The three major US stock indices rose by over 1%; Tesla closed up 3.5%, Nvidia rose nearly 3%, surpassing Apple in market capitalization; Trump Media rose nearly 19% in early trading but later fell over 4% at midday; Palantir, a strong performer, closed up 23%; AMD fell nearly 20% after hours; Chinese new energy vehicle stocks surged, with Xpeng rising over 6%. US Treasury yields spiked and then pulled back. The dollar index hit a near three-week low, and the offshore yuan rose over a hundred points to break 7.11. Bitcoin rose nearly $4,000 to break the $70,000 mark before falling back nearly $2,000. Oil prices rose for five consecutive days. Gold turned up after hitting a one-week low.
Written by: Fang Jiayao, Li Dan, Du Yu, Bu Shuqing, Li Xiaoyin.
Source: Wall Street Journal.
The 60th US presidential election voting has officially begun, and the winner will take office in January 2025 for a four-year term. Risk appetite increased on US election day, with European and American stock markets rising. Major US stock indices all rose over 1%, with the Chinese concept index outperforming the US market. Trump Media Technology rose over 18.6% during the session but closed down 1.16%. Investors closed dollar bullish positions, and the dollar fell to a three-week low. The dollar's weakness and the impact of Hurricane in the Gulf of Mexico contributed to a slight rise in oil prices.
The UK bond auction was dismal, while the US October ISM services index exceeded expectations and climbed. US Treasury yields rose continuously during the session, refreshing daily highs; however, in the US stock market, the strong results of the 10-year US Treasury auction and profit-taking by Trump trading caused US bond yields to retreat at the close. Due to election uncertainty triggering risk aversion, gold rose slightly.
According to the latest report from CCTV News, on November 5 local time, the small town of Dixville Notch in New Hampshire, USA, released the voting results of 6 registered voters, showing Harris and Trump tied with 3 votes each. A poll on the 4th indicated that Harris and Trump have similar support rates in key 'swing states' for the US election. Trump is expected to take two to three days to count votes in the crucial swing state of Pennsylvania.
The final value of the US October Markit Services PMI was 55, the lowest since July 2024. The US October ISM services expansion rate reached its fastest in over two years, exceeding expectations and previous values. After the data was released, economic resilience supported US stocks' rise, while US Treasury yields hit daily highs, with the two-year US Treasury yield rising about 5 basis points, refreshing daily highs and approaching 4.24%. Internationally, the Bank of Canada meeting minutes showed concerns that significant rate cuts could change market expectations.
On November 5, Tuesday, as US election day risk appetite increased, all three major US stock indices rose over 1%, with the Dow at one point rising over 1.1% or 464 points. The Nasdaq peaked at nearly 1.5%, the S&P at over 1.2%, and the Russell small-cap index leading the gains at nearly 1.9%. All sectors closed higher, with consumer discretionary, industrials, and utilities leading the gains, while technology and telecommunications sectors also saw significant increases, with materials, energy, and staples lagging behind. Nvidia's market capitalization surpassed Apple's, topping the global list.
All three major US stock indices rose. The S&P 500 index closed up 70.07 points, an increase of 1.23%, settling at 5782.76 points. The Dow, which is closely related to the economic cycle, closed up 427.28 points, an increase of 1.02%, settling at 42221.88 points. The Nasdaq, which is predominantly tech stocks, closed up 259.19 points, an increase of 1.43%, settling at 18439.17 points. The Nasdaq 100 index closed up 1.32%. The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech stocks, closed up 1.36%. The Russell 2000 small-cap index, which is more sensitive to economic cycles, closed up 1.88%. The fear index VIX fell 6.78% to 20.49.
US stocks rose, with small-cap stocks leading the gains.
US stock sector ETFs closed higher across the board. Global airline ETFs rose over 2%, while consumer discretionary ETFs and regional bank ETFs rose nearly 2%. Semiconductor ETFs, banking ETFs, biotech index ETFs, and utility ETFs all rose at least 1.5%, while tech sector ETFs, global tech stock ETFs, and internet stock index ETFs also rose at least 1%.
All 11 sectors of the S&P 500 index rose. The materials sector rose 0.20%, the energy sector rose 0.57%, the staples sector rose 0.69%, the healthcare sector rose 0.75%, the financial sector rose 0.98%, the telecommunications sector rose 0.99%, the real estate sector rose 1.36%, the information technology/tech sector rose 1.46%, the utilities sector rose 1.48%, the industrial sector rose 1.67%, and the consumer discretionary sector rose 1.83%.
On the investment strategy front: Goldman Sachs strategists believe the likelihood of a bear market in the US stock market in the next 12 months is low, as a strong economy will continue to support the stock market. They estimate that even considering election risks, the probability of a drop of over 20% (i.e., entering a technical bear market) is only 18%. The Goldman report indicates that as long as economic growth remains strong, the stock market should be able to absorb rising bond yields. However, Goldman warns of potential market volatility after the election.
The 'Tech Seven Sisters' all rose collectively. Google A rose 0.3%, Amazon rose 1.9%. Apple rose 0.65%, as it is advancing its smart glasses development work, with a plan named 'Atlas' launched last week, although the actual product may take years to be released, analysts say Apple's smart glasses may challenge Meta's Ray-Ban smart glasses. There are also reports that Apple will face the first fine under the EU Digital Markets Act, which could be €1.8 billion (equivalent to $2 billion). Microsoft rose 0.73%, and Meta rose 2.1%. Nvidia rose 2.84%, surpassing Apple in market capitalization again, becoming the world's largest company by market value. Tesla rose 3.54%.
Nvidia has surpassed Apple again to become the world's most valuable company.
Chip stocks mostly rose. The Philadelphia Semiconductor Index closed up 1.69%. The industry ETF SOXX closed up 1.17%. Nvidia's 2x Long ETF rose 5.47%. AMD rose 0.68%, Broadcom rose 3.17%, KLA rose 1.05%, ON Semiconductor rose 1.01%. Arm Holdings rose 2.27%, Qualcomm rose 0.44%. ASML ADR rose 0.79%. TSMC ADR rose 2.19%, and Micron Technology rose 3.7%. Applied Materials rose 2.56%. Intel rose 3.55%, with reports that the US government is considering further aid for Intel.
AI concept stocks saw more gains than losses. AMD closed up 6.42%, but guidance for this season was poor, making it difficult to predict when to release its annual report, increasing delisting risks, and it dropped nearly 20% after hours. Palantir closed up 23.47%, raising its full-year revenue guidance, hitting an all-time intraday high since its US IPO. Dell Technologies closed up 2.78%. Nvidia's holding in AI voice company SoundHound AI rose 5.5%, CrowdStrike rose 2.91%, C3.ai rose 7.05%, Snowflake rose 2.43%, Oracle rose 1.29%, BullFrog AI rose 1.75%, BigBear.ai rose 9.32%, and Serve Robotics rose 3.81%.
The Chinese concept index outperformed the US market. The Nasdaq Golden Dragon China Index closed up 1.63%, rising for two consecutive days by over 1%. In ETFs, the Chinese Technology Index ETF (CQQQ) rose 4.67%. The Chinese Internet Index ETF (KWEB) rose 2.24%. The FTSE China 3x Long ETF (YINN) rose 7.01%. The FTSE A50 futures index fell for consecutive night sessions, down 0.22%, settling at 13,785.000 points.
Among popular Chinese concept stocks, new energy vehicle stocks generally rose, with Xpeng closing up 6.13%, NIO up 2.72%, Li Auto up 3.61%, and Zeekr up 5.05%; other Chinese concept stocks included Fangdd up 1.67%, Trip.com up 1.75%, Alibaba up 0.82%, Baidu up 1.57%, Bilibili up 5.55%, Tiger Brokers up 3.39%, NetEase up 1.44%, JD.com up 0.43%, New Oriental down 0.85%, while Pinduoduo down 0.14%, and Vipshop down 0.07%.
Other key stocks: (1) Trump Media Technology (DJT) initially rose over 18.6% but turned negative, falling over 4% at one point, ultimately closing down 1.16%. The company's net sales in Q3 were $1 million, with a net loss of $19.2 million, resulting in a loss per share of $0.10. (2) Boeing initially rose nearly 1.7% but closed down 2.62%, as the union ended a strike lasting over seven weeks, with 30,000 mechanics receiving a 38% pay raise. (3) Ferrari's US stock closed down 7.36%, with third-quarter deliveries declining.
Traders are focused on US election day, with European stocks rising slightly, but the automotive sector fell over 1.8%, with Ferrari down over 7%.
The pan-European STOXX 600 index closed up 0.06%. The eurozone STOXX 50 index closed up 0.38%. The FTSE Europe 300 index closed up 0.05%. Sectors showed mixed performance, with industrial stocks up 1.2% and automotive stocks down 1.82%. Among the components, Ferrari fell 7.06%, and after Standard Chartered Bank announced a partnership with UK payment company Wise, Wise rose 8.52%.
Germany's DAX 30 index closed up 0.57%. France's CAC 40 index closed up 0.48%. The Netherlands AEX index closed up 0.37%. Italy's FTSE MIB index closed down 0.20%. The UK's FTSE 100 index closed down 0.14%. Spain's IBEX 35 index closed up 0.29%.
US Treasury yields fluctuated significantly during the session, initially impacted by the dismal UK government bond auction, followed by strong US ISM services data, pushing US Treasury yields higher and hitting daily highs; however, due to strong results from the US Treasury's 10-year bond auction, medium- to long-term US Treasury yields spiked and then fell. The winning yield of the 10-year UK bond auction hit a new low since December, with UK bond yields rising over 7 basis points.
US Bonds: At the close, the yield on the US 10-year benchmark Treasury bond turned negative, refreshing the daily low to 4.2808%. At 23:29 Beijing time, after the US ISM non-manufacturing data was released, it briefly rose to a daily high of 4.3636%, stabilizing below 4.4% in the past few days, the highest since July 3. The two-year US Treasury yield rose by 3.52 basis points, settling at 4.1951%. At 23:00, when the US ISM non-manufacturing data was released, there was a significant surge, peaking at 4.2366%, a new high since August 1.
On the news front, on US election day, the bond market was on edge, with the 10-year Treasury yield rising 8 basis points to 4.36%, near a three-month high. The ICE Bank of America Merrill Lynch MOVE index, which measures yield implied volatility, hit its highest level in a year. At the same time, exchange rate volatility also surged, with the cost of hedging euro against the dollar reaching its highest level in over four years. A Morgan Stanley survey of US Treasury clients showed that as of the week of November 4, the net long position of Treasury clients hit a new high since August 12.
European Bonds: At the close, the yield on the 10-year German bond rose 3.0 basis points to 2.425%. The yield on the two-year German bond rose 3.8 basis points to 2.303%. The yield on the 10-year UK bond rose 7.2 basis points. The yield on the two-year UK bond rose 7.9 basis points. The yield on the 10-year French bond rose 1.8 basis points, and the yield on the 10-year Italian bond rose 0.2 basis points.
US Treasury yields spiked and then retreated.
On US election 'Voting Day', the dollar fell again by more than 0.4% to a three-week low. The yen rose above 151.40 against the dollar during the session. The offshore yuan rose for the second consecutive day, with short-term implied volatility continuing to soar:
Dollar: The dollar index DXY closed down 0.42% at 103.451 points, with an intraday trading range of 103.956-103.373 points. The Bloomberg dollar index fell 0.37% to 1253.94 points, with an intraday trading range of 1259.23-1253.41 points.
Some hedge funds adjusted their investment strategies at the last moment before the US presidential election, starting to bet that if Harris wins, the dollar will fall. This is because polls showed Harris unexpectedly leading in Iowa, while Trump was originally thought to have an advantage in that state. Therefore, some funds began to close bullish positions on the dollar and buy call options on the euro and Australian dollar.
Non-US currencies: The euro rose 0.43% against the dollar, settling at 1.0926, breaking through the 200-day moving average for four consecutive trading days (this technical indicator is currently at 1.0870), nearing the 100-day moving average (currently at 1.0941). The pound rose 0.61% against the dollar, settling at 1.3035, continuing to hover around the 100-day moving average since October 22 (currently at 1.2985). The dollar fell 0.13% against the Swiss franc. Among commodity currencies, the Australian dollar rose 0.78% against the dollar, the New Zealand dollar rose 0.59% against the dollar, and the dollar fell 0.53% against the Canadian dollar. The Swedish krona rose 0.23% against the dollar, while the Norwegian krone rose 0.46% against the dollar.
Yen: The yen rose 0.35% against the dollar at the close, settling at ¥151.60, with an intraday trading range of ¥152.54-¥151.34. Japan's largest industrial union, UA ZENSEN, plans to set an overall wage growth target of 6% in the spring wage negotiations of 2025.
Offshore yuan (CNH): The offshore yuan rose 104 points against the dollar at the close, settling at 7.1017 yuan, with an overall intraday trading range of 7.1173-7.1010 yuan. The short-term implied volatility of USD/offshore yuan continued to soar, with overnight implied volatility reaching nearly 30% on Tuesday, setting a closing record high, highlighting ongoing tensions.
Cryptocurrency: The largest cryptocurrency, Bitcoin futures rose 2.88% at the close, settling at $69,630.00. The spot trading price of Bitcoin briefly exceeded $70,500 during the session but then fell back to below $69,000 during US midday trading. The second largest cryptocurrency, Ethereum futures rose 1.83%, settling at $2,424.00.
The day before the official start of voting in the US election, net outflows from US Bitcoin ETFs hit a historic high. Pricing for Bitcoin options on the CME indicates that the 30-day implied volatility for Bitcoin has reached its highest level since August, when the 'Black Monday' market crash occurred. Options pricing suggests that the expected market volatility for Bitcoin on the day after the voting will reach 8%, four times the normal level.
Bitcoin briefly broke $70,000 during the session but then retraced its gains.
Following OPEC+'s announcement to delay production increases by one month, the dollar index fell to a three-week low as traders closed positions ahead of the US election on Tuesday. The dollar's weakness led to lower oil prices in other countries, stimulating fuel demand. Additionally, analysts expect that the tropical storm Rafael, which may upgrade to a hurricane, could reduce US oil production by about 4 million barrels. These factors collectively supported oil prices, which rose over 1.5% at one point, with US oil nearing $73 and Brent oil above $76.
US Oil: WTI December crude futures rose $0.52, an increase of nearly 0.73%, settling at $71.99 per barrel. In early Asian trading, US oil briefly fell nearly 0.3% below $71.30, then continued to rise, with a maximum increase of nearly 1.7% approaching $72.70.
Brent Oil: Brent January crude futures rose $0.45, an increase of about 0.60%, settling at $75.53 per barrel. Brent oil briefly fell over 0.2% to a low of $74.90 in early Asian trading, but then continued to rise, reaching a maximum increase of over 1.5% to break $76.20 during US early trading.
Natural Gas: US December natural gas futures fell 3.99%, settling at $2.6700 per million British thermal units. European benchmark TTF Dutch natural gas futures fell 0.19%, settling at €40.400 per megawatt hour. ICE UK natural gas futures rose 0.14%, settling at 102.600 pence per kilocalorie.
Oil prices rose slightly.
Polls show that Trump and Harris are evenly matched in the US presidential election, with a high likelihood of a controversial outcome. The 'uncertainty of the election' has triggered risk aversion, and the Fed's expected rate cut is favorable for gold prices, with spot gold rising nearly 0.5% during the session to break $2,750.
Gold: COMEX December gold futures rose slightly by 0.25% to $2,753.00 per ounce at the close. Spot gold fell over 0.4% to a low of $2,720 during early Asian trading but then fluctuated higher, reaching a maximum increase of nearly 0.5% to break $2,750 before closing up 0.27% at $2,744.10 per ounce.
Silver: COMEX December silver futures rose 0.54% to $32.7850 per ounce at the close. Spot silver fell over 0.6% to a low of $32.20 in early Asian trading but then fluctuated upward, reaching a maximum increase of over 1.4% to break $32.90 before closing up 0.64% at $32.6593 per ounce.
On the news front, RJO Futures analyst Daniel Pavilonis stated that due to the close race between former Republican President Trump and Democratic Vice President Harris, and the precarious control of the US Congress, investors are particularly uneasy about uncertain or controversial outcomes, especially as the election results may exacerbate volatility. Deutsche Bank noted that if the election results remain uncertain for days or even weeks, gold will benefit from this uncertainty. Exinity Group analyst Han Tan stated that after the election's 'dust settles', gold prices should ultimately reach $2,800. Additionally, the market widely expects the Federal Reserve to cut rates by 25 basis points on Thursday, which also supports higher gold prices.
Among London industrial metals, zinc rose over 2.2%, aluminum rose over 1.5%; copper rose 0.43%, settling at $9,738 per ton. COMEX copper futures rose 0.70%, settling at $4.4630 per pound. Aluminum rose over 1.52%. Zinc rose about 2.24%. Lead fell $5, settling at $2,028 per ton. Nickel rose over 0.72%. Tin rose about 0.62%. Cobalt remained flat, settling at $24,300 per ton.
Aluminum oxide futures main contract rose over 4% during the session, hitting a new high since listing.
