After the months of fears and uncertainties, the US midterm election was finally over. US market surged after the results in which Democrats owned the House while Republicans held the Senate. The splitting gave investors a relief that the decision by Trump to continue the trade war with China might be interrupted. This led to a rise in Asia market just after the US midterm election results were as expected.
Earning season was over as well with great earnings by Apple and Alibaba. However, Apple missed its iPhone sales estimates and Apple announced that they might not be announcing the sales number starting from next report. This definitely will cause investors to lose confidence on Apple’s future, thinking that Apple might want to hide something especially the sales which may continue to drop in the coming quarters. Missed sales became the main concern since greater earnings were just because Apple kept on raising the price of iPhone. We might reach one day that iPhone is not affordable anymore and we will miss both sales and earnings though Apple are now trying to get revenues from streaming services.
Wynn Resorts shares plunged 15% after CEO sees “slowdown” in Macau despite beating its earnings per share and rising of its revenue. I bought in some yesterday since the market is just over-reacted. I think the “slowdown” is just temporary and it should not be a big deal in long term with the trade war tensions will finally relieve. Trump would like to see US stocks to perform well, since this could help him to win the President election two years later. So he will definitely not want to continue the trade war as we can see he was trying to “have talk” with China recently.
Trump said before that US will be the winner of trade war as the US stocks market kept on reaching peak before the imposing of taxes on China goods. However, sell-off started after US imposed taxes on China goods with China reimposed taxes on US goods. Trump started to realize that and he started to initiate “talk” with China. But it did not help much without a “real talk” and this became one of the reasons that his party lost the House.
Now, with the splitting, Trump will definitely be more tolerant and turn down his tone. This will be a good news for both US and Asia market.