A Trump victory in the US Presidential Election has driven US share markets sharply higher in overnight trading, with all three major US indices hitting new all-time highs.
The ASX looks ready to follow US markets higher in trading today, with futures pointing to a 31-point or 0.38% lift as of 9:00 am AEDT.
US and European markets
US markets surged overnight, with the VIX ‘fear index’ falling back below historical levels as the clear election result put fears of a protracted legal battle to bed.
Bitcoin was a clear winner in the US election, roaring 10.44% higher in a single day to hit $US75,919.26.
US Treasury yields also gained sharply, as investors bet Trump’s economic policies would increase deficits and inflation – just as they were beginning to come back under control.
The US dollar climbed to its highest point since July and Trump-affiliated stocks followed. Trump Media and Technology lifted 5.8%, Tesla surged 14.8% and Crypto exchange stock Coinbase soared 31.1%.
The energy, industrial and consumer discretionary sectors all gained about 3%. Financials enjoyed a bigger 6.2% bump to hit a record high as banks also climbed.
Wells Fargo added 13.2%, Goldman Sachs 13.1% and JPMorgan Chase 11.5%.
Trump’s promises of tariffs also buoyed the US steel industry – Nucor jumped 16%.
The small cap Russel 2000 notched a strong 5.8% jump, while the Dow Jones surged 1,508 points or 3.6%, the S&P500 2.5% and the Nasdaq 544 points or 3%.
In Europe, markets moved in the opposite direction.
Regional equity markets all fell, with Spain’s main share index shedding 2.9%.
The FTSE300 lost 0.5% and the UK FTSE100 0.1%.
Currencies and commodities
The US dollar climbed in overnight trading but the Aussie managed a rally of its own.
The Euro fell from US$1.0791 to near US$1.0730 and the Japanese Yen from JPY153.13 per US dollar to JPY154.60 while the Australian dollar lifted from US65.20 cents to near US65.70 cents.
Oil prices declined as the US dollar strengthened and investors assessed potential impacts from Trump’s foreign policy on oil supply.
US crude inventories increased by 2.1 million barrels to 427.7 million barrels, exceeding analyst forecasts. Brent crude fell by US61 cents or 0.8% to US$74.92 per barrel, while Nymex crude declined by US30 cents or 0.4% to US$71.69 per barrel.
Base metals dropped as well, with copper futures down by 5.1% on concerns that electrification projects might slow, and aluminium futures decreasing by 2.6%.
Gold futures prices dropped by US$73.40, or 2.7%, reaching a three-week low of US$2,676.30 per ounce on Wednesday, with spot gold trading near US$2,660 per ounce by the US close.
The decline came as investors shifted funds towards the US dollar following the election of Donald Trump as US President.
Iron ore futures also fell by US$1.08, or 1.0%, to US$104.01 per tonne due to weak demand fundamentals for steel production.
On the small cap front
The ASX Small ordinaries gained 0.94% yesterday, rising by 29.2 points as the ASX notched a 0.83% lift.
You can read about the following and more throughout the day on our website.
- Carnavale Resources Ltd (ASX:CAV) has divested the non-core Leonora asset to maintain its focus on Western Australian gold in return for a total payment of $405,000.
- Sprintex Ltd (ASX:SIX) has delivered 15 G15 Jet Blowers to India for testing and evaluation by Euroteck Environmental Pvt. Ltd, a step toward a potential exclusive supply agreement.
- Helix Resources Ltd (ASX:HLX) has hit copper of up to 2 metres at 2.92% copper at the Bijoux prospect, part of the Canbelego Project in New South Wales.
- International Graphite Ltd (ASX:IG6) has secured a mining lease for the high-grade Mason Bay deposit at the flagship Springdale Graphite deposit, a vital step in the permitting process.
- Forrestania Resources Ltd (ASX:FRS) has completed a maiden reverse circulation drilling program at the Ada Ann prospect, part of the Bonnie Vale Project in WA, where the company has confirmed the presence of gold mineralisation previously observed in drilling results of up to 4 metres at 12.8 g/t gold from historical programs.