In the spotlight today, China unveiled a plan for local governments to issue an additional 6 trillion yuan ($838.8 billion) in bonds over three years. This move aims to tackle financial vulnerabilities and inject life into the sluggish economy. Additionally, local governments can tap into another 4 trillion yuan in pre-approved issuance for debt swaps, designed to mitigate systemic financial risks. Yet, these measures were anticipated, leaving markets largely unmoved, as investors seemingly expected more. 

Trump's return to the Oval Office has stirred mixed feelings in financial circles. Initially, his victory buoyed risk assets, but uncertainty looms over the long-term effects of his policies, particularly concerning monetary policy and trade.

Wall Street has just recorded a third session of gains in the wake of Donald Trump's victory in the US presidential election. Even Fed boss Jerome Powell thinks the Republican's return to the White House early next year won't have many short-term consequences. He said as much yesterday, alongside the expected announcement of a 25 basis point rate cut. The basic cost of money in the United States is now back in the 4.50 to 4.75% range. For all that, monetary policy remains restrictive, Powell reiterated, while acknowledging that the economy is doing rather well and that inflation expectations are moderate at this stage. In other words, everything's going pretty well.

Wall Street has notched up a third consecutive day of gains following Trump's triumph. Even Fed Chair Jerome Powell seems unfazed by the prospect of Trump's return, suggesting minimal short-term impact. He confirmed this sentiment alongside the expected 25 basis point rate cut announcement. The U.S. interest rate now sits between 4.50% and 4.75%. Despite this, Powell emphasized that monetary policy remains tight, acknowledging the economy's health and moderate inflation expectations. In simpler terms, things are ticking along nicely. When quizzed about his future, Powell made it clear he wouldn't resign, even if Trump requested it. Their relationship is, to put it mildly, complex. Trump appointed Powell for his first term, perhaps not anticipating Powell's staunch defense of the Fed's independence over presidential directives. Their exchanges have been, shall we say, colorful.

As we await the next chapter in their saga, investors are banking on Trump's business-friendly policies. The S&P 500, Wall Street's darling index, is on the cusp of 6,000 points after a 0.8% rise yesterday. I recall the excitement of the 4,000-point breakthrough in April 2021. Since then, the 5,000-point barrier fell last February, and now 6,000 is within reach. It took 16 years (from 1998 to 2014) for the S&P 500 to climb from 1,000 to 2,000 points, and another five years to hit 3,000 (July 26, 2019). The index is now poised to double in just over five years.

Corporate earnings have been a mixed bag recently, with some disappointments from The Trade Desk, Airbnb, Pinterest, and Capri. Asian markets are running in all direction; as traders weigh Beijing's stimulus measures and await clarity on Trump's policy direction. Tokyo ended in positive territory, but Hong Kong and Shanghai slipped. Korea's KOSPI dipped 0.1%, Taiwan's TWSE fell 0.6%, and Australia's ASX 200 dropped 0.8%. In India, the Sensex closed down 0.1%.

Today's economic highlights:

In the United States, the University of Michigan's consumer sentiment index will be of interest. The full agenda is here.

In corporate news:

  • Airbnb reported third-quarter earnings slightly below expectations, resulting in a 5.5% premarket decline.
  • Upstart Holdings saw a 22% rise in premarket trading following strong quarterly results.
  • Arista Networks and Monster Beverage both reported results that led to declines of 4.6% and 6%, respectively.
  • Super Micro Computer rose 5% in premarket trading, while Trump Media & Technology Group fell 1%.
  • Baxter International has lowered its annual profit forecast due to hurricane impacts at its North Carolina facility
  • Pinterest's Q3 earnings exceeded expectations with a revenue of $898.4M and an 11% increase in monthly active users to 537 million, but shares dropped after-hours due to a weaker-than-expected revenue forecast for Q4.
  • Motorola Solutions reported strong Q3 earnings 
  • BlackRock is in talks to acquire a minority stake in hedge fund Millennium, according to the FT.
  • Icahn is considering increasing its stake in oil refiner CVR Energy, according to the WSJ .
  • Procter & Gamble and Unilever face risks from Trump's proposed tariffs on Mexico.

Top earnings reports today: Constellation Software, TELUS Corporation, Baxter International, NRG Energy, RB Global, CNH Industrial...

Analyst recommendations:

  • Airbnb, Inc.: Punto Research upgrades to hold from buy with a price target raised from USD one hundred forty-six point fourteen to USD one hundred fifty-seven point fifty-two.
  • Applovin Corporation: Daiwa Securities upgrades to outperform from neutral with a price target raised from USD eighty to USD two hundred eighty.
  • Bath & Body Works, Inc.: Barclays downgrades to underweight from equalweight with a price target reduced from USD thirty-one to USD twenty-eight.
  • Celanese Corporation: Piper Sandler & Co downgrades to underweight from neutral with a price target reduced from USD one hundred fifty to USD ninety-eight.
  • Chevron Corporation: Gerdes Energy Research LLC downgrades to neutral from buy with a target price reduced from USD one hundred seventy-two to USD one hundred seventy-one.
  • Enphase Energy, Inc.: BNP Paribas Exane downgrades to neutral from outperform with a target price reduced from USD one hundred forty-four to USD eighty-eight.
  • Epam Systems, Inc.: Itau BBA Securities upgrades to outperform from market perform with a price target raised from USD two hundred fifteen to USD two hundred sixty-nine.
  • Planet Fitness, Inc.: Macquarie downgrades to neutral from outperform with a price target raised from USD ninety-one to USD ninety-nine.
  • Sirius Xm Holdings Inc.: Guggenheim upgrades to buy from neutral with a target price of USD thirty.
  • Sunrun Inc.: BNP Paribas Exane downgrades to neutral from outperform with a target price reduced from USD twenty-six to USD fourteen.
  • Affirm Holdings, Inc.: Jefferies remains at a hold recommendation with a price target raised from forty to USD forty-nine.
  • Arista Networks, Inc.: Haitong International Research Ltd maintains its outperform recommendation and raises the target price from USD three hundred fifty to USD four hundred forty.
  • Axon Enterprise, Inc.: JMP Securities maintains its market outperform recommendation and raises the target price from USD five hundred to USD six hundred ten.
  • Bill Holdings, Inc.: BMO Capital Markets maintains its market perform recommendation with a price target raised from fifty-seven to USD seventy-seven.
  • Capri Holdings Limited: Jefferies remains at hold with a target price reduced from USD thirty-nine to USD twenty.
  • Coty Inc.: Kepler Cheuvreux maintains its hold recommendation with a price target reduced from ten to EUR seven.
  • Dynatrace, Inc.: Loop Capital Markets maintains its hold recommendation and raises the target price from forty-five to USD fifty-five.
  • Expedia Group, Inc.: JP Morgan maintains its neutral recommendation and raises the target price from one hundred thirty-five to USD one hundred seventy.
  • Fortinet, Inc.: Wells Fargo maintains its equalweight recommendation and raises the target price from USD sixty-four to USD eighty.
  • Motorola Solutions, Inc.: Raymond James maintains its outperform rating and raises the target price from USD four hundred twenty-five to USD five hundred fifteen.
  • Nvidia Corporation: Huatai Research maintains its buy recommendation and raises the target price from USD one hundred thirty-eight to USD one hundred eighty.
  • Tapestry, Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from forty-four to USD fifty-five.
  • The Trade Desk, Inc.: Evercore ISI maintains its outperform recommendation and raises the target price from USD one hundred ten to USD one hundred thirty-five.
  • Us Foods Holding Corp.: BMO Capital Markets maintains its outperform rating and raises the target price from USD sixty-two to USD seventy-five.
  • Warner Bros. Discovery, Inc.: Barclays maintains its equalweight recommendation and raises the target price from eight to USD ten.
  • Williams Companies, Inc.: Stifel maintains its buy recommendation and raises the target price from USD forty-six to USD sixty-one.
  • Greggs Plc: Deutsche Bank downgrades to sell from hold with a target price reduced from GBX two thousand six hundred to GBX two thousand four hundred.
  • Intercontinental Hotels Group Plc: Peel Hunt upgrades to add from reduce with a price target raised from GBX seven thousand to GBX nine thousand seven hundred.
  • Tullow Oil Plc: AlphaValue/Baader Europe upgrades to buy from add with a price target reduced from GBX thirty point seventy to GBX thirty point forty.