracking Gold

The weakening of the dollar and U.S. Treasury yields bolstered precious metals, with spot gold recovering more than half of its losses from "Trump's Election Day." At one point, it surged over 1.9%, climbing a

bove $2,710.

Gold rebounds on weaker dollar, back above $2,700

Tracking Oil

Traders assessed the impact of potential changes in oil production and geopolitical risks if Trump returns to the White House, while a weaker dollar helped lift international oil prices by over 0.9%.

WTI December crude oil futures increased by $0.67, or more than 0.93%, closing at $72.36 per barrel.