On Monday, U.S. stocks closed higher, marking the fifth consecutive day of gains for the three main indices, all reaching record highs. The Dow Jones closed above 44,000 for the first time, and the S&P 500 closes above 6,000. Investors are closely watching the next U.S. administration’s composition and the Federal Reserve’s monetary policy outlook.
Small-cap stocks led the gains on Monday, with the Russell 2000 Index rising nearly 1.5%, reaching its highest level since November 2021. Small companies are seen as potential beneficiaries of Trump’s proposed tax cuts and deregulation. From Election Day’s close to last Friday, the Russell 2000 gained a total of 6%.
Benjamin Melman, Chief Investment Officer at Edmond de Rothschild Asset Management, commented that U.S. stocks could rise another 3-5% as the “Trump trade” remains active, adding, “We don’t see any catalyst to drive U.S. stocks lower, so the uptrend may continue until year-end.”
On Monday, Morgan Stanley strategists, including Mike Wilson, noted that the post-election stock rally that started last week is likely to continue, especially in financials, industrials, and cyclical commodities stocks. Oppenheimer’s Chief Investment Strategist John Stoltzfus raised his year-end target for the S&P 500 to 6,200.
Tesla’s rally continued, with the stock closing nearly 9% higher at $350. CEO Elon Musk’s net worth surpassed $300 billion, a level not seen since 2022, securing his position as the world’s richest person. Tesla bull Wedbush raised its target price for Tesla from $300 to $400, expressing confidence that Trump’s leadership would impact Tesla’s trajectory in autonomous driving and artificial intelligence over the coming years.
US Stocks
Fundamental Analysis:
Tesla surged nearly 9%, marking its largest five-day gain in four years, with a market cap reaching $1.12 trillion, making it the seventh-largest U.S. stock. Netflix and Google gained over 1%, while Apple, Nvidia, Microsoft, and Meta fell over 1%, and Amazon saw a slight decline. Blockchain-related stocks saw significant gains, with Canaan up more than 41%, MicroStrategy up over 25%, and Coinbase rising more than 19%. Conversely, chips, semiconductors, and precious metals declined; Harmony Gold dropped over 9%, Kinross Gold fell over 8%, and American Gold nearly 8%, while AMD fell more than 5%, Intel over 4%, and TSMC and ARM both declined over 3%.
The Nasdaq Golden Dragon China Index rose 0.59%, with popular Chinese stocks mostly advancing. XPeng gained over 5%, Li Auto rose nearly 3%, and JD.com and Alibaba were up over 1%, while iQIYI fell over 1%, and Gaotu dropped more than 5%.
Technical Analysis:
Market Trends:
- Dow Jones: +304.14 points or 0.69% to 44,293.13
- Nasdaq: +11.99 points or 0.06% to 19,298.76
- S&P 500: +5.81 points or 0.10% to 6,001.35
Hong Kong Stock Market
Fundamental Analysis:
Hong Kong’s major indices opened lower and continued to slide throughout the day. Tech stocks mostly declined, with Meituan down over 5%, JD.com, Alibaba, and Baidu down over 2%, while healthcare stocks rose, with Asymchem surging over 6%. Automotive dealer stocks saw a pullback, with Zhongsheng Holdings down over 5%.
Gold stocks were among the worst performers, with China Gold International dropping nearly 5%. The U.S. dollar index strengthened on Monday, reaching a high of 105.7, its strongest level since early July, making gold less attractive to non-dollar holders, with gold prices falling 2.39% to $2,619.53 per ounce. Analysts expect Trump’s policies to support the dollar’s strength.
Technical Analysis:
- Hang Seng Index: -1.73%, closing at 20,073.82
- Hang Seng Tech Index: -2.25%, closing at 4,547.10
- Hang Seng China Enterprises Index: -1.85%, closing at 7,219.82
FTSE China A50 Index
Fundamental Analysis:
China’s three main indices had mixed performance on Monday morning, with total market turnover reaching 1.61 trillion yuan, up 14.3 billion yuan from the previous day, and over 3,000 stocks advancing.
Among sectors, pharmaceutical commerce, energy metals, traditional Chinese medicine, and private hospitals led the gains, while photolithography and insurance sectors led the declines. Pharmaceuticals were the top gainers, with companies like YaoYiGou, Renmin Tongtai, First Pharmacy, Jianzhijia, and Kaikai Industrial hitting their upper trading limits. Energy metals were also strong, with Weiling Corporation hitting its upper limit, while Ganfeng Lithium and Yongxing Materials rose before trading was paused. Pharmaceuticals also saw gains, with Weikang Pharmaceuticals, Lukang Pharmaceutical, Guangzheng Ophthalmology, International Medical, Xinli Medical, Wanbang Pharmaceutical, and Kanghui Pharmaceuticals reaching their daily trading limits. Photolithography stocks fell, with Dongfang Jialai and Maolai Optical leading the declines. High-standard stocks continued to decline, with Shuangcheng Pharmaceutical, Sinochem Geotechnics, Black Sesame, and China Fortune Land all hitting their lower trading limits.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: -0.06%, to 3,467.92
- Shenzhen Component Index: +1.02%, to 11,504.37
- ChiNext Index: +1.78%, to 2,435.11
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