Trump-linked equities continue to shine

General market commentary

US equity markets continued their rally, with the S&P 500, Nasdaq, and Dow Jones Industrial Average hitting record highs, buoyed by strong performances in consumer discretionary and financial sectors. However, gains were tempered by losses in tech, notably in the semiconductor space, due to concerns over U.S.-China trade relations. The dollar strengthened, reaching a four-month high, driven by optimism around domestic economic policies that could spur growth through tax cuts, deregulation, and tariffs. Meanwhile, bond markets were closed for Veterans Day.

European markets saw modest gains amid lingering concerns over China’s weaker-than-expected stimulus measures, which have weighed on Asian market sentiment and demand expectations. Meanwhile, oil price declines add to investor concerns for those with energy market exposure or reliant on stable Chinese demand. On this subject, JPMorgan anticipates renewed interest in Chinese equities later in November, driven by targeted fiscal support for sectors like consumption and infrastructure. In contrast, UBS suggests a defensive approach, favouring high-yield, state-owned sectors due to near-term risks from delayed stimulus and potential trade tensions under Trump.

Looking ahead, investors will closely watch U.S. inflation data and Fed signals to gauge the trajectory of rates, as the outcomes could significantly affect global flows, currency valuations, and emerging market sentiment.

Latest market update

U.S. equity futures are expected to open slightly lower, with caution ahead of key inflation data, while European markets are likely to see a modestly positive open following strong gains earlier in the week.

Most Asian equities traded flat to lower on Tuesday, with Chinese shares struggling as recent fiscal measures from Beijing disappointed, and focus shifted to upcoming U.S. inflation data. Japan was an outlier, with the Nikkei 225 and TOPIX rising on strong earnings and a weaker yen, while South Korea’s KOSPI and Australia’s ASX 200 posted declines.

The Dow Jones surged over 300 points on Monday, led by gains in JPMorgan Chase and Goldman Sachs, while the S&P 500 rally slowed and the Nasdaq dipped 0.3% as major tech shares fell. Bank shares rose, with Bank of America and Citigroup up over 2%, while crypto equities soared, including Coinbase up 21%.

The Euro Stoxx 50 started the week strongly, rising over 1%, led by gains in the construction, materials, and industrial sectors as investors assessed the potential impact of Trump’s presidency. Notable performers included Continental, with shares up 10% on strong earnings, and defence shares, which saw gains of up to 4.4%.

The dollar index rose above 105.6 to a four-month high, driven by expectations of Trump’s pro-growth policies, which may restrict Fed rate cuts. Inflation concerns grew with Trump’s tariff and immigration plans, while the euro and yuan slid to multi-month lows.

Oil prices remained flat in Asian trading on Tuesday after steep losses, as underwhelming Chinese stimulus measures raised concerns about demand, while the dissipation of tropical storm Rafael eased U.S. supply fears.

Bitcoin approached $90,000, driven by expectations of a crypto-friendly Trump administration, while crypto mining shares and altcoins like ether and dogecoin also saw significant gains.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

AbbVie’s shares fell sharply after its phase 2 trials for schizophrenia treatment emraclidine missed their primary endpoint. Meanwhile, shares of rival Bristol-Myers Squibb, which was recently introduced in our portfolios, rose following the FDA approval of its schizophrenia drug, Cobenfy.

Baidu introduced this morning new AI applications, including a text-to-image tool, no-code software development, and AI-powered glasses, showcasing its shift toward commercialising AI through its Ernie platform.

Continental raised its Q3 profit outlook, with shares rising 5.6%, despite cutting its full-year sales forecast due to weak industrial demand in Europe and North America. The company reported a stronger-than-expected core profit, driven by cost-cutting and price discipline.

Dell Technologies’ price target was raised to $154 by Morgan Stanley, driven by strong growth in its AI server business, which is expected to generate $20.6 billion in revenue by fiscal 2026.

Pinterest's share rating was upgraded to "Outperform" from "Neutral" by Wedbush analysts, who raised their price target due to the company's effective user engagement and monetisation strategies, with a projected 27% CAGR in adjusted EBITDA over the next three years.

Ryanair's shares rose after UBS upgraded its rating to "buy" and raised its 12-month price target to €23.15, citing improved revenue outlook, cost structure, and growth in passenger numbers. The airline is expected to benefit from a favorable pricing environment and tighter industry supply.

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