The American stock markets reached new record levels for the second consecutive day during Thursday’s trading, following the victory of Republican candidate Donald Trump in the US presidential election two days ago. The focus has been on the Federal Reserve, which announced a 25-point rate cut in line with expectations, leading to more attention being paid to Fed Chair Jerome Powell’s speech, where he stated that further policy easing is expected and that the US economy is currently very strong. In terms of US companies, major banks traded lower after Wednesday’s sharp gains, while tech giants moved in the opposite direction, trading higher. The US dollar followed the banks’ lead and fell by 1.3 percent to 10.71 kronor after reaching a six-month high post-election. Investors are now looking ahead to December for the possibility of another rate cut, but with Powell’s statement yesterday, the outcome remains uncertain, and future data is needed for a better assessment. The broad S&P 500 rose by 0.6 percent, while the Dow Jones industrial index closed flat, and the Nasdaq composite index traded up by 1.5 percent.
Commodities rose across the board. Oil rebounded after a red trading day due to the US election results, which led investors to sell off oil in favor of the US dollar. Donald Trump’s economic and political agenda has promised a focus on American production and the introduction of new tariffs on imports, which has shaken the oil price as it leaves room for a reduction in US oil exports. WTI crude oil rose by 0.7 dollars to $72.4 per barrel, while Brent crude oil increased by 0.8 dollars to $75.7 per barrel.
Base metals rose unitedly, with copper being today’s winner, climbing by 3.8 percent, followed by zinc and aluminum, which rose by 3.5 percent and 3.4 percent, respectively. Nickel and tin increased by 2.6 percent and 2.1 percent, while lead was today’s loser, falling by 0.4 percent. Gold followed the upward trend of other commodities after Wednesday’s heavy decline of over 3 percent, thanks to a weakened dollar and the Fed’s rate cut. Gold has surged this year as the metal thrives in a low-interest environment and political turmoil, such as the ongoing conflict in the Middle East, reaching new record levels several times recently. Gold increased by $35.8 to $2,694.4 per ounce in Thursday’s trading.
Among individual publicly traded companies in the US, Nvidia saw a 2.3 percent increase, closing at a new record high, while tech giants Amazon, Apple, Meta, and Microsoft all rose by 1.5 percent, 2.2 percent, 3.4 percent, and 1.3 percent. Donald Trump’s social media company, Trump Media & Technology Group, fell by 23.0 percent, while Tesla increased by 2.9 percent. Among reporting companies, Warner Bros surged by 11.8 percent and Under Armour by 23.1 percent.
The US ten-year yield dropped by 10 basis points to 4.33 percent.
Asian markets kicked off the last trading morning of the week with mixed trading, with Japan rising and China falling. The morning started with gains that have now turned downward as the market awaits China’s response to US tariff threats and the details of new stimulus packages. Beijing aims for the economy to grow by 5 percent per year, a goal that seemed impossible a few months ago, but with recent stimuli to support the economy, the country is back on track to achieve the desired growth. In Japan, the stock market is rising but weighed down by the automaker Nissan, which has laid off 9,000 employees and reduced production by a fifth. On the macro front, household consumption in the country has declined by 1.3 percent in September compared to the previous month. The Japanese Nikkei 225 index is up by 0.3 percent at 07:30, while the Chinese Shanghai Composite index is trading down by 0.2 percent and the Hang Seng index is down by 0.7 percent.
On the Stockholm Stock Exchange, the Riksbank lowered the interest rate by 50 basis points to 2.75 percent, and among reporting companies, Lundin Gold reported an EBITDA result of $220 million, compared to $133 million in the same quarter last year, with revenues increasing to $323 million. The Kernell group also reported a rising EBITDA result of $55 million, a 45 percent increase, and revenue of $357 million.
In terms of today’s newly issued recommendations, ABG lowered its recommendation for Sandvik from buy to hold and reduced the target price to 230 kronor (25). SEB raised the target price for Storskogen to 13 kronor (12) and reiterated a buy recommendation, while Handelsbanken upgraded its long-term recommendation for Trianon to outperform with a target price of 35 kronor (34) and changed the short-term recommendation from hold to buy. Carnegie lowered Rugvista and Oncopeptides to 60 kronor (65) and 1.7 kronor (2.5), respectively, and maintained the recommendations of buy and hold.
On the macro front, Friday will be a calm day starting with Statistics Sweden reporting Sweden’s industrial production for September at 08:00, followed by Konsument Klimat announcing the Swiss consumer confidence index an hour later at 09:00. Across the Atlantic, Statistics Canada will release unemployment figures at 14:30, and the University of Michigan will provide inflation expectations at 16:00. The day’s final macro event will be announced at 19:00 by Baker Hughes with its total rig count. Key speeches to watch out for today include the European Central Bank’s McCaul at 10:30, the EU leaders’ summit at 11:00, Bank of England’s member Pill at 13:15, and the Federal Open Market Committee’s (FOMC) Bowman at 17:00.