[Good Morning Stock Market] US Stocks Continue 'Trump Rally' with All Three Major Indexes Reaching New Highs

Clear 'Trump Trade' in Financial and Bitcoin-Related Stocks
Tesla Continues to Rise as Trump Beneficiary Amid Large Tech Stock Weakness
Domestic Market Slump Persists... Number of New Lows Doubles

The U.S. New York stock market continued its rally following Donald Trump's presidential election victory, closing all at record highs.

Reuters Yonhap News

On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 44,293.13, up 304.14 points (0.69%) from the previous session. The S&P 500 index rose 5.81 points (0.1%) to 6,001.35, and the Nasdaq index closed at 19,298.76, up 11.98 points (0.06%). All three major indices closed at all-time highs.

On that day, financial stocks, expected to benefit from deregulation in the 'Trump 2.0' era, showed strength. JPMorgan Chase and Goldman Sachs rose 0.97% and 2.22%, respectively. Bank of America (2.10%) and Citigroup (1.71%) also rose together. Trump is expected to ease regulations on finance. Bitcoin (BTC)-related stocks, which are also spotlighted as targets for deregulation, continued their strong performance. MicroStrategy, known as the largest BTC holder company, surged 25.73%, and cryptocurrency exchange Coinbase rose 19.76%. BTC continued its record rally, surpassing $89,000.

Large tech stocks that had led the market so far showed relatively weak performance. Among the 'Magnificent 7 (M7, Apple, Microsoft, Google Alphabet, Amazon, Nvidia, Meta, Tesla),' except for Tesla (8.96%) and Google Alphabet (1.17%), all recorded declines around 1%. Tesla CEO Elon Musk has been one of the biggest beneficiaries of Trump's election victory since actively participating in Trump's campaign. Some speculate that Musk will join the next cabinet and that Tesla will receive government support in autonomous driving and artificial intelligence (AI) businesses.

Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, said, "The decisive victory of the Republican Party is triggering 'animal spirits,'" adding, "I view the current situation not as a fundamental scenario change toward a soft landing or no landing of the economy, but as positioning driven by sentiment and liquidity."

The market is expected to focus on the 'Trump trade,' where investment sentiment concentrates on assets benefiting from Trump's second term. Over the weekend, the number of seats secured by the Republican Party in the U.S. House of Representatives increased, raising the possibility of a 'Red Wave.' Meanwhile, according to the summary of the Bank of Japan (BOJ) Monetary Policy Meeting (October 30-31), the BOJ decided to cautiously maintain interest rates for the time being. The minutes mentioned concerns about the impact of a strong dollar and weak yen on Japan's inflation.

On the 11th, the KOSPI closed at 2,531.66, down 29.49 points (1.15%) from the previous trading day. Unlike the U.S., which is enjoying a boom due to Trump expectations, the domestic stock market is experiencing the opposite situation. As of the 11th, the number of stocks hitting new lows was 105, more than double the 44 at the end of October. Despite the abolition of the financial investment income tax, which was cited as one reason for domestic market neglect, the market has not secured momentum for a rebound.

Han Ji-young and Lee Seong-hoon, researchers at Kiwoom Securities, said, "Disappointment in the domestic third-quarter earnings season and issues such as capital increases within specific sectors are intertwined, resulting in no meaningful activation of stock prices and trading volume," adding, "There is a prevailing anxiety that Trump's election will not be a significant positive factor for the domestic stock market." They also said, "The rapid rise of virtual assets such as Bitcoin and Dogecoin is weakening the supply-demand conditions of the domestic stock market," and "While other challenges such as the U.S. October Consumer Price Index (CPI) event on Wednesday and the slowdown in domestic earnings and export momentum need to be addressed, the negative atmosphere in the domestic stock market created by the election issue is expected to be alleviated during the cooling-off process of the Trump trade, excluding leading beneficiaries like Tesla and Bitcoin."