Dear readers,
Yesterday’s open question was whether the vote itself or its aftermath would move markets. So far, the vote has moved the index less than the portfolios inside it. Futures swung overnight from sharp losses into gains, and small-cap futures on the Russell 2000 rose solidly. The DAX is above 26,000 points, just under its August high. The more revealing story is who gets the gains and who pays for them.
Renewables Gain, Musk and Defense Lose
Europe’s renewable names lead. Ørsted rose as much as 7 percent, and Vestas and Nordex also gained solidly. In the U.S., First Solar and Enphase each gained more than 10 percent in premarket trading. Investors are betting that a Democratic Congress will restore subsidies.
Elon Musk’s companies are on the other side of the trade. Tesla trades at $378.50, down from $398.50 at Tuesday’s close. SpaceX is at $132.72, down from $141.31. SpaceX did get a tailwind from elsewhere: Qualcomm is joining as a technology partner to build a mobile network for Starlink Mobile. Launch is planned for next year, and the partners gave no financial details.
Defense stocks fell sharply in the morning. BAE Systems is still in the red, while Rheinmetall has nearly erased its losses after a weak start. The prospect of spending pressure in Washington apparently weighs more on U.S. defense names than on European ones.
AMD and Data Centers: Strong Numbers, a Political Ceiling
AMD reported on Tuesday evening, and the data package was the strongest of the week so far. Third-quarter revenue rose 45 percent to $13.38 billion. Adjusted earnings per share came in at $2.09, against a consensus of about $1.95. Data-center revenue grew 97 percent to $8.5 billion. For the fourth quarter, AMD is targeting roughly $17 billion in revenue, well above the expected $16.2 billion.
CEO Lisa Su holds out the prospect of more than 80 percent revenue growth for 2027, against a consensus of 77 percent. The weak spot is consoles and PCs. Gaming revenue fell 40 percent, and AMD is planning for a double-digit decline in PC shipments in 2027.
The shares jumped more than 7 percent in premarket trading but have since given most of it back. At $488, they are barely above Tuesday’s close of $483.90. They remain far from the 52-week high of $658.52 and are down 24 percent over 30 days.
Analysts are split. Piper Sandler raises its price target from $600 to $650, and Morgan Stanley from $510 to $550. Goldman Sachs cuts from $700 to $675, and Wells Fargo from $700 to $650.
The price action carries the real message. At a price-to-earnings ratio of about 124, a strong outlook no longer buys a breakout while political risk hangs over the customer base.
The election has made that risk concrete. Goldman Sachs expects construction halts for data centers in Texas, Georgia and Michigan, which together account for 45 percent of planned U.S. capacity. In Texas, newly elected Governor Gina Hinojosa wants to push through a moratorium on new facilities. Nationwide, roughly 24 of 41 ballot measures to limit data centers have passed, based on preliminary counts.
The market is already sorting accordingly. Amazon and Microsoft are rising, while IREN is down about 6 percent in current trading. Nvidia and Micron are also below Tuesday’s closing prices. Chip investors should watch the data-center operators as an early indicator.
A moratorium hits their order books first and their suppliers’ second. Berenberg warns that U.S. growth could slow to about 1.5 percent in 2028, from 3.4 percent in the third quarter of 2026.
Should investors sell immediately? Or is it worth buying AMD?
Mid-Cap Earnings: The Outlook Outweighs the Rearview Mirror
Several mid-sized companies showed what the market rewards. Block rose 9.7 percent in premarket trading after raising its full-year gross profit forecast. McDonald’s is benefiting from U.S. sales that fell less in the third quarter than feared. Novo Nordisk raised its 2026 guidance.
Flutter is the counterexample. The betting company missed with revenue of $3.87 billion, against an expected $4.03 billion. New CEO Dan Taylor is suspending the share buyback and aims to cut a further $500 million in costs by 2029. That is a pivot from shareholder returns to debt reduction.
The lesson for small- and mid-cap buyers is to look for raised guidance, not backward-looking beats.
Rates: A Bond Rally Is Not a Policy Pivot
The yield on 10-year U.S. Treasuries fell to about 4.9 percent, and the dollar has slipped to a multi-month low. Gold rose about 3 percent to above $4,000 an ounce. Bonds are benefiting from the expectation that a divided Congress will restrain government spending.
The Treasury added to the mood by holding its refunding at $125 billion and dropping the word “at least” from its auction language. That opens the door to cuts in long-dated issuance in 2027.
The labor market argues against a pivot. According to ADP, the private sector added 86,000 jobs in October, beating expectations of about 70,000. Wage gains for job switchers were the strongest since March 2024. CME data show futures markets pricing a roughly 79 percent probability of a Fed rate hike in December. The eurozone, meanwhile, has lost momentum: its purchasing managers’ index fell to 51.7 in October, a four-month low.
The auctions of 3-, 10- and 30-year paper on November 9, 10 and 12 will show whether demand for long maturities can sustain the drop in yields.
Bitcoin: A Rebound Against a Hostile Capitol
Bitcoin trades at about $78,300 (roughly €69,900), up a little over 1 percent in 24 hours. It is still down 23 percent on the year. The election outcome was priced in, but the political backdrop remains difficult.
The Clarity Act, meant to set the legal framework for crypto assets, failed in the Senate in September by a vote of 49 to 50 and could stall until 2027. Crypto critics such as Elizabeth Warren and Maxine Waters are moving into key positions. One date is fixed: the GENIUS Act for payment stablecoins takes effect on January 18, 2027.
U.S. bitcoin ETFs have seen about $1.16 billion in outflows over three trading days. Analysts see a sustainable trend reversal only above $82,000.
The Takeaway
The election has not set the market’s direction so much as redistributed its winners. Renewables and small caps are collecting, while Musk’s companies, defense stocks and data-center operators pay. AMD’s chart shows that even excellent numbers hit a ceiling when the customers face regulatory risk.
Two events could overlay the election trade. On Friday, the official U.S. jobs report is due, with about 65,000 new jobs expected and unemployment at 4.2 percent. A strong print would likely put the rate-hike debate ahead of the election rally. Next week’s Treasury auctions then test how durable the drop in yields is.
Best regards,
The StocksToday.com Editorial
Ad
AMD Stock: Buy or Sell?! New AMD Analysis from November 4 delivers the answer:
The latest AMD figures speak for themselves: Urgent action needed for AMD investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 4.
AMD: Buy or sell? Read more here...
