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Markets Update: Major stock indexes on Wall Street reached all-time highs, with Tesla experiencing a notable increase. The dollar strengthened, while the euro weakened by 2%. Treasury yields surged, with the 30-year yield rising by as much as 20 basis points. The Mexican peso reached its lowest value in two years.
Global Markets Roundup: 6 November 2024
FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!
Wall Street reached record highs on Wednesday, with major stock markets globally experiencing surges. Bitcoin also reached an all-time high, while the dollar saw its largest one-day increase in four years following the election of Donald Trump as U.S. president. Trump's clear victory led to a drop in long-dated Treasuries and a resurgence of the "Trump trade," as market yields decreased in anticipation of his promised tariff hikes, which are expected to raise the U.S. deficit and inflation levels. This could potentially result in the Federal Reserve cutting interest rates by a smaller margin than previously anticipated. Despite reports and polls suggesting a closely contested election, Trump, aged 78, secured a strong win in Tuesday's election.
The VIX, known as "Wall Street's fear gauge," plummeted by 21% as investors embraced the clarity of the election results and eagerly invested in high-risk assets. The S&P 500 Index SPX surged by 2.4%, the Dow Jones Industrial Average by 3.4%, and the Nasdaq Composite by 2.7%, all reaching new record highs on Wednesday. The MSCI index for global stocks EURONEXT:IACWI also rose by 1.3%. Tesla's TSLA shares skyrocketed by 13.6% after Elon Musk, the billionaire CEO, emerged as a key supporter of Trump during the final stage of his 2024 campaign. Investors seemed to be banking on Tesla benefiting from Musk's relationship with Trump, who had proposed creating a government efficiency commission led by Musk to reduce federal spending. Trump Media & Technology Group's DJT shares climbed by 3.6% to $35.10 after surging by as much as 42% overnight. The stock had dropped by half since reaching a record high in March. European shares, which had previously risen, later declined by 0.5% SXXP. Chinese stock markets initially rallied to near one-month highs in anticipation of policy decisions in Beijing, but Chinese blue chips (3399300) later leveled off, and Hong Kong stocks (HSI) dropped by over 2%.
In the foreign exchange markets, the DXY dollar index surged by 1.6%, marking its strongest performance since March 2020. On the other hand, Bitcoin, represented as BTCUSD, notably excelled with a 9% increase, hitting a record high of $75,459 for the day. It is noted that Trump shows more overt backing for cryptocurrencies in contrast to Vice President Kamala Harris, the Democratic candidate. The euro weakened due to potential tariffs and the increasing gap between U.S. and European interest rates. It declined by 1.7% to $1.0740 against the dollar EURUSD, marking its largest daily drop since the Brexit referendum in 2016, surpassing the 1.3% decline in the British pound (GBPUSD). Meanwhile, the dollar surged by 1.9% to 154.43 Japanese yen (USDJPY) and rose by 1.4% against the offshore yuan (USDCNH) to 7.1969 yuan. This was attributed to reports of Chinese banks selling dollars to stabilize the yuan's depreciation. China faces significant tariff risks, with its currency particularly sensitive to market fluctuations, as indicated by its high implied volatility against the dollar (CNHSWO=). In Mexico, the peso (USDMXN) briefly fell to 20.8038 per dollar, the lowest since August 2022, marking a more than 3% decline from the previous close - the largest drop since the country's summer election turmoil. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD
In commodities, the surge in the dollar caused oil prices, along with other commodities, to increase in cost when purchased in different currencies. U.S. crude CL1! inched up by 0.2% to $72.14 per barrel, whereas Brent BRN1! declined by 0.4% to $75.17. Gold prices experienced a 2.8% decrease, reaching $2,668.26 per ounce GOLD, after reaching a recent all-time high of 2,790.15. In soft commodities, cocoa, sugar, and coffee futures on ICE experienced a decline on Wednesday due to a widespread drop in commodity markets, attributed to the sharp rise of the dollar after Donald Trump was elected as U.S. President.. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team