Daily Digest: Wednesday 6th November
Equities
US election results rolled in overnight revealing that Republic nominee Former President Trump is to take control of the White House once again in January 2025. Early exit poll results came without any major shocks, but may have contributed to equity sell-offs experienced in China, as the Shanghai Composite (¥SSE) fell 3.18 points (0.094%) to 3,383.81. This selling pressure is likely to increase in the coming days as Trump’s campaign has been heavily focussed around protecting US businesses, and introducing tariffs on foreign imports. Thus sparking fears of a return to hostility between the two nations in a similar format to the US-China trade wars started in 2018. Trading on the Japanese Nikkei 225 (¥N225) shared a vastly different picture as the index rose 1,005.77 points (2.61%) to 39,480.67.
European traders had a far clearer view of the election outcome, yet despite early gains, the UK’s FTSE 100 (FTSE) fell 5.71 points (0.070%) to 8,166.68. A late turn in momentum may be explained by a shift in the attention of traders from today’s elections to the Bank of England’s November interest rate decision tomorrow. The general consensus amongst analysts is for officials to continue the rate cutting cycle, voting on a 25 basis point move resulting in the bank rate falling from 5% to 4.75%. Any deviations from this expectation will likely result in UK equities experiencing further light sell-offs. Losses on the continent were sharper as the Pan-European STOXX 600 (STOXX) fell 2.75 points (0.54%) to 506.78.
The return of President Trump to the White House was welcomed by US traders and investors alike as the three major indexes all broke record highs at their respective intraday peaks. The Dow ($INDU) experienced the strongest gains rising 1,508.05 points (3.57%) to 43,729.93, followed by the Nasdaq 100 ($NDX) which rose 544.29 points (2.95%) to 18,983.46, and the S&P 500 ($SPX) which rose 146.28 points (2.53%) to 5,929.04. Similarly to traders in the UK, there will be a quick turn around tomorrow morning as traders briefly shift their attention from politics back to economics as the Federal Reserve present November’s interest rate decision. Analyst predictions currently indicate that the Fed will also resume the rate cutting cycle, reducing the US bank rate by 25 basis points from 5% to 4.75%.
What to Watch Tomorrow
UK Interest Rate Decision
BOE Monetary Policy Statement
US Interest Rate Decision
Federal Reserve Monetary Policy Statement
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice