On Monday, US stocks closed lower with all three major indexes declining as investors grew cautious ahead of the upcoming US presidential election and the Federal Reserve’s policy meeting later this week. NVIDIA is set to replace Intel in the Dow 30.
As the US election nears, polling indicates a close race between Trump and Harris, keeping the market on edge. JPMorgan strategist Dubravko Lakos-Bujas noted that, depending on the outcome, the US stock market could rise in the final stretch of 2024, particularly if the election results in political gridlock.
Both Trump and Harris-related stocks saw gains overnight. Trump Media & Technology Group spiked over 12% after initially dropping 5%, while solar and clean energy stocks under the Harris theme rose sharply, with Plug Power up 20% and Array Technologies up 12%.
The market also awaits this week’s critical Fed rate decision, with close attention on Fed Chair Powell’s statements in the post-decision press conference. Ahead of these major events, the volatility index (VIX) spiked significantly on Monday.
In individual stocks, NVIDIA edged up around 0.5%, briefly surpassing Apple as the most valuable US company. After market close on November 1, S&P Dow Jones Indices announced NVIDIA would replace Intel in the Dow 30, effective post-market close on November 8.
Palantir, a data analytics giant, raised its annual revenue forecast to new highs, with shares surging over 13% after hours. Palantir now expects 2024 revenue between $2.805 billion and $2.809 billion, up from a previous forecast of $2.742 billion to $2.750 billion.
US Stocks
Fundamental Analysis:
Major tech stocks mostly fell, with Tesla and Intel both down over 2%, and Google, Amazon, and Meta down over 1%. Apple, Netflix, and Microsoft slipped slightly, while NVIDIA edged up, achieving a market value of $3.34 trillion, almost overtaking Apple to briefly become the world’s most valuable company. Pacific Air Cargo (PACS) dropped over 27% after Hindenburg Research announced a short position.
The Nasdaq Golden Dragon China Index rose 1.1%, with many popular Chinese stocks rising. Yum China surged over 7%, XPeng rose nearly 5%, TAL Education gained over 4%, Trip.com climbed over 3%, and Vipshop was up more than 2%.
Technical Analysis:
Market Trends:
- Dow Jones: -257.59 points (-0.61%) at 41,794.60
- Nasdaq: -59.93 points (-0.33%) at 18,179.98
- S&P 500: -16.11 points (-0.28%) at 5,712.69
Hong Kong Stock Market
Fundamental Analysis:
The three main Hong Kong indexes rose, led by gains in tech stocks. Kuaishou surged over 6%, with Alibaba, Baidu, and Xiaomi rising nearly 2%. Semiconductor stocks were among the top performers, with SMIC up nearly 7%. Chinese brokerage stocks also saw strong gains, led by a 10% rise in CITIC Securities.
Real estate stocks in mainland China were mostly strong, with Sunac China climbing nearly 7% amid ongoing meetings with domestic bond investors to discuss a second restructuring plan. The parties are still in early communication, and a finalized plan is expected by the end of the month.
Technical Analysis:
- Hang Seng Index: +1.24%, closing at 20,823.36
- Hang Seng Tech Index: +1.99%, closing at 4,622.55
- Hang Seng China Enterprises Index: +1.51%, closing at 7,478.92
FTSE China A50 Index
Fundamental Analysis:
China’s A-shares started Tuesday with all three major indexes rising by midday, with half-day turnover at 1.425 trillion yuan, an increase of 308.8 billion yuan from the previous session. Over 4,800 stocks traded higher.
Sector-wise, the Hainan Free Trade Zone, military equipment, and internet finance led the gains, while small metals and rare-earth magnets were weaker. Hainan Free Trade Zone stocks topped the gains, with names like Supply and Marketing Dajie, HNA Group, Hainan Pharmaceutical, and Hainan Airport all hitting daily limits. Internet finance also surged, with Zhicheng Information, Tongda Hai, Winning Times, Hualin Securities, and Xinyi Financial hitting daily limits.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: +1.80%, at 3,369.70
- Shenzhen Component Index: +2.72%, at 10,952.91
- ChiNext Index: +4.14%, at 2,276.52
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