The Rundown - Trump Victory Sends Stocks, Bitcoin, and the Dollar Soaring

Episode Date: November 6, 2024

Stock market update for November 6, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zaid Admani, and today is Wednesday, November 6th. In today's episode, we tell you about how the markets are reacting to Trump winning the election. There's been some wild moves so far. We also tell you about Apple's warning to investors about their future business. Then stick around to the end of the show to find out how much money was spent on political ads this election season. It was a lot higher than 2020. All right.

Let's go. Yesterday was Election Day in the U.S. And the markets rallied. Both the S&P and NASDAG jumped more than 1%. It was a pretty strong rally. And honestly, I was kind of surprised by this big move. You know, I was expecting stocks to move sideways until after the election results.

But no, markets had a pretty nice rally before the polls closed. So let's talk about the election, because the results seem to be in and Donald Trump is headed back to the White House. Now, we're not here to break down the electoral maps or anything. But I do want to talk about how the markets reacted throughout the night as the results started coming in. Bitcoin was a big winner. It hit record highs last night, hitting $75,000 at one point. You know, Trump embraced crypto during his campaign. So his victory

has the pro-crypto crowd pretty hype right now. On top of that, Donald Trump's media company, which owns Truth Social, was very volatile last night. At one point, the stock was up more than 50% in after-hours trading, and it's currently up around 35% at the time of this recording. Oh, and Tesla is also up like 10% hitting 52-week highs. you know, since Elon and Trump are boys now, Elon Musk campaigned for Trump, and he's expected to play a role in his administration, which has Tesla investors pretty excited.

And overall, looking at the markets, the futures for the S&P and NASDAG are up pretty big this morning. So yeah, pretty strong reaction by the markets for this major event. And what's crazy is that we have another major event coming up this week. Obviously, it's not as big as the election, but the Fed meeting kicks off today and wraps up on Thursday. Jerome Powell and the Fed gang are expected to cut interest rates by 25 basis points.

But I think more importantly, Paul is going to get back on that podium wearing his purple tie and give a press conference about the Fed's decision and answer some questions from reporters. And I got a feeling he's going to get a lot of questions about the next president. The press conference is happening at 2 p.m. Eastern on Thursday, so I'll definitely be tuning into that and recapping what Jerome Powell says on Friday's episode. So make sure you guys catch Friday's episode because there's probably going to be a lot to talk about. Let's run through some headlines. And let's dive deeper into the Trump trade and why stocks are rallying this morning. I know I like to hate on the Dow a lot, but it's hard to ignore it today

because it's up more than 1,200 points right now. I mean, the Dow hasn't had a thousand point move since November of 2022. So it could be a historic day for the Dow. You know, Wall Street is expecting Trump's second term to mirror his first term. So that means tax cuts, deregulation, tariffs, and a deal-making revival. Now, looking back, the S&P 500 jumped 70% during Trump's four years in office. And his pro-growth rhetoric has investors confident that stocks will continue to move higher over the next four years. For example, Trump's proposal to cut corporate tax rates to 15% would increase earnings by S&P 500 companies by 4%.

This is according to Esmits from Goldman Sachs. Now, to be fair, there are some downsides to these tax cuts. Tax cuts could lead to a wider budget deficit. Current estimates show that Trump's tax and spending plan would balloon the U.S. debt by $7.75 trillion over the next decade. This is according to the Committee for a responsible federal budget. But I guess so far investors seem to be okay with the tradeoff. And finally, Trump's America first economic attitude has the dollar climbing as well to its highest

level since July. And no surprise here, but Chinese stocks are taking a hit this morning. Trump has said multiple times that he plans to implement high tariffs, which could impact Chinese businesses. So yeah, initial reaction by the markets seem to be pretty strong. I'm sure we'll be talking more about this over the next few weeks and months. And when Trump officially takes over as president on January 20th. Let's shift gears from the election for a second and talk a little Apple. Apple is warning investors at their future products. could potentially never be as profitable as the iPhone. Apple filed their annual report.

And under the business risk section, Apple says that new products and services may never replace their existing offering and the new products may produce lower revenues and lower profit margin. These are straight up Apple's words. And I don't think this should be that surprising. I mean, the iPhone is probably the greatest product ever created.

Just smartphones in general. You know, Apple's working on some new products. They tried the Apple Vision Pro, which didn't really work. But now they're working on a lightweight version, which is expected to come out in late 20, They also have the Apple intelligence stuff. And I'm sure they're working on some secret AR headsets as well. But as of right now, Apple doesn't think that any of those products will replace the success of the iPhone.

I guess this is good news for Apple's competitors like meta, Google, and Microsoft who've been working on their own AI products and AR headsets. But like, you know, I don't really know how concerning this should be, though, because I don't think smartphones are going away anytime soon. I think we're going to have a smartphone in our pocket for at least another 15, 20 years. And Apple will continue to make a ton of revenue and profit from them. Let's talk about some stocks making moves today. And we're going to be talking about a lot of stocks that are reacting to the Trump victory. Bank stocks are up big this morning as investors are hoping that Trump makes good on the promises that he made during the campaign trail to lower tax rates and reduce regulation in the finance

industry. He also pledged to fire SEC chairman Gary Gensler. On top of that, Trump's policies could make it easier for companies to acquire other companies again. The FTC under the Biden administration was pretty strict when it came to blocking deals. So more M&A activity would also be good for these banks. As a result, banks across the board are up. J.P. Morgan is up 6%.

City Bank is up 8%. Goldman is up 7%. Wells Fargo is up nearly 10%. And Morgan Stanley is up 9%. So big day for banks. On the flip side, solar stocks are getting crushed this morning as investors are worried that Trump's second term as president will hurt investments in clean energy.

And Trump has said on the campaign trail that he would repeal the Inflation Reduction Act, which has been big for pushing investments in clean energy like solar panels through tax credits. If the Inflation Reduction Act does get repealed, solar energy could take a hit. That's why solar stocks across the border down this morning. Solar panel manufacturer,

first solar is down 14%. Other solar companies like Sun Run and Sanova are down close to 20%. I also wanted to mention Super Micro. Their stock continues to be in free fall. It has nothing to do with the Trump victory, but more so about their earnings. They reported earnings last night,

and the numbers weren't so great. Their sales came in below analyst expectations. Super Micro shares are down 15%. in pre-market trading. I mean, this supermicro stock has been in free fall over the last few weeks down more than 40% as they deal with an accounting scandal. I mean, things are pretty bad for them, okay? Their auditor, Ernst & Young, resigned last week.

That's when you know things are bad is when your auditor starts quitting on you. So yeah, they kind of figure this out. Let's wrap the show with a fun fact. Over $12 billion were spent on political ads this election season. That's up 33% more than the 2020 election season. And what's crazy is that $1 billion. alone were spent on political ads within the last week. You know, I'm a big sports fan, and I can definitely feel it

because any time I tried to watch football or basketball over the last few weeks, I mean, I was just getting hit with political ads after political ads. And I don't even live in a battleground state, so I can't imagine what it was like in Pennsylvania or Michigan. But now that the election is over, we could finally watch sports again without hearing the ominous music and narration that we get in those political attack ads. I feel like it's the same narrator and editor doing all these ads.

Well, all right, guys. That's the rundown for today. Hope you guys enjoyed today's episode. Remember, we still have a lot more action this week with the Fed meeting coming up. We're still in the middle of earnings season. I mean, there's a lot going on. We're going to keep doing our thing by recapping the markets and trying to provide a little humor along the way. If you guys enjoyed today's episode, consider giving us a five-star rating on Apple and Spotify. And if you have like 20 extra seconds, consider leaving us a comment on Spotify, leave a review on Apple, vote in today's Spotify poll. All that engagement really helps us out. Thank you guys again for listening. Shout out to Mike. and Connor for all the help behind the scenes, and we'll see you guys back here tomorrow. This is the rundown, your real-time resource for news events and trends in the markets.

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