The Overnight News Roundup

Nov 07, 2024

PiQ and Zack Eiseman provide you a consolidated roundup of the overnight news that matters most to markets.

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MACRO:

Republicans look positioned to narrowly keep power in the House, setting President-elect Trump up to more easily confirm nominees and muscle through key priorities on taxes and other issues. (WSJ)
Trump’s second term is expected to be an immediate catalyst for corporate takeovers, private equity deals and venture capital exits, which have been paralysed for years by heightened scrutiny from Biden’s competition watchdogs and high interest rates. (FT)
Automakers are bracing for President-elect Trump to impose new tariffs on vehicles from Mexico and potentially from other countries and to reverse many existing pro-EV policies. (RTRS)
US President-elect Trump is unlikely to roll back the Biden administration’s CHIPS and Science Act, despite his campaign rhetoric on the bill, experts say, although he may alter it. (CNBC)
The number of US borrowers in danger of defaulting a second time on commercial property loans is at the highest level in a decade, raising concerns that a bank practice known as “extend and pretend” is hiding growing systemic risk in the CRE sector. (FT)
China stocks rallied ahead of the NPC announcement on Friday with expectations growing of a larger stimulus measure to counter a Trump presidency.
China's local governments have vowed to deploy wide-ranging policies to boost consumption and investment while solving their debt issues to spur growth. Many held planning meetings in recent days amid vows to meet growth targets for the year. (Shanghai Securities News)
China's outbound shipments grew at the fastest pace in over two years in October (+12.7%) in anticipation of further tariffs from the US and EU, as the threat of a two-front trade war looms, although imports undershoot (-2.3%), underlining weak domestic demand. (BBG)
Oil imports into China sank again last month, highlighting soft consumption in the largest buyer, while broader raw materials imports mostly rose year-on-year. (BBG)
Steel exports from China hit the highest level since 2015, risking further frictions with trade partners. (BBG)
China slashed the daily reference rate for its currency to a level unseen since late 2023, a sign the central bank is allowing depreciation under the threat of trade tensions. State-owned banks sold dollars in large amounts in the onshore market on Wednesday and Thursday. (BBG)
Chinese regulators told the nation's banks to lower interbank rates to free up funds to boost the economy. (Bloomberg)
China could cut the loan rates of housing provident funds further, after commercial banks lowered their mortgage rates to help revive the domestic property market, analysts say. (Securities Times)
PBoC Governor Gongsheng said China will continue to implement a supportive monetary policy to help promote sustained economic recovery. PBoC held meeting with foreign major banks on optimising business environment and promoting financial opening-up. (RTRS)
China's gold reserves remained flat M/M again at 72.8mln ounces at the end of October. (MktNews)
Japan's top currency diplomat Mimura flagged readiness to act against the weaker yen, in the government's strongest warning against speculators in recent months. Japan last intervened in late July after USD/JPY rose above 161. (RTRS)
A dollar rally triggered by Trump's victory could heighten pressure on the BoJ to raise rates as soon as December to prevent the yen from sliding back toward three-decade lows. Mitsubishi UFJ sees 160 as a line in the sand for a a December hike and intervention. (RTRS)
Japan's inflation-adjusted wages fell for the second straight month in September, underlining the negative effect of persistently elevated prices on nominal pay. (RTRS)
Slightly more than half of Japanese firms are looking to raise wages by 3% or more for the next business year, a Reuters survey showed, but a majority of companies baulked at PM Ishiba's quest to hike minimum pay by over 40% in five years. (RTRS)
Japanese Prime Minister Shigeru Ishiba said he and Donald Trump agreed to have their first in-person meeting soon, after Trump won his second term as US president in an election Tuesday. (BBG)
RBA Governor Bullock said it was hard to judge the inflation implications of the US election at this stage, but policymakers would be watching closely and respond as necessary. (RTRS)
Germany's ruling coalition collapsed on Wednesday as Chancellor Scholz sacked his finance minister and paved the way for a snap election. (RTRS)
Germany’s trade surplus narrowed as exports dropped, adding to signs of weakness in the country’s trade. Meanwhile, industrial production fell in September amid leading companies pledging factory closures and cost cuts while the country’s politics lurches into a new crisis.(WSJ)
Europe’s winter gas supplies are at risk from market disruptions, analysts and traders warn, despite full storages and winter gas balance, amid the region's increased reliance on imports of globally traded LNG, which is more susceptible to price rises. (FT)
The BoE is expected to cut rates by 25bps to 4.75% on Thursday for only the second time since 2020 but the big question for investors is whether the Bank sends a signal about its subsequent moves after the government's inflation-raising budget. (RTRS)
Sweden’s core inflation rate rose just above the Riksbank’s 2% target in a flash reading published just as the central bank is preparing to announce its next easing move. (BBG)
The US government has come to the aid of Argentina by urging a New York court to block the seizure of the country’s assets as partial fulfilment of a $16bn legal judgment. (FT)
Argentine investors are betting that next year will bring far greater progress in lowering inflation, predicting the rate will steadily plunge. (BBG)
SEC Crypto Enforcement Slated for Major Rollback Under Trump. (BBG)

GEOPOLITICAL:

Canada ordered TikTok Technology Canada, the domestic unit of the social-media app’s Chinese owner, to dissolve its business operations due to national-security concerns. (WSJ)

EQUITIES:

Qualcomm reported sales and profit above estimates as the company benefits from a wave of launches of flagship Chinese smartphones. Announced $15bn share buyback. Sees no impact from tariffs proposed by Trump. (RTRS)
Arm Holdings beat Wall St estimates for its Q2 but gave more lacklustre guidance that just met expectations, underwhelming investors in the AI chip space. (RTRS)
Lyft reported gross bookings above estimates after posting upbeat quarterly sales, indicating steady demand for its ride-hailing services from people returning to workplaces. Price lock feature has boosted demand amongst users. (RTRS)
Leaders at top big tech firms rushed to congratulate Trump on his landslide election victory as they sought to rebuild bridges with the president-elect and Elon Musk. Leaders hope for a more permissive attitude on deals, antitrust and AI in the next administration. (FT)
Analysts have speculated that Trump could direct the DoJ to discontinue its monopoly lawsuit against Apple, filed earlier this year. (FT)
Trump has not articulated his own approach to AI, but many anticipate a light touch. Trump has vowed to cancel an executive order from Biden on AI. (FT)
Graphcore, the chip designer acquired by SoftBank Group Corp. in July, is boosting its workforce 20% by adding 75 jobs globally, a sign of the parent company’s ambitions in the semiconductor industry. (BBG)
Albemarle, the world's largest lithium producer, lost more than $1 billion in Q3 and said it would slash its capital budget amid a 71% drop in prices for the EV battery metal. To cut workforce by 6-7%. (RTRS/BBG)
Daimler Truck reported a decline in adjusted earnings and revenue for the third quarter, citing challenging market conditions in Europe. (WSJ)
Rheinmetall posted a 39.5% increase in third-quarter sales as the group remained one of Europe’s main ammunition and weapon suppliers, but stuck to its full-year guidance. (WSJ)
Munich Re lifted its insurance revenue guidance for 2024 after beating estimates for the third quarter. (WSJ)
Zurich Insurance reported revenue growth across its business lines for the first nine months of 2024. (WSJ)
Rolls-Royce announced it is confident in delivering its 2024 guidance whilst also announcing it is reinstating shareholder distributions with a 30% pay-out ratio. (RTRS)
BT Group reported a fall in pretax profit for the first half due to lower revenue and higher costs, and cut its adjusted revenue expectations to reflect weaker non-U.K. trading along with a softer trading environment for its corporate and public–sector units. (WSJ)
J Sainsbury posted a sharp decline in profit in the first half of its fiscal year but said it expects grocery sales growth in the second half, and confirmed its guidance for fiscal 2025. (WSJ)
Air France-KLM AF reported lower net profit after costs rose and weighed on its performance in the third quarter of the year. (WSJ)
ArcelorMittal reported a steeper-than-expected fall in net profit after subdued economic sentiment weighed on steel pricing and shipments in the third quarter of the year. (WSJ)
Chinese auto dealers face increasing risks of operating at loss due to insufficient demand, according to an industry body. (@YuanTalks)
BHP CEO said he sees long-awaited “green shoots” in China’s depressed property market after Beijing unveiled a stimulus package to try to boost the economy. Doesn't see iron ore prices rising much beyond the current $100/T level. (FT)
Rio Tinto said China's steel demand is shifting to higher grade iron ore as overall demand from the residential sector falls but is offset by steel demand from the energy transition. (RTRS)
National Australia Bank said annual profit fell in line with forecasts as it shied from margin-crushing competition, and there was a risk inflation could remain stronger for longer from Donald Trump's upcoming return to the U.S. presidency. (RTRS)
Australia's Breville is already planning on moving production as fast as possible out of China following Trump winning the election ahead of expected tariffs. (WSJ)
Samsung hopes Processing-in-Memory (PIM) can overtake HBM (high bandwidth memory) to become the next-gen AI memory chip. (Chosun)
South Korean shipbuilding stocks advanced Thursday, defying declines in the broader market, after Donald Trump expressed hopes for close cooperation with the Asian nation. (BBG)
Nissan Motor announced various cost saving measures including 9,000 job cuts and slashed its annual outlook for the second straight time this year, as it continues to battle headwinds in major markets such as China. (RTRS)