Dow Jones Forecast: DJIA hits a record high as Trump wins the Election

US futures

Dow future 3% at 43518

S&P futures 2% at 5897

Nasdaq futures 0.13% at 20636

In Europe

FTSE 0.04% at 8178

Dax -0.67% at 19131

Stocks surge as Trump wins with the possibility of a Red Sweep
Optimism of deregulation & lower taxes boosts stocks
Tesla jumps to a 2024 high
Oil falls amid a strong USD & on China demand worries

A Republican sweep is looking possible

U.S. stocks are at a record high after Donald Trump won the election to become the 47th president of the United States. Republicans are on course to take both the Senate and the House, pointing to the possibility of a Republican sweep.

Trump's decisive win and the possibility of a Republican sweep would give the former president a strong mandate and platform to implement his policies, including corporate tax cuts and deregulation. The prospect of these policies being implemented has boosted investor confidence, taking stocks to record levels, at least for now. Sectors such as banks and crypto are benefitting from this.

However, it's not all good news, as the Red Sweep will also give Trump a more straightforward path to applying trade tariffs, particularly to China, which could harm certain market sectors, such as chip makers.

Still, the clear outcome has ended the period of uncertainty for stocks and markets. Attention will now start turning towards tomorrow's Federal Reserve interest rate decision, where the central bank is widely expected to cut rates by 25 basis points at the conclusion of the meeting.

Given that the move is priced in the market, we will be closely watching Fed guidance given recent sticky US inflation.

Corporate news

Trump Media & Technology has surged 35% following the election results.

Crypto-related firms MicroStrategy and Coinbase are also soaring as Bitcoin hits an all-time high on optimism after Trump positioned himself as a pro-cryptocurrency supporter.

Tesla has jumped 14% as the EV maker was seen as a key beneficiary of a Trump win. CEO Elon Musk has been a major backer of the former President’s campaign.

Dow Jones forecast – technical analysis.

The Dow has seen a bullish reversal from last week’s low of 41,630, taking out the previous record high of 43,330 and reaching an all-time high of 43,630. While the price has eased back, buyers supported by the RSI above 50 will look to extend gains towards 44k. Minor support can be seen at 43,300 and 42,630, the September high. Sellers need a move below 41,800 to create a lower low.

FX markets – USD rises, EUR/USD slumps

The USD is surging, rising to its highest level since June on expectations that Trump's policies will be inflationary. The USD is tracking treasury yields higher on expectations that the increased inflationary pressures mean the Fed will adopt a more gradual pace to rate cuts.

EUR/USD has fallen over 2% in its worst daily performance since COVID-19. The EUR is one of the worst-performing major currencies due to U.S. dollar strength, on expectations of diverging ECB—Fed outlooks and worries over trade tariffs. The market has shrugged off data showing that the resume composite PMI was upwardly revised from the preliminary reading of 49.7 to 50.

GBP/USD has fallen to 1.2850, the October low, as the USD shows no signs of slowing and ahead of the BoE and Fed rate decisions tomorrow. A breakthrough 1.2850 could expose the 200 SMA at 1.2810. Both the Fed and the BoE are expected to cut rates

Oil falls as the market weighs up a Trump Presidency.

Oil prices are dropping below $70.00 a barrel due to a stronger U.S. dollar following Trump's election win. The dollar has rallied to a four-month high, making oil more expensive for buyers with foreign currencies.

Furthermore, any Trump policies that could put further pressure on the Chinese economy could weaken oil demand. Tariffs would be negative for economic growth and, therefore, oil demand growth.

On the other hand, Trump could also renew sanctions on countries such as Iran and Venezuela, which would remove supply from the market.

Trump has little interest in renewables, which could be a positive for U.S. oil output growth.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.