Speaker 1Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the hosts and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Hey everyone, it's Wednesday, 4th of November, 2026, and we are the day after, or the night after really in the case of the U.S., it's middle of the night over there. This incredible election that we've just seen, absolute landslide, blue tsunami, whatever you want to call it, it blew all expectations out of the water by the margin of the Democrats' victory. And, you know, maybe I should criticize myself for putting out that last minute, but I'm not going to do that. I'm going to do it. I'm going to do it. I'm going to podcast. What if the Republicans hold the line yesterday? I think there were a couple of reasons I did it. First of all, I thought the guy argued a good case. And secondly, I've just remember, I just, when I, when I listened to that podcast, I was, I remember being so shaken by the, a couple of the previous election cycles in which Trump performed so much better than expected. You know, especially when he was there the second time around or on the ballot the second time around. And third time around. And you're thinking, well, do you really understand what you're getting with this guy? And apparently people did not. And now they know. And I think that is the message. So what do we read into why this guy was so wrong in his research? I think maybe one of the problems was he got down into his numbers. He saw the same patterns as before and assumed that the, some of these intangibles simply hadn't changed. And I was spooked by, by his running through the numbers and, and how he built his case. But I guess what did change, relative to those numbers. And I do fear for the, the guys, what was his name? Barth or whatever, his professional reputation after this call. But I think it's the intangibles and the intangibles being, and tangibles really as well, but just the intangible being, look, the emperor has no clothes. We, we went all in for this guy again, thinking stuff would change and it didn't change. And our, you know, we're, we're fearing for our affordability for our pockets. So the, the, how far our dollar goes, this war that was not supposed to happen and the whole optics of the billionaire bros, that's a bit more the, one of the intangibles here. This guy is not giving us the change that he said he would. And I think on the other side, the Democrats will run away with too positive a message on their side. When I think this was all about a profound rejection and rebuke to Trump, I do fear there was a quote I pulled off X. I don't even know who said this, but basically, the concern is that that group, that key group that went Trump and probably stayed away as much as they flipped sides in this election. There's a big group that is out there that is quote angrier and more dispossessed than ever unquote. And that could leave the country open for even worse demagoguery down the line. Who knows a lot of things to get through here. And I'll try to, I just have a whole list of things that I put, I tried to number just so I can make sure I got through every single point I wanted to make. But I think we should start with just some of the numbers. I mean, you've seen all of these before, but I just want to emphasize how profound this switch has been. I mean, you're talking about on the Senate race, so they're flipping everything in sight. The only one that might be in doubt is Alaska, but I'm confused about whether that last, what is it, 25, 30% of the vote that needs to be counted if those are going to tilt Democratic. And therefore, you know, we don't have a good picture of the fact that at the moment, at this snapshot moment I'm speaking, the Republican has a slight lead with, I think it was 72% of the vote counted. It doesn't really matter. The margin is massive in favor of the Dems. And there's some implications to that, that I'll get to, but just the scale of the victory and the new states that weren't even in discussion coming into view and actually flipping to the Democrats. So Texas, not only was it not close, but the Democrat, Tallarico won by 12 points in a state that went 13 points for Trump in 2024. That's a 25 point swing. What a horrific candidate that was. In South Carolina, that went 18 points for Trump. The Democrat won against Lindsey Graham's sister by four points, a 22 point swing. In Iowa, it was plus four versus a plus 13 in the prior election. In Kansas, plus five versus plus 16. And Mississippi is in play. There is a 43 vote difference in the count with about 5% left to tally. It could be a week or more before we know what the result is there. Mississippi, which went 21 points for Trump, is in play too. The quite interesting actually Senate there for the Democrats, a guy that's a bit more grassroots, not sort of an establishment type figure. Look into it if you're curious. But in any case, let's take Mississippi and Alaska out of the equation. That leaves the Senate 54, minimum, 54 to 46. And if both of those states go to the Democrats, it'll be 56 to 44, the Democratic majority. That has profound implications because you don't have these kingmaker senators, a Bernie Sanders or the likes, if it was, you know, leaning for the Democratic Socialist sort of contingent or more progressive issue, you know, making the difference between whether something passes or not. Of course, it's really President Trump that weighs bigger. But in any case, sometimes you could see the administration coming to some kind of agreement on some industrial or energy policy. And then a Bernie Sanders could raise an objection or a Fetterman could block something, a Fetterman being a Republican, could vote Republican on any given day. It clears that whole issue away. Similarly, in the House with such a strong contingent or strong advantage. Right now, as I'm speaking here, the last I saw was something like 228 called Democrats to 139 called Republican seats with something like 68 seats yet to declare. If that goes approximately half-half, we're talking about 260-plus for the Democrats. I mean, the Kalshi odds were more like the high 230s. So that is a profound shift and it's a huge majority for the House Democrats to work with. Yeah, so those are the numbers. And then on the governors, seven, maybe even eight have flipped to the Democrats. Nearly everything that was flippable is flipping. In Ohio, you had this horrific Vivek Ramaswamy and his tactics backfiring. He's losing that one. Iowa, Kansas, Texas. Texas, for goodness sake, that wasn't supposed to be in Iowa. Possibly Nevada, Oregon, and Alaska as well. Those last three are not fully counted yet. And that means that in many cases, this whole data center issue is on the ballot. And I'll have some more on that as well. Somebody's saying that there were 30, what was it, 30 ballot measures, so-called, to restrict data center construction. 29 of those 30 have passed in favor of restricting data centers. Interestingly, the AI trade is really not concerned about that and makes you wonder whether this was seen as likely to happen ahead of the event because we did see this big markdown in a lot of the AI story, at least from the crazy pump into the June highs. I think there are other issues afoot in the AI trade, but it's quite interesting that we saw that immediate market reaction of a huge sell-off in tech, and that has completely turned around. And we were at least last I looked, we're posting positive numbers. I even saw some crazy, some show with Joe Weisenthal, is that his name, from Odd Lots on it saying that, oh, actually, the powers that be have engineered this blue wave scenario because they want to restrict construction to raise the price of compute. Yeah, good luck with that logic. Whatever. Data centers are a key constraint. The powers that be are, you know, launching some kind of operation here to engineer the result that we just saw. I think that was the American voters that engineered that. Let's see. I'll just run through these one at a time. My favorite headline, cheekiest headline of the day went to somebody on X who said that Iran has successfully achieved regime change in the U.S. I do think it was that cost of living. But I also think if we think about what the mistake that Trump made was, and that is that he took the wrong message from the presidential win. The idea is supposed to be you play somewhat of a partisan game in a presidential campaign, and then once you win, you move a little bit more towards the middle, depending on the scale of your mandate. And his mandate was not terribly strong. He did win the popular vote. He won the electoral college, but the popular vote was divided or was an advantage of a very small margin. It was as if it was a sweeping mandate to enact radical change. So he wasn't serving all Americans critically, in addition to all of the other stuff that got him into trouble, the corruption, et cetera. So as mentioned, it avoids the, you know, these close result dramatics, not just in terms of, you know, kingmakers in the Senate or otherwise, but this whole, you know, that he would send his Department of Justice out to challenge election results and create some kind of constitutional change. And so, you know, he wasn't interested completely out of the frame here. It's not going to happen. The results were so overwhelming, he's not going to cry foul or can't cry foul in any meaningful way, even if maybe some single election somewhere might be challenged. I don't know about that, of point, that impeachment is an obvious thing that's going to happen. And remember, impeachment does not mean he is thrown out of office. That requires that two-thirds vote, which is not going to happen unless things start to look so bad that, you know, some number of Republicans can be brought on side. I doubt that. I would suspect that some kind of deal is brokered or that Trump would resign a bit a la Nixon, who, again, decided not to face that vote back in 1974 because of Watergate, but just rode off into the sunset with a resignation rather than face the vote because his party was indicating to him that they were going to vote against him. So that means lots of investigations. His side will say it's all witch hunts, but how much of a fight are the Republicans going to put up when the number one liability right now is any association with Donald Trump as we look forward to the 2028 election? Election cycle. So he is a double, triple lame duck, not just because he's not going to run again, but his own party will be running as fast as they can away from him because of his unpopularity, saying, I never knew the guy. I didn't really like him all that much in the first place, and trying to, you know, remove their association with him. So I'm curious what the, you know, how, what the party discipline is. How do they look for new leadership? What is, you know, what does the opposition look like in this situation? In any case, we can be sure that all kinds of corruption and investigation are going to happen. So I'm curious what the, you know, move forward. Will again, will he, how will he fight that? How, how, how, how much will he put up this threat of his veto? And he put a cap on his social media site, the Truth Social profile, you know, like a baseball cap with the word veto written across the front. Obviously he's going to be in a belligerent mood and as he always is when, when facing opposition, but how, how much so does this lead to these government shutdowns? Debt ceiling debates, et cetera, or will he try to look for some kind of legacy building on, on other fronts? Yeah, we'll see. That's another question. Again, I was just furiously scribbling notes down this morning, trying to absorb everything. So some of these are a bit in haphazard order. I do apologize for that. And I think one of the interesting things is, you know, we've, we've, we've broken the spell of Trump. This is, we had three presidential election cycles with Trump at the top of every headline. As my son, who's 24 years old said, you know, I've, I've grown up ever since I've had awareness of headlines. It's all about Trump every single day. This, this spell will be broken. I mean, we may have two more years of this, but this spell will be broken. We need to move on. Who is the new Republican candidate? There are too many that are close to him that have too much association with him. I think that'll be super fascinating as we forward to 2028. And I suspect whoever does emerge as the Republican candidate will be quite far from Trump. himself. Could it be a new sort of cult of personality candidate, somebody that's an independent type of person that just takes on the Republican mantle? I don't know. But let's, let's see, you know, break out the popcorn for that one. Then I think on the flip side, the Democrats are almost certainly going to take away the wrong message. I think there are some very earnest voters out there that were very much in favor of the more progressive part of the, of some of the candidates, the Democratic Socialist candidates or otherwise. But I think your random establishment Democrat, or mainstream Democrat will take away the wrong lesson that this is some kind of endorsement of them, when I think really, this whole election needs to be positioned as a profound rebuke of Trump and everything he stood for and his behavior. And, you know, just just a big no to that more than a big yes to the Democrats, with again, with some exceptions, of course. And then at the same time, talking about double and triple lame duck, one of those lame duck parts of that lame duck setup, is think about foreign powers in and their negotiations in dealing with Trump. And of course, the presidency does maintain this ability to impact and basically control foreign policy. You know, we've got two years, and we're going to have a new candidate. And given the overwhelming rejection of him, it could very well likely be a Democrat with a very slightly, with a slightly different take on things, to say the least, or a very big take, a different approach or take on things. And in negotiations, foreign powers might tend to want to sign maybe two year deals, and then look forward to something changing on the other side of that. I do think the whole supply chain issue, the wanting to gain independence from China on that front is bipartisan and industrial policy will continue to a large degree. But this behavior from towards traditional allies could mean that those traditional allies take a slightly different approach. And Trump will have to moderate his his approach if he wants to get anything done with with almost anybody, I would suspect, or does he take a belligerent attitude and, you know, continues to be a bull in a china shop? I don't know. But that's one consideration as well. Then I think we have to remember who else will pay the price are all those people that kissed up to Trump, the tech bros, the whole the whole nerd Reich sphere, that book that I'm referring to, you have a new, you're gonna have a new population, sorry, a new populism, here against not just Trump, but the whole billionaire corrupt class, as they're probably seen by many, which will mean it'd be likely more likely to see antitrust regulation proceeding, maybe not under Trump, but certainly somewhere out there over the horizon. So beware for the, you know, the implications for mag seven, and for taxes, etc, on the ultra rich. And then, you know, in general, Trumpism stripped of Trump, what is that? What is the core that remains post Trump super curious on that front? And then, you know, I think, you know, I think, you know, I think, you know, I think, you know, I think, you know, I think, you know, I think, you know, I think, you're going to see a lot of people on that front. Then I've mentioned, you know, the Dems slowing down the AI trade, what does that look like right now, the market is not playing on that level of fear. So we need to see how that develops in coming days. And then, you know, most, most urgent, I think, in the wake of this midterms is not really anything to do with the midterms, per se, and Democrats taking power of Congress as of January 3. But are we going to see something happen in Iran? I think Trump is very much blaming both Israel and Iran. I'm wondering if that's the main reason the dollar is off a bit here. And curious if we are seeing the beginnings of something, you know, moving on the dollar front to the downside. As mentioned, who will Trump blame? I think I've just talked about Iran and Israel, but especially Israel. And here, I think Trump will get especially vengeful on, you know, the already there's talk that he wants to end the all the military aid to Israel, at least through the end of the year. He's saying they can pay for it themselves. There is an increasing awareness around Israel's influence via its political action committees across the U.S. and in elections. The Israel issue is massively much more to the fore in the U.S. and the whole buying of elections, et cetera, at least attempts to do so also with Musk's insane injections of capital into various campaigns. I suspect we're going to see major overhaul, major reforms of this in coming years. But in the meantime, Israel loses, Putin loses, anybody associated with Trump really loses on this. And that could mean a lot for foreign policy, obviously. We're already seeing the next point, Musk companies. I put this one out there as especially when you're seeing in Texas the Tallarico win and the governor moving to the Democratic Party. If there's anybody that's going to be vengeful, it could be Democratic politicians in Texas. They're certainly going to be slow to approve any kind of expansion of facilities. They're going to be very, very anti-Musk. And because of his antics, because they feel like he's trying to unfairly tilt what's going on on X, of course, funding their opponents. So you can bet there will be some protests there. And you do see SpaceX off almost 4% overnight. That was the last I looked. It could be very different by the time you're listening to this. Tesla off over 4%. Then somebody pointing this out, I think it was Jim Bianco, and it's a great point. The scale of this rejection with likelihood is that we carry into when you get such a profound earthquake, it means something for the next election cycle. And that means a Democratic win in 2028. They're going to go after the budget like they have to because of the dynamics of the situation. And the easiest thing for them to do for their voting population is to raise corporate taxes back to somewhere resembling where they were before. And maybe some of the taxes on proprietorships and business owners as well. So this is not a long term thing. long-term good for U.S. companies, obviously, if the corporate taxes are going to be raised, let's say, 10% in a couple of years. And I think it was Bianco as well that was trying to build the argument. It looks like a little bit of a stretch for me that you can sort of write this across the board, that it helps to have such a strong Democratic majority because, again, this whole Kingmaker issue, that there's a division within the Democratic Party for those that are quite in favor of AI potentially, like unions and otherwise, because unions are seeing a heck of a lot of work for electricians, construction workers, just good old-fashioned blue-collar unionized labor needs for data center construction. They're all in favor of AI, whereas the Democratic socialists are more skeptical about the impact, I suppose, because many Democratic socialists' voters are knowledge workers that more fear the disruption of AI and their job prospects. But that's. Something I'll reserve for judgment. I just thought it was an interesting comment. I was trying to ask lazily just because I was pressed for time, you know, what are the stocks that are actually benefiting from this outcome to chat GPT? And I pulled out a couple of names. Centene, it's a company that deals with especially Medicare and Medicaid benefits. It was up strongly after hours on this result. First, Solar, a solar company, obviously, up 8%. You're imagining that, you know, alternative energy can come back on the agenda in the coming years with Trump weakened here as he is so anti-alternative energy. And then here in Denmark, Vestas, the wind energy company, had a very nice open today. I strongly presume that is due to this U.S. election outcome. Yeah, so that pretty much rounds out my thoughts on, immediate thoughts, at least on this election. Super interesting. We saw the knee-jerk risk off. You know, didn't surprise me that would have been if somebody said, look, what if it's a blue-collar unionized labor need? I would have said, well, it's a blue-collar unionized labor need. I would have said, at least knee-jerk risk off, but I wouldn't know beyond that. And well, beyond that, it turns out to be that we're turning back around again. We need to give it a little bit of time here before we draw any strong conclusions. Got the dollar a little bit weaker. Treasury's tried to rally on this. I guess the idea being that we're not going to see profligate fiscal if, you know, if Trump is handcuffed here and we get gridlock. But that move is kind of reversed as well. There are huge questions looming still on the ability of the U.S. government to fight this. Finance itself with the current framework. Something more dramatic might be needed. And then I'll refer back to yesterday's podcast, at least yesterday's podcast before the last-minute panic podcast on feeling like I wasn't sure what was going to happen at this election yesterday. So then we have, yeah, there were earnings rolling in yesterday as well. We had AMD after the close yesterday. They were reporting strong results, strong outlook, up 7%. Same for Arista Networks of 9% and Supermicro. I've not delved into the details because of lack of time with the focus on the election. Nova was also up on the open today with improving results. I believe they're injectable with Govi, if I recall from an internal call this morning, is seeing actually downright shrinking numbers. But that pill form of their GLP-1 medication is growing strongly, apparently. And then we have the, you know, macro data that hasn't gone away. We have, the ISM services up later today. We get the, obviously, the jobs report in at the tail end of the week. There's been nothing to suggest it's the sort of low-hire, low-fire economy, but also a lower earnings growth. And I think that's a key factor as well here that has helped to feed the affordability crisis and dissatisfaction in the U.S. So we'll talk about the data as it comes in. There's also this quarterly refunding announcement up today where the Treasury announces things like potential. It's been the talk of the town anyway that Besant could possibly move to stop these 20-year auctions. The 20-year note is often the part of the yield curve where you see the highest yields because either you want maybe a 10-year or less, or you want the full max duration 30-year. And this 20-year sits in kind of an awkward place and often is that high point on the yield curve. They could get rid of that. There's even talk of reducing the 30-year auctions. Let's see. We're in a. It's kind of slow, of course, by not growing the size of coupon auctions at all, coupon auctions being two-year notes or longer U.S. Treasuries, because the nominal economy continues to grow at 6%, 7%, whatever the rate is these days. When you freeze the auction sizes, they become smaller as a percentage of the economy, which means you're financing at the bill duration or very short-term bills. Generally, sub one year or less. So that's something the Treasury market will certainly focus on after we've seen this decent little drop in yields in recent weeks. Oil market is under pressure, but I do not know what to do with that because what are the odds of these negotiations turning into something? Could we have some kind of tenuous ceasefire for a few weeks or do we bomb tomorrow? I simply have zero idea. So I won't waste your time on that. We'll get Ola on here to talk about energy in coming days. Interesting to see as well, gold and silver posting a very nice recovery. I think that helps to put in a strong base that they've done so. And so that looks like the first comeback. And given that we just saw a massive event risk coming and going, that encourages the idea that this was a key little something that just happened here. Could be backfilling, obviously, but this is the first point of interest also that it happens after it punched down below 4,000. Now we're back above 4,000 in gold. At least we were just before I came in here. And similarly, that $50 area on silver. So let's save that one for the notice. I would suspect as well that any potential for those to resume a new bull leg, or at least to establish a trading range between here and the highs that were posted at the beginning of this year would coincide with a dollar turn of direction as well back to the downside. Still awaiting further evidence there. The dollar has to do, or the dollar has to do, I don't know, I don't know. The market has to do a bit more work to form a dollar picture here, which is, which it has not done yet. The Riksbank, we have three central banks out for the rest of this week. Well, two now because the Riksbank was out this morning. They're doing something interesting by stopping some of this swap management of their FX reserves. So they're going to just stick with a more straight FX reserve regime. It's a bit unclear what that really means day to day. Could mean Swedish krona upside if they don't move to a something about when the when the Swedish krona is going down to ameliorate the impact on the valuation of the reserves. But for now, they did hike today to 2%. So they're not as far behind as they were, did say that the hiking could continue. They did bring the currency into the situation, even though we've seen a pretty decent, to say the least rally in the Swedish krona. I thought that was kind of interesting. So, you know, with with risk making a little bit of a comeback here. And you know, if that continues, and oil continues to stay orderly, I think that helps the Swedish krona continue to rally, especially potentially versus the Norwegian krona, which has had a blazing run higher of late. There's been a big shift lower in rates. I think the market is smelling out a bit of a pivot here. With this quite profound Norwegian krona revaluation we've seen in recent months. There's good reason to expect the Norris Bank is going to sound a bit less hawkish. So look for that tomorrow. I think there's some potential to knock you versus stocky. So Norwegian krona versus Swedish krona, continuing to consolidate to the downside. That's been a very choppy chart recently, by the way. And of course, the huge risk to that is some massive resumption of Iran hostilities, etc. A new spike in the oil price, what have you. Then we have the Bank of England, they are going to deliver that 25 basis point hike in all likelihood tomorrow. Sterling, I'm suspecting it's getting a little bit overdone here, unless we're getting new stress in the whole Eurozone, you know, sovereign spreads trade or something. I think Bailey will continue to kind of drag his heels relative to what the market is pricing, which is that three to four hikes in the coming 12 months. But let's see. Euro sterling has had quite a quite a drop. Yeah, and that does that. I don't even have any links for you today for the podcast episode description. I just wanted to get my sort of a big brain dump of my thoughts. Here we are in the first phase of this post election reaction. We'll continue to put some further thoughts together. Listen to what the rest of the market is saying and in market developments as they come in. And yeah, let's let's see where this takes us. I think a very interesting election to say the least a historic rebuke of Trump. It feels like a mean reversion back to something else. Not this whole authoritarian grab and we're going to have to be ruled by strongman. But I'm not sure that we have the answer for where this heads. It could just be a new strongman that comes into the frame. I don't know. Let's see. But it's it's remarkable stuff. And we'll continue to take you through it in the days ahead. So yeah, that's it for today. Stay careful out there and I'll be back tomorrow with the next Saxo Market Call. Saxo. Serious trading worldwide. We'll see you next week.
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