Pre-market market trends

1. Pre-market trading on November 4th (Monday), the futures of the three major US stock indexes are all up. As of the time of publication, Dow Jones futures are up 0.12%, S&P 500 index futures are up 0.21%, and Nasdaq futures are up 0.18%.

2. As of the time of publication, deguodaxzhishu is up 0.05%, UK FTSE100 index is up 0.63%, France CAC40 index is up 0.27%, and Europe's Euro Stoxx 50 index is up 0.21%.

3. As of the time of publication, crude oil is up 3.05%, trading at $71.61 per barrel. Brent crude is up 2.86%, trading at $75.19 per barrel.

Market News

The markets are gearing up for an eventful week! November 5th in the Eastern United States will mark the US Presidential Election Day. The latest polls show no clear leader between the Democratic presidential candidate Harris and the Republican candidate Trump. Moreover, the outcome of this US presidential election is unlikely to be announced on November 5th or the following day as usual; it may take a few extra days to reveal the results. The Federal Reserve will announce its rate decision on November 7th Eastern Time. The futures market is currently betting that the Fed will cut rates by 25 basis points. For many investors, the key focus will be on the rate path guidance provided by Fed Chair Powell at the press conference, as well as whether the Fed will pause its rate cuts in future meetings due to strong economic data. In addition, several central banks, including the Bank of England, Reserve Bank of Australia, and the Swedish Central Bank, will also announce rate decisions this week.

The US dollar weakened ahead of the US election, with markets pricing in a 25 basis point rate cut by the Federal Reserve this week. The dollar fell on Monday, as investors prepare for the potential turning point in the global economy following this week's US presidential election results, as well as the significant impact of another possible Fed rate cut on bond yields. As of the time of publication, the USD index fell by 0.56%, trading at 103.69. Analysts believe that Trump's policies on immigration, tax cuts, and tariffs will bring upward pressure on inflation, bond yields, and the US dollar. Traders pointed out that the dollar's decline in early Monday trading may be related to a recent opinion poll. The recent reputable Selzer poll in the US political circles showed that Harris unexpectedly leads Trump by 3 percentage points in Iowa, mainly due to her popularity among female voters. At the same time, the futures market implies a 99% chance of a 25 basis point rate cut by the Fed on Thursday, and an 83% chance of a 25 basis point cut in December.

With the U.S. presidential election approaching, the market is experiencing a huge shock! Traders are choosing to be on the sidelines. American voters are about to choose their next president, which could determine the direction of the U.S. economy for the next four years. Investment professionals point out that predicting success before the winner emerges can bring unexpected fortunes, but the fierce competition in this election makes it difficult for many to bear the risk of incorrect predictions. Most traders believe that there will be volatility this week and it could be significant, as a disputed result is likely to delay the outcome for several weeks or even months. This explains why the Cboe Global Markets Volatility Index (VIX) has risen above 20 in the past four trading days, a level that typically signals increasing stock market pressure. This is also why investors are not rushing to pick winners and losers based on who they think will be the next U.S. president.

What will happen to the stock market after the U.S. election? JPMorgan and Morgan Stanley agree: it depends on U.S. bond yields. Strategists from JPMorgan and Morgan Stanley unanimously believe that the direction of the U.S. stock market will be determined by U.S. bond yields after the election on Tuesday. The Morgan Stanley team led by Michael Wilson stated that if Trump wins and the Republicans sweep Congress, there will be limited fluctuations in the 10-year U.S. Treasury yields due to expectations of improved economic growth, which would be bullish for the stock market. They mentioned that in this scenario, cyclical stocks like financials and industrials would perform well. However, they also noted that if market concerns about the U.S. fiscal outlook lead to a "significant" increase in yields, the market will take a risk-averse approach, causing tariff-sensitive consumer stocks to decline. JPMorgan's Mislav Matejka team also advised stock investors to closely monitor the bond market. JPMorgan strategists pointed out that investors' stock positions are higher than in 2016, as there is a general expectation of a Trump victory, with the market expected to react positively. They mentioned that although stocks may rebound after a Trump victory, following the pattern of 2016, the sustainability of the uptrend may depend on the bond yield's reaction.

Wall Street veteran strategist: Inflation will not disappear, the Fed will not make significant rate cuts. Veteran on Wall Street and strategist at Wind Shift Capital Advisors, Bill Blain, stated that despite the relief from lower borrowing costs, U.S. households and companies may find it difficult, as interest rates and inflation are expected to remain high, potentially sparking a significant decline in the stock market next year. He forecasts turbulence in the stock market over the next 12 months. He mentioned that the Fed will not lower rates significantly as the market believes to very low levels; starting now, borrowing costs could indeed rise, which could hinder loans, slow down investments, and lead to a 7%-12% drop in U.S. and global stock markets. He also indicated that the U.S. economy faces too much inflationary pressure in the medium term, therefore making it uncertain for the Fed to adopt an aggressive loose policy. In the "new normal," he believes rates will linger between 4.5% to 6%.

Individual stock news

Tesla (TSLA.US) delivered electric vehicles in China in October, with a 5.3% year-on-year decrease and a significant 23% monthly drop. Tesla's Shanghai Gigafactory delivered 68,280 vehicles in October 2024, down 5.3% year-on-year and 22.7% monthly. Sales in China exceeded 0.04 million vehicles, up 41% year-on-year. In addition, Model Y sales in China exceeded 0.036 million vehicles in October; cumulative sales in China this year exceeded 0.373 million vehicles. It is worth mentioning that Tesla must sell a record number of electric vehicles globally in the last three months of 2024 (at least 0.515 million vehicles) to achieve its expectation of "slight growth" in annual sales (deliveries were 1.81 million vehicles last year).

AI GPU demand is surging, Nvidia (NVDA.US) urges SK Hynix to prepare HBM4 six months early. It is reported that Nvidia's CEO Huang Renxun previously requested the storage chip manufacturing giant SK Hynix, under the SK Group, to launch its next-generation high-bandwidth storage product HBM4 six months ahead of schedule. In its financial report in October, SK Hynix revealed plans to provide the next generation of HBM to major customers (market speculates Nvidia and AMD) in the second half of 2025. Huang Renxun personally urged SK Hynix to speed up delivery of the next-generation HBM, HBM4, highlighting Nvidia's strong demand for higher-capacity, more energy-efficient HBM for developing more advanced artificial intelligence GPUs. Nvidia's founder and CEO Huang Renxun recently revealed that the Blackwell architecture AI GPU has been fully produced and the demand is extremely high. With AI GPU demand skyrocketing, the need for HBM storage systems is also increasing, and there may be continuous supply shortages in the coming years.

Stonepeak plans to acquire the air transport services group (ATSG.US) for $3.1 billion, a premium of nearly 30%. Sources said on Sunday that Stonepeak is in deep negotiations to acquire the air transport services group for approximately $3.1 billion (including debt). The air transport services group is an aircraft leasing and freight service provider. Sources indicated that Stonepeak is expected to acquire the air transport services group at a price of $22.50 per share, a premium of nearly 30% over the company's closing price last Friday. Additionally, if successful, the deal could be announced as early as Monday. As of last check, the air transport services group was up nearly 21% in pre-market trading on Monday.

Viking Therapeutics (VKTX.US) surged in pre-market trading, with significant early-stage research results on oral weight loss medication. Biotechnology company Viking Therapeutics released a report last Sunday stating that patients taking 100 mg of its experimental weight loss drug VK2735 in an early-stage study had an average weight loss of 8.2% after 28 days, compared to 6.8% for patients taking a placebo; furthermore, the highest dose of the drug did not cause patients to discontinue use. Investors are encouraged by these study results. As of last check, Viking Therapeutics was up over 24% in pre-market trading on Monday.

Important economic data and events notice

At 23:00 Beijing time, the revised value of the monthly durable goods orders in usa for September.

At 23:00 Beijing time, the monthly factory orders rate in usa for September.

Performance forecast.

Tuesday morning: Palantir (PLTR.US), NXP Semiconductors (NXPI.US)

Tuesday pre-market: Ferrari (RACE.US)