ADDX Go Market Morning Wrap - 11th Nov
Market Key Focus
US Market
- Markets
On Friday, November 8, throughout the week, the "Trump deal" plus the Federal Reserve's interest rate cuts supported the three major U.S. stock indexes to new highs, with the Dow Jones Industrial Average and the S&P 500 recording their best single-week performance in a year.
On Friday, the Dow Jones Industrial Average broke through 44,000 for the first time, and the S&P 500 once rose above 6,000 to hit its 50th high of the year, but the Nasdaq barely closed higher but still hit a new high, dragged down by the weakness of chip stocks and most technology stocks.
Boosted by financial stocks, the Russell small-cap index closed up 0.71% on Friday and rose 8.57% for the week, outperforming other stock indexes and recording its best single-week performance since the outbreak of the covid in April 2020.
- Stocks
Industrial and materials sectors lagged behind, with the former affected by GE Aerospace's 9.05% drop and Lockheed Martin's 6.12% drop, and the latter affected by Sherwin-Williams' (SHW) 5.34% drop.
- Treasury
Although Trump's victory supported a surge in U.S. Treasury yields on Wednesday, the 10-year Treasury yield fell by more than 8bp this week due to traders closing "Trump trades", a strong 10-year Treasury auction, and the Fed's rate cut. However, the two-year Treasury yield rose by about 5bp, a cumulative increase of more than 4bp this week.
- FX
The "Trump deal" ignited the dollar, and the dollar index DXY rose by more than 0.6% this week, rising for six consecutive weeks, the longest consecutive week since the end of June
Bloomberg Dollar Index rises for sixth straight week
Asian Market
- Markets
The Nasdaq Golden Dragon China Index once fell by more than 5%. Among ETFs, the FTSE China 3x Long ETF (YINN) once fell by more than 13.8%
- FX
The offshore RMB fell by about 660 points throughout the week, approaching 7.21.
The yen rose 0.31% against the dollar in late trading to 152.63 yen, and has risen 0.24% this week.
European Market
- Markets
Market concerns about Trump's implementation of the tariff plan dragged down European stock this week. The pan-European STOXX 600 index closed down 0.65%, down 0.84% this week for the third consecutive week of decline.
The Eurozone STOXX 50 index closed down 1.01%, down 1.54% this week, falling for four consecutive weeks, the longest consecutive weekly decline since the end of October last year.
- Stocks
Mining stocks fell 4.2% and led the decline. After issuing its second full-year profit warning in a month, the share price of British housebuilding giant Vistry plummeted 15.51%.
- Treasury
The 10-year German bond yield fell 7.8 bp to 2.367%, a cumulative decline of 3.8bp this week. The 10-year UK bond yield fell 6.3bp, a cumulative decline of 1.0bp this week.
- FX
The euro fell 0.81% against the U.S. dollar to 1.0719, and fell 1.05% this week;
The pound fell 0.52% against the U.S. dollar to 1.2920, and fell 0.04% this week
Cryptocurrency Market
Bitcoin broke through $80,000 for the first time,
And thanks to strong demand for U.S. Bitcoin ETFs and the Federal Reserve's interest rate cuts, Bitcoin has risen about 91% from its lows this year. After Trump's victory, Bitcoin hit a new high, with gains exceeding returns on investments such as stocks and gold.
Macro
- The preliminary reading of the University of Michigan Consumer Confidence Index in November was 73, a seven-month high, and short-term inflation expectations fell to a nearly four-year low. Investors generally believe that once the Trump administration implements policies such as deregulation, increased mergers and acquisitions, and tax cuts, it will be beneficial to economic growth and risky assets.
- The market expects that the huge federal government deficit will continue to grow, faster economic growth and new tariffs will push up inflation. In addition, on Thursday, Federal Reserve Chairman Powell hinted that he was open to suspending interest rate cuts and that it might be appropriate to slow down interest rate cuts in the future. As a result, the Fed's interest rate cut path is now more uncertain than the week before the election. The market currently expects a 64.9% chance of a 25bp rate cut in December. Looking ahead, the market is paying attention to the US CPI and retail sales data next week.
Stocks to Focus
- Trump Media Technology (DJT) closed up 15.22% as Trump said he has no plans to sell his shares