Trump propels markets to new record highs 07/11/2024

HOT stories for today

Stocks on the move:

• Coinbase (COIN) shares soared over 26%, marking the crypto exchange’s best day since its direct listing in April 2021, when it jumped 31% from its initial reference price on its first day as a public company.  
• Super Micro Computer (SMCI) saw its stock tumble 24% after the computer server manufacturer provided December quarter revenue guidance between $5.5 billion and $6.1 billion, falling short of analyst expectations.  
• Qualcomm (QCOM) impressed Wall Street on Wednesday with a strong forecast for the current quarter and revealed a $15 billion increase in its share buyback program, pushing its stock up 6.3% in after-hours trading.
• Arm Holdings Ltd. (ARM) outperformed expectations across its business segments in the latest quarter; however, this solid data wasn’t enough to buoy its stock, which slipped 5% lower in after-hours trading on Wednesday.

Watchlist for today: QCOM, ARM, LYFT, DJT, MRNA, SMCI, COIN, BA

Markets & today's action:

• Asian shares rebounded on Thursday following record highs in U.S. markets, as investors weighed the potential economic impact of Donald Trump’s return to the White House. Attention has now shifted to the Federal Reserve's upcoming decision on interest rates, which is expected later in the day. European markets are set for a mixed open as investors digest Trump’s election victory and political shifts in Germany, along with anticipated policy moves from the U.S. Federal Reserve and the Bank of England. 
• Meanwhile, stock futures were nearly flat on Wednesday night after a strong rally, with traders closely watching for the Fed’s interest rate decision and Chair Jerome Powell’s press conference on Thursday afternoon. According to CME Group’s Fed Watch tool, futures markets are fully pricing in another rate cut, marking a second consecutive reduction after the September decrease, the first since 2020.
• Ahead of the Fed announcement, traders will also track jobless claims and wholesale inventory data. Thursday’s earnings reports include results from Moderna (MRNA) and Warner Bros. Discovery (WBB) before the market opens, followed by Block (SQ), Pinterest (PINS), and Rivian (RIVN) later in the day.

Bitcoin

• Bitcoin surged to a new peak of around $76,500 on Wednesday afternoon, holding steady at about $75,300 by evening. This upward momentum gave the cryptocurrency a notable boost of over 9% for the day. Bitcoin’s market cap now represents over half of the cryptocurrency market, highlighting its growing dominance and investor demand.
• Over the past month, Bitcoin has shown solid growth, and its increasing volume and open interest suggest rising confidence among investors. With steady trading activity and strong institutional interest reflected in spot Bitcoin ETFs seeing billions in volume, the trend signals potential shifts in liquidity and price expectations across the crypto landscape. With a 0.25% rate cut widely expected this week, traditionally favoring assets like Bitcoin by reducing the dollar’s value, investors are left asking: what comes next for Bitcoin? Polymarket odds show a 97% chance of a 25 basis point cut, a minimal 1% chance for 50 bps, and even lower odds for a larger move. This potential cut could further boost demand for Bitcoin as investors seek alternatives to traditional assets. However, with BTC already showing strong growth, could this be the catalyst that pushes it to new highs?
  Watchlist: Bitcoin: 70 000-76 500, Ethereum: 2380-2885 Solana: 155-192

Forex

• The Japanese Yen (JPY) gains ground against the US Dollar (USD) as the European session approaches on Thursday, fueled by speculation that Japanese authorities might support the currency. Alongside a slight dip in the USD, these factors apply downward pressure on the USD/JPY pair. However, a substantial recovery for the Yen from its Wednesday low—its weakest since July 30—seems uncertain given the ambiguity surrounding the Bank of Japan's (BoJ) plans for future rate hikes.
• Meanwhile, the EUR/USD stabilized at around 1.0740 in Thursday's Asian session after a nearly 2% drop the previous day. Could further downside be on the horizon? The Euro might face additional pressure as the USD stands to gain strength from “Trump trades” following the Republican victory in the recent US election.
  Watchlist: EUR/USD: 1.0680-1.0950, USD/JPY: 151.20-154.70

Basic Materials

• Oil markets saw sharp swings on Wednesday, with Brent crude dipping to $73.53 before rebounding to $75.91 after Donald Trump’s election win. Wall Street is concerned that Trump’s pro-oil policies could impact global supply, while Citi analysts warn his approach may pressure prices downward. Standard Chartered believes OPEC+ will dictate oil’s trajectory, countering fears of oversupply by adjusting output based on market needs. Recent OPEC+ signals suggest a flexible price stabilization approach, including delayed planned production increases until 2025.
• Gold prices (XAU/USD) continued to decline for a second straight session on Thursday, pressured by a strengthening US Dollar (USD) following former President Donald Trump’s election victory. The appeal of gold as a safe-haven asset is waning as market optimism rises alongside “Trump trades.” The clarity around the election outcome has eased concerns of a contested result, further diminishing demand for gold and contributing to its ongoing losses. 
  Watchlist: GOLD 2640-2790, US Oil: 66.70-72.80

The TEFS Analyst team wishes you a successful day!