WSJ What’s News - What’s News in Markets: ‘Trump Trade,’ Warner Bros. Streaming Win, Hershey Sours

Episode Date: November 9, 2024

What were the big winners and losers of the so-called Trump trade? And what drove Warner Bros. Discovery to a surprise quarterly profit? Plus, why Hershey cut its guidance. Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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brokerage services provided by FREC Securities LLC, member FINRA SIPC and advisory services provided by affiliate, Frac Advisors LLC, and SEC Registered Investment Advisor. Hey, listeners. It's Saturday, November 9th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week

and the news that drove them. Let's get to it. Welcome back, everybody. We had two big events setting the tone for markets this week. You've probably heard something about them already, right? Tuesday's presidential election and the Federal Reserve's two-day policy meeting. Donald Trump's win powered a big and broad market rally on Wednesday, pushing the Dow to its biggest gain in two years. And we'll get to more of the winners and losers of the so-called Trump trade in a second. Then the Fed announced its latest interest rate decision on Thursday, which, remember, is following September's half-point reduction.

The verdict? A quarter-point cut, which was in line with what many investors were expecting. So all of these developments, lower interest rates plus a Republican presidency bringing the prospect of tax cuts and lighter regulation, are creating an environment that traders see as allowing stocks to continue to run. And they certainly did this week. On Friday, the Dow traded above 44,000 for the first time ever, and the S&P 500 crossed $6,000, with both indexes closing a bit below those marks.

On the week, both indexes gained more than 4%, while the Nasdaq rose more than 5%. Alright, back to the Trump trade. That's what markets have been calling investors' bets that could pay off in a second Trump presidency. And we got to see those trends continue to play out on Wednesday as that second Trump presidency became a reality. First, the big winners. We had the banks, which were lifted by hopes for reduced regulation and higher interest income under the new administration. J JP Morgan Chase's stock climbed 12% to a new all-time high, and Wells Fargo and Goldman Sachs both rose 13%. Then there were the industrials, including equipment makers, domestic steel makers, railroads, and the like. We saw those stocks gaining on the prospect of lighter regulation, as

well as protective tariffs. And of course, there was crypto. Trump has branded himself the pro-crypto candidate and so, with his win, bitcoin prices and crypto link stocks also rallied. Meanwhile, the sectors that were expected to benefit from democratic policies in the event of a Kamala Harris presidency, those were on the decline. And they included clean energy-related industries and electric vehicle companies. Except Tesla, which is led by Trump ally and donor Elon Musk. So Tesla bucked that trend and ended up gaining 15%.

While markets were busy digesting all of the big news of this week, we also had earnings season marching right along, including the latest from Warner Bros. Discovery. The entertainment conglomerate swung to its first quarterly profit in more than two years. That surprise profit of $135 million was driven by better-than-expected growth in streaming subscribers. You've probably heard of the company's two flagship platforms, which are Discovery Plus and Max. On the other hand, its legacy studio business and cable networks weighed on results. The company said that lower box office revenue from this year's releases,

Beetlejuice Beetlejuice and Twisters, didn't match the strong performance by Barbie last year. Thanks to that big boost from streaming, Warner Brothers shares soared about 12% on Thursday. The stock gave back some of those gains Friday, falling 2%, but it ended the week with a gain of about 11.5%. A company whose latest quarter wasn't so sweet was Hershey. The chocolate maker lowered its annual guidance

and missed revenue and profit expectations. Why? Sky-high cocoa prices, which have been eating into its sales. The price of that key chocolate ingredient has been on the rise due to adverse weather hurting the areas where cocoa is grown. That, plus global inflation pushing consumer goods prices higher, made cocoa based candies more expensive than ever in 2024 for Hershey and its rivals. Investors in turn did not have much of a sweet tooth after the report and Hershey shares lost about 2.2% Thursday, notching a weekly decline of 2%. And now you know what's news in markets this week.

You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section. Today's show is produced by Pierre Piedeme with supervising producer Talia Arbel. I'm Francesca Fontana, have a great weekend, and see you next Saturday.