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Trump wins key swing states

All eyes were on vote counting in the US, as former US President Donald Trump secured victories in the key battleground states of North Carolina and Georgia on Tuesday, according to several media outlets. That greatly narrows Vice President Kamala Harris’s potential paths to victory. At the time of publication of the LGT Navigator, Republicans also appeared to have taken the Senate and had a lead in the House of Representatives. The US dollar rose versus other major currencies, US stock futures shot up and the Treasury yields were higher across the curve.

Data
Autore
Shane Strowmatt, LGT
Tempo di lettura
5 minuto

Trump

At the time of publication, Trump had 246 Electoral College votes, compared to Kamala Harris' 182, with 270 needed to win the presidency. The only likely path to victory for Harris appeared to be taking the swing states of Michigan, Pennsylvania and Wisconsin, but early vote counting showed Trump ahead in those states. Exit polls suggested Trump picked up support among Hispanic voters and those concerned about the economy in this election. Meanwhile, Republicans have gained a majority in the US Senate, flipping seats in West Virginia and Ohio, while Republicans were making gains towards retaining their majority in the House of Representatives. A Republican sweep - a scenario in which the Republicans control the White House, Senate and House of Representatives - would likely facilitate the execution of Donald Trump’s proposed policies and lead to increased spending.

Markets double down on Trump trades

Markets were interpreting the early election results as an opportunity to lean deeper into so-called Trump trades, which had already become popular over the course of the month of October. The US dollar strengthened significantly, with the Dollar Index climbing 1.6%. US Treasury yields rose across the curve, with the two-year yield near 4.3% and the ten-year yield above 4.4%. Bitcoin - which Trump had supported during his election campaign - surged, trading around USD 75,300 on Wednesday. However, gold - which is also been considered a potential beneficiary if one party pulls off a sweep of the Senate, House and presidency - was trading slightly lower around USD 2720 per ounce.

US equities climbed while voting was ongoing on Tuesday. The Dow Jones Industrial Average rose 1% to close at 42,221.88 points, while the S&P 500 gained 1.2%, finishing at 5782.76 points. The tech-heavy Nasdaq-100 advanced 1.3% to 20,227.46 points. Futures for the major indices all shot up early Wednesday.

Macroeconomic data released on Tuesday supported stock gains. The US services sector saw its strongest expansion since July 2022, with the ISM Services Purchasing Managers’ Index (PMI) rising to 56% in October, up from 54.9% in September. The increase was driven by a significant rise in the Employment Index to 53% and the Supplier Deliveries Index to 56.4%.

Asia-Pacific stocks mixed amid global cues

Stocks in the Asia-Pacific region were mixed on Wednesday as the US election results trickled in. Japan’s Nikkei 225 was trading 2.2% higher. The Bank of Japan's September monetary policy meeting minutes, released on Wednesday, revealed members' consensus on raising interest rates if economic and price growth align with expectations. Korea’s Kospi was down 0.7% and Australia’s S&P/ASX 200 rose 0.8%. Hong Kong’s Hang Seng Index dropped 2.2% and mainland China’s CSI 300 was essentially flat as China's National People's Congress continued its five-day session, with investors closely monitoring for potential economic stimulus measures. The head of the People’s Bank of China reiterated plans to maintain supportive monetary policy during a meeting on Tuesday.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Ahold Delhaize, Albemarle, Barry Callebaut, BMW, Commerzbank, CVS Health, Enel, Fresenius SE, Henkel, Novo Nordisk, QIAGEN, QUALCOMM, Siemens Healthineers, Take Two, TeamViewer, and Vonovia.

Economic data in focus: German factory orders, German Composite Purchasing Managers’ Index, euro-area Composite Purchasing Managers’ Index, European Central Bank President Christine Lagarde speaks.

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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