| The world’s biggest hedge funds made the most of opportunities sparked by Donald Trump’s reelection, posting gains for November and keeping |
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| Markets Snapshot | | | | Market data as of 06:35 am EST. | View or Create your Watchlist | | | Market data may be delayed depending on provider agreements. | | |
Five things you need to know | |
- The world’s biggest hedge funds made the most of opportunities sparked by Donald Trump’s reelection, posting gains for November and keeping the industry on track to post its strongest returns in at least four years.
- A judge again struck down Elon Musk’s record-setting pay from Tesla, saying the board was improperly influenced. Even without the payout, worth about $102 billion, he remains the world’s richest person.
- SpaceX, another Musk firm, is working on a deal for some investors to sell shares at a price valuing the satellite company at about $350 billion. That would cement its status as the most valuable startup.
- China announced an outright ban on exports of several materials with high-tech and military applications, in a tit-for-tat move after US President Joe Biden’s government escalated technology curbs on Beijing.
- European stocks gained as investors tracked developments in France’s political drama. S&P 500 futures and Treasuries are little changed. Bitcoin has hit a wall just under $100,000.
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| There probably aren’t too many self-proclaimed value investors salivating over the prospect of buying the Magnificent Seven tech stocks these days. Aswath Damodaran counts himself as one. “As a value investor, I have never seen cash machines as lucrative as these companies are,” Damodaran, a finance professor at New York University’s Stern School of Business, tells Bloomberg Television. “And I don’t see the cash machine slowing down.” To be sure, he’s talking about buying the stocks when prices pull back. But to many bargain hunters on Wall Street, the stocks — Tesla, Meta Platforms, Microsoft, Alphabet, Amazon.com, Apple and Nvidia — are part of a bubble that’s been years in the making. It would take a lot more than a routine pullback to get them interested. But Damodaran, who’s known for his expertise on valuations, said the seven megacaps are “insanely profitable” and he owns all of them. The companies are single-handedly responsible for powering a US bull market that’s beaten everything else by a mile. A Bloomberg gauge of the seven has surged 60% this year after doubling in 2023. There will be corrections and “I’d suggest that when that happens you find a way to add at least one, maybe two or three of these companies, because these are so much part of what drives the economy and the market,” Damodaran says. —Abhishek Vishnoi and Haslinda Amin | |
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| Salesforce shares tick up 0.3% in premarket trading. Investors are wagering that software will be the next group to benefit in a big way from the AI frenzy, and Salesforce is a popular bet. The company reports earnings after the close today. The company, which makes customer-relations management tools, launched its Agentforce generative AI product in October. The program can complete tasks like customer support without human supervision. —Ryan Vlastelica | |
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| The political turmoil in France is taking its toll on markets: The CAC 40 Index is underperforming Germany’s stock benchmark by the most in three decades. Since President Macron called a snap election in June, French assets have been dragging on Europe. France’s divided Parliament has been unable to tackle the country’s mushrooming budget deficit, raising concern that investors may continue to shun the country. Prime Minister Michel Barnier faces a no-confidence vote tomorrow that looks likely to pass, and he’s warned of a “storm” in financial markets if he is dismissed. The fall of the government is a scenario investors haven’t fully accounted for, according to Oddo BHF strategist Thomas Zlowodzki. —Jan-Patrick Barnert and Michael Msika | |
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| Short sellers are capitulating as the S&P 500 keeps hitting record highs and is set for its best year since 2021, according to Citigroup strategists. Positioning in S&P 500 futures is “completely one-sided,” the strategists led by Chris Montagu write in a note. It’s “setting new highs for a fourth consecutive week and increasingly the hold-out shorts are capitulating,” they said. The analysis is just further evidence that investors can’t get enough of US equities. While contrarians see such bullishness as a sign of a top, betting that way hasn’t paid off for years. The S&P 500 on Monday notched its 54th closing record of the year and is up 27% in 2024, powered by technology shares and a broad preference for US assets. —Michael Msika | |
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Word from Wall Street | | “This is not going to be something like a euro crisis for a variety of reasons, including the fact that we're talking about France and not something that was at the time called the periphery. But it speaks to the ongoing problems of growth, debt and population that have been this drag on Europe.” | | Mark Haefele Chief investment officer at UBS Global Wealth Management | | Check out the Bloomberg TV interview here. | | |
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