I’ve been in front of my screens for two hours wondering what I can write. The risk is to say anything nonsense for 4 pages and to learn at 7:30 in the morning that finally, the surprise was total and that is not at all what was supposed to happen that happened. Right now, it’s 5:29 a.m. and Trump is ahead with 230 voters while Kamala is only at 187. The key remains Pennsylvania where Trump seems to have taken the lead. Anyway, Elon Musk already posted a message on X that says: “game, set and match.” It’s difficult to declare Trump’s victory until the “swing states” are counted… But Musk believes in it.
The Audio of November 6, 2024
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Act as if…
So I’m going to just act “as if Trump had won.” It must be said that when we see that he took the lead in Pennsylvania with 51.3% of the votes and 77% of the ballots counted, we can say that things are really getting complicated for Kamala Harris. Not to mention that the Republican is on the verge of winning Georgia and its 16 major voters. Kamala Harris only has to hope to win the last states that have not declared winners and that doesn’t seem easy… In short, I’m not here to play politics, but to talk about financial markets. So let’s talk about finance, but let’s note that the betting site « Polymarket » – gives Trump victorious at 95% probability. If you want to try a very risky move, you can still bet for Kamala and hope for a miracle.
If we are to believe the behavior of the stock markets over the past 24 hours and especially of cryptocurrencies, everyone is betting on Trump and since very early this morning, American futures are soaring and are forecasting an increase in 1.3% at the opening just now. Bitcoin hit $75,000 last night and DogeCoin, dear to Elon Musk, is up 30% since midnight. There is therefore no need to have studied finance to guess that Wall Street has chosen its champion and that we firmly believe in a Trump victory, even if mathematically Kamala can still pull off a hat trick. » at the last minute.
And what do we do now?
So, if we are to believe the latest figures, the USA is preparing to become “Great Again”. It remains to be seen how he will do it, because even if his electoral promises described a new country which will head towards the firmament, a new country where money will flow freely, where wages will increase massively, where employment will increase massively and where inflation will be perfectly controlled even with wages and a job market that are exploding, one wonders what the magic recipe for this will be.
Either way, the markets seem to trust him and bet that nothing more can happen to us. Already before with the senile man in the White House, the world stock markets seemed indestructible, this feeling of “omnipotence” risks becoming even stronger. If we believe the futures and if the projections are valid, the S&P500 should open at its all-time high and then it will be so easy that it will be indecent. Moreover, the JP Morgan strategist declared that in the event of a (confirmed) victory for Trump, it could even be that the FED “waits” to lower rates, just to see if inflation does not start galloping again. than the idea of all Americans rushing to spend money while waiting for their salaries to explode at the end of January.
The challenges
Even if Trump promises us all sorts of wonderful things, he will still have to deal with an economy that is on the brink of collapse and “this way” of entering into recession – yes, I know it’s wrong to say it and it’s It’s a sin to say the word “recession”, but it’s a fact. Trump (or Kamala for that matter) will have to manage a debt that is at an all-time high and will be EVEN higher when he takes power this winter. Not to mention that the job market is in agony and we will have to create these jobs to reverse the trend. Not to mention that he also promised that he would stop the war in Ukraine, calm the Middle East and prevent China from circling Taiwan. As for turning water into wine, multiplying the bread and making paraplegics walk again, he should wait until the midterm elections, so that he has time to sign a deal with God.
But until then we will still have to find solutions and do something to make things happen. As for the stock markets, we nevertheless continue to believe in it. It is currently 6:22 a.m., the race is still close, Kamala Harris could turn the situation around if she wins all the swing states, but it looks like a bad start. As for the key state, Pennsylvania, at the moment Trump is ahead at 50.9% with 86% of the votes counted, but it seems that he is still missing the large urban areas that could change everything. On the other hand, further north, Wisconsin seems close to falling into Trump’s hands. Not to mention that the Senate has officially passed into Republican hands. It even seems that certain “Hollywood stars” who encouraged Americans to vote for Harris are packing their bags to live… Um… In France. Yes because in France, politics works much better.
But the markets were open yesterday…
Let’s take a brief break before concluding. Yesterday the world stock markets were open and all eyes were on the USA. And the American stock markets even more so. There wasn’t a ton of news, but let’s just say the commenters all bought into the assumption that Donald Trump was going to win. Tesla was going back hoping to see Musk in government, he who still has a little time available and then as the economy is going to explode under Trump, we took the opportunity to buy a little bit of Nvidia for good measure. Nvidia which benefited from the explosive speech of Alex Karp, CEO of Palantir on AI. Palantir which exploded by 23% during yesterday’s session, while Nvidia rose by 2.8%, which was still enough for it to become the largest capitalization in the world at the close for the second time in its history. Hopefully this time it lasts more than 24 hours.
While Nvidia popped the champagne right after the bell, we had to endure the release of Super Micro’s numbers. I’m sorry but when we see the communication that the company is putting in place while they have all the media and analysts spitting at them, we really wonder what the problem is internally. While the market was waiting for details on the “internal problem” that caused Ernst&Young to flee, the CFO told us that they are working as quickly as possible to provide answers without giving more details on the problematic situation. In the process, the CEO announces figures below expectations and explains in complete relaxation that customers are “waiting for the new chips from Nvidia to move forward”. And when asked if he plans to retire, he replies: “I will retire, one day”. This is bullshit in the XXL version and traders continue to sanction it. Yesterday evening Super Micro lost another 15% after close and after its “publications”, while the stock had attempted to rebound during the session by climbing 6%. But obviously, it smells very bad and it’s not even the Trump “miracle” that will be able to save the company.
The rest
For the rest, we note that Asia is visibly divided on the idea of a Trump victory. Japan is soaring by almost 3% because the Yen is collapsing following the strengthening of the dollar and Hong Kong is down by more than 2% because “fears of seeing China confront the Republican” are shaking the walk. China does absolutely nothing. Oil is at $70.87, gold is at $2,748 and Bitcoin is hovering around $74,700, just to see what it feels like to be at its all-time high.
In other news, in France, Auchan announced 2,400 layoffs and Michelin will close two factories and lay off 1,200 people. Michel Barnier screams to death by “demanding” to know what they did with public money, when clearly, they did not receive that much. In any case, if he wants an answer to the question, it would be good to call Bruno before he has gone abroad for good. We see that Macron’s policy is really starting to bear fruit in France. Otherwise, there is Toyota which completely missed its quarter and which announces a drop of 20% in its quarterly profits, while Tesla is up 3.5% on “off exchange” platforms, since we are therefore betting on the fact that Musk was right to support Trump and that Tesla will benefit from it.
The sequel and the end
There it is, it’s 7:05 a.m., Kamala Harris’ clan has declared that she will not speak tonight and that she will address the nation tomorrow – later today for us – for now, Donald Trump is winning the key states in the north of the USA – what they call the “blue wall”: Pennsylvania, Michigan, Wisconsin and Minnesota. At 7:08 a.m. Swiss time, 93% of the votes in Pennsylvania are counted and Trump would win with 51% of the votes, which would allow him to take a huge step towards Washington, not to mention that Wisconsin is also in the process of returning to him. A final check on “Polymarket” and we can see that the bets give the Republican winner at 97%.
Today the FED will start meeting and tomorrow we will have Powell’s decision. For the rest of the day, we will continue to count the votes, but it is more than likely that in the next 24 hours we will have a new President in Washington and not a President. We will remember that in Europe there will be plenty of PMI’s and that Novo Nordisk, ARM and Qualcomm will publish their quarterly figures during the day.
We’ll see each other tomorrow – I’d like to wait for Trump to speak – since he should do so as soon as Pennsylvania falls, but we still have to go to work, so hop! We’ll publish and talk about it again tomorrow at the same time and same place.
See you tomorrow !
Thomas Veillet
Investir.ch
“Owning stocks is like having children — don’t get involved with more than you can handle.”
Peter Lynch
