The Morning Sixpack - November 6, 2024
Trump wins, America loses
1. Trump beats Harris
Trump is currently ahead 292 to 224 with only Maine, Nevada, Arizona, and Alaska not to be called. Harris only won one out of the four “blue wall” states she needed to get to 270 for the win. She lost Pennsylvania, Wisconsin, and Michigan. There isn’t much more to say.
Source: https://www.washingtonpost.com/elections/results/2024/11/05/president/
2. GOP takes Senate
With a near-certainty of losing the Senate majority, the Democrats gave up even more ground than anticipated. Worst case scenario: MAGA party gets to 57, D’s drop to 43. Yes, it was that bad.
Races still undecided: Nevada, Arizona, Pennsylvania, Michigan, and Maine. (Maine is leaning heavily for the D’s while all the other undecided states are tossups.)
Source: https://www.washingtonpost.com/elections/results/2024/11/05/senate/
3. GOP takes House (probably)
MAGA is up 200 to 181. It only takes 218 for the majority. Looks like MAGA will retain its House majority. Lots of races in the West are still undecided. The Democrats need 37 more wins. Seems highly unlikely at this point.
Source: https://www.washingtonpost.com/elections/results/2024/11/05/house/
4. Tesla and US bank stocks jump and renewables slump
Because, of course!
Tesla's stock has jumped following the election of Donald Trump, leading a surge among US bank stocks while renewable energy stocks slump. Despite initial concerns about Trump's potential impact on electric cars and clean energy, investors appear to be betting that Elon Musk, a Trump supporter, will benefit from the president-elect's policies.
Following Trump’s election victory in 2016, Tesla, along with numerous US bank stocks, experienced a significant boost in share prices. The reason behind this surge might be due to an increased belief that companies directly or indirectly linked to Trump and his administration would be given preferential treatment or policies. Given Musk’s known support for Trump, and Tesla being at the forefront of electric car and clean energy technologies, investors have shown heightened interest in Tesla's stocks. This highlights how political links and affiliations can significantly influence market sentiments and behavior.
However, while Tesla's stock rose, renewable energy stocks experienced a slump, potentially due to concerns about the Trump administration's stance on climate change and clean energy incentives. Trump has often expressed skepticism of climate change science and campaigned on a pledge to revive the coal industry, which could be seen as inconsistent with the growth of renewable energy. If Trump's policies favor fossil fuels over renewables, companies in the clean energy space may face more challenges.
In response to these potential challenges, Tesla and similar companies may need to adjust their strategy to accommodate the potential shifts in energy policy. Meanwhile, investors will be closely watching the direction of Trump's policies to make informed decisions.
Source: https://www.ft.com/content/6e323b66-a873-439b-9b32-6a869f54d1b1
5. JPMorgan CEO Dimon to remain at bank and has no plans to join Trump administration
JPMorgan CEO Jamie Dimon has no plans to exit his role to join Donald Trump's administration, according to an unnamed source. This announcement comes amid speculation that Dimon was being considered for a key role in the Trump administration.
The speculation about Dimon's future rose after his high-profile clash with President Trump over the response to the COVID-19 pandemic and racial disparities. As head of the Business Roundtable, an association of CEOs from major U.S. corporations, Dimon pushed for a more comprehensive national strategy on both issues, paving the way for debates with the administration. His hands-on approach and high-profile stature within the business community led some to believe that he was potentially poised to transition into politics.
However, the source emphasized that Dimon's current focus is on leading JPMorgan, one of the world’s biggest and most influential banks. He has been at the helm since 2005, leading the bank through the 2008 financial crisis and the ongoing COVID-19 pandemic. The recent announcement assures that Dimon will continue to wield considerable influence in the financial sector without shifting to explicit political roles. From an analytical standpoint, his continued presence at the helm of JPMorgan says a lot about the stability of the bank's leadership in uncertain times.
6. Pot stocks dive as Florida rejects legalization of recreational marijuana
Shares of cannabis companies dropped sharply on Wednesday after Florida voters rejected a ballot measure to legalize recreational marijuana. Despite significant investments in a campaign for this potentially lucrative market, the measure did not achieve the required 60% majority, passing only with 55% support.
Toronto-listed Canopy Growth and Trulieve Cannabis saw their shares fall by 20.4% and 44.2%, respectively. Tilray Brands dropped over 11%, while U.S.-listed SNDL and Cronos Group declined by 13.8% and 7.2%. Additionally, the ETF AdvisorShares Pure US Cannabis plummeted 24.1%.
Florida had been seen as a highly attractive market, with cannabis analytics firm Headset estimating that adult-use sales could reach between $4.9 billion and $6.1 billion in the first year. The passage of Amendment 3 would have allowed adults over 21 to purchase marijuana from medical marijuana treatment centers and other licensed locations.
Currently, 24 U.S. states have legalized recreational marijuana use, though it remains illegal federally. Florida’s prior approval of medical marijuana in 2016 marked a significant step, and major cannabis companies contributed heavily to the campaign group Smart & Safe Florida to advocate for this latest amendment.
Attention now turns to federal marijuana policy. Some analysts, like ATB Capital Markets’ Frederico Gomes, suggest that reclassifying marijuana as a less serious federal offense could offset the impact of the amendment’s failure, especially as support for reform grows.