U.S. Indexes rallied following the Democratic sweep in the Midterm elections. The initial reaction overnight was to sell equity futures, but the move was swiftly pared as Louisiana, a state with significant data center exposure, stayed Republican, supporting hyperscalers. Also supporting hyperscalers, the recent weakness in neocloud stocks has prompted speculation that if neocloud providers lack the capacity to meet elevated AI demand, hyperscalers may step in and absorb the excess demand. There were plenty of earnings to digest, with strong results from AMD, SMCI and MCD, although DDOG earnings disappointed and weighed on other software names, with both AMD and SMCI paring initial strength. Consumer Discretionary, Real Estate, and Financials outperformed, while Industrials and Energy were the only sectors to close in the red, with Industrials pressured by concerns over potential Democratic AI regulation. Energy was the clear laggard as crude prices tumbled. Crude prices settled at their lowest levels since the end of August, with Brent dropping over USD 10/bbl at one point. The Democratic sweep reduced expectations of a prolonged US/Iran war, with Democratic leaders Schumer and Jeffries both stating their intention to end the conflict. Meanwhile, President Trump largely accepted the election defeat and acknowledged Vice President Vance’s assessment that the loss was related to the Iran war. Trump also stated that he could work with Democrats on many issues and would probably get along with them unless they sought to be destructive. Crude hit session lows following reports that Trump was considering dismissing War Secretary Hegseth, although Trump later denied these reports. There had also been reports overnight that the US had no immediate plans for further kinetic action against Iran. Bond Yields were lower across the curve following the Democratic sweep, with prospects of reduced fiscal spending and fewer tax cuts under a Democratic Congress supporting Treasuries, alongside concerns that increased regulation could slow growth. The Quarterly Refunding Announcement saw auction sizes for the upcoming quarter left unchanged, but the Treasury tweaked its guidance, dropping the words “at least” when referring to maintaining auction sizes over the next several quarters, potentially opening the door to increased issuance in 2027 – which the TBAC hinted at would be front-end and belly-weighted, away from the expensive long end. In FX, the Dollar was sold following the Midterm election results, while cyclical currencies outperformed as stocks rallied. Both Silver and Gold prices surged in response to the election results and the associated decline in Treasury yields. The US ISM Services PMI fell to 54.5 from 54.9, below the 54.8 forecast. Within the report, business activity dropped to 53.8 from 56.5, while new orders declined to 55.9 from 59.8. Meanwhile, the employment and prices indices provided some encouragement: prices remained elevated at 73.0 but eased from 74.0, while employment rose to 51.4 from 50.1. Summarising respondents’ comments, the general theme was that activity is holding up, but rising fuel, freight and tariff costs, alongside labour constraints, are pressuring margins and making planning more difficult. In turn, Oxford Economics writes that the simultaneous increase in order backlogs (58.0 from 56.6) and longer supplier deliveries (56.7 from 53.2) suggests that broader supply-chain stress, in addition to elevated energy prices, is contributing to price pressures. The report also noted that the historical relationship between the Services PMI and the overall economy indicates that a headline reading of 54.5 corresponds to a 2.0% increase in real GDP on an annualised basis. Following the release, the Atlanta Fed GDPNow estimate for Q4 was lowered to 3.4% from 3.7%. Elsewhere, for the second consecutive trading session Oil closed lower by over 7% while Gold closed Wednesday with an impressive 3.5% gain.
To mark my 3475th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 1750 points yesterday and is now ahead by 2544 points for November, after closing October with a gain of 3975 points after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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