Good Morning

• Donald Trump made strong gains in the 2024 presidential election with support from Hispanic and working-class voters without a college degree, winning more votes in most parts of the US. According to Edison Research, his share of Hispanic voters rose to 46%, up from 32% in 2020. Young Hispanic men in particular supported him, with 55% voting for Trump. His economic policies, which promise protection from global competition, and conservative values such as family orientation and religion were decisive factors. Even with no college degree and economic worries, many voters leaned toward Trump, giving him big gains in key cities and counties.
• In Germany, the governing coalition under Chancellor Olaf Scholz has collapsed following the dismissal of Finance Minister Christian Lindner of the FDP on Wednesday, pointing to early elections. Scholz is now planning a minority government with the Social Democrats and the Greens and wants to hold a vote of confidence in the Bundestag on January 15, possibly triggering new elections by the end of March. Scholz accused Lindner of blocking budget decisions and putting party interests before the good of the country. The coalition was split over the issue of economic recovery, with Scholz calling for government investment and the FDP insisting on austerity measures and less regulation. The political rift could boost populist forces such as the AfD and affect stability in the EU, as France is also currently politically unstable.
• Israeli airstrikes in Lebanon killed at least 40 people in the region around Baalbek on Wednesday and injured 53 others. The attacks are increasingly targeting Hezbollah strongholds, particularly in the southern suburbs of Beirut. The conflict between Israel and Hezbollah has been escalating since September, with over 3,000 deaths in the last year, especially in the last six weeks. Peace efforts, including a US-brokered ceasefire, have failed. Hezbollah has fired rockets at Israeli targets in response. A diplomatic end does not appear to be in sight for the time being.
• According to the EU climate observatory Copernicus Climate Change Service (C3S), 2024 will be the warmest year since records began. By October, global temperatures were already so high that a new record is certain. The main cause is climate change, said C3S Director Carlo Buontempo. For the first time, the Earth will be warmer than pre-industrial levels by more than 1.5°C on average this year, which is contrary to the Paris climate goals. Next week's COP29 climate conference in Azerbaijan is expected to decide on increased funding to combat climate change, but expectations are dampened after Donald Trump's election victory.
• Jörg Kukies becomes the new Finance Minister following the dismissal of Christian Lindner. The former State Secretary in the Chancellery and close advisor to Chancellor Olaf Scholz will take over the post. There had previously been speculation that Economics Minister Robert Habeck could take over the ministry on an interim basis, but he had already declared that he would not be stepping in as Finance Minister. Kukies had previously worked as State Secretary in the Federal Ministry of Finance.
• Taiwan will help companies relocate their production from China as Donald Trump, the new US president, has announced high tariffs on Chinese imports, according to Minister of Economic Affairs Kuo Jyh-huei. Trump plans to impose 60% tariffs, which could have a significant negative impact on China's growth. Taiwan has already encouraged its companies to invest outside China to counter Beijing's increasing pressure. Kuo said aid would be provided “as soon as possible”. There are also plans to support supply chain companies such as chip giant TSMC and GlobalWafers investing in the US. Taiwan is also hoping for a comprehensive trade agreement with the US.
• Beyond Meat has lowered its sales forecast for the year as demand for expensive meat substitutes such as plant-based meatballs and steaks remains weak. Consumers are increasingly turning to cheaper alternatives, and demand is also falling in restaurants such as McDonald's. Although Beyond Meat was able to improve margins thanks to lower material costs, quarterly sales only rose by 7.6% to 81 million US dollars. The annual sales forecast is now between 320 and 330 million US dollars, which is below the original expectations.
• Taiwan's China Airlines is on the verge of splitting a multi-billion dollar order for long-haul passenger aircraft between Airbus and Boeing. The decision involves up to 20 jets, half of which could come from either manufacturer, and could be worth up to 4 billion dollars. The choice of cargo planes, however, remains uncertain, partly due to the outcome of the US presidential election. Taiwan, which wants to strengthen its ties with the US, has concerns over previous statements by President-elect Donald Trump that criticized the island on defense and the semiconductor industry. China Airlines, majority-owned by the Taiwanese government, insists the aircraft choice is being made without political pressure.
• Donald Trump's announcement to increase US tariffs on Chinese imports to 60% poses a significant threat to China's economy, which is now more vulnerable than during his first term.  Main differences: Real estate market crisis: while in 2018 the real estate market was strong and accounted for around a quarter of economic activity, the sector has been in severe crisis since 2021. This weakness is now also weighing on public finances. High debt: The crisis in the real estate sector has led to high levels of debt for local governments, limiting China's ability to respond to external shocks. Weak domestic demand: Low wages, high youth unemployment and an inadequate social welfare system are depressing consumption and hampering economic growth. Deflation: Weak demand and oversupply in industry increase deflationary pressure, which puts additional pressure on the economy. Limited scope for currency devaluation: The yuan devaluation could not fully offset the tariff shock, as a devaluation of 18% would be necessary to compensate for the planned tariffs - a risky undertaking given the capital outflow risks. The current situation makes China's economy particularly vulnerable to Trump's tariff threats, as there are no one-off factors such as the COVID-19 pandemic or the Ukraine war to provide relief.
• Trump: What impact will his election victory have on AI regulation?
• It was confirmed yesterday - Donald Trump is the 47th President of the USA. And this will also have an impact on the country's AI regulation. Because: Trump has repeatedly stated that he wants to abolish Biden's AI policy from day one and has allied himself with AI giants who are in favor of greatly reduced AI regulation. (TC)
• Chip maker Arm: 90% share price rise - with 0.6% revenue growth Softbank-backed chip maker Arm has seen its share price rise by almost 90% this year - making the company one of the most highly valued stocks on the market. Despite this rise, the company expects adjusted revenue growth of just 0.6% for Q2 this year - which is unimpressive compared to other AI companies. (BBG)
• Construction bankruptcy: More companies from Gröner's real estate empire slide into insolvency. Following the umbrella company, further property companies from Christoph Gröner's construction empire have now also had to file for insolvency. Two projects in Frankfurt and Leipzig are affected. (MM)
• Northvolt: Can still receive subsidies in Schleswig-Holstein in 2024 The financially troubled battery manufacturer Northvolt can hope for a rapid payment of subsidies in the three-digit million range in Schleswig-Holstein. (KN)
• UK: Launches AI safety initiative for businesses The UK government has launched a new platform to support businesses in the safe use of AI. This initiative aims to minimize the risks associated with AI and help businesses integrate the technology responsibly. (FT)
• BMW profit: plummets by more than 80% The problems with brakes supplied by Conti and disappointing sales in China weigh on BMW in Q3. Profit falls by almost 84%. However, BMW boss Oliver Zipse is sticking to the recently revised annual forecast.
• United Emirates: Investing $97 billion in Africa - more than China or USA- to strengthen its economic independence from oil.
• Commerzbank: presents good figures amid takeover dispute
• Siemens Healthineers increases sales and profits despite weaknesses in China and climbs to the top of the DAX.
• Fresenius reaches its highest level since 2022 as it raises its annual targets after a strong summer.
• Hensoldt benefits from rising military spending, climbs on the stock market and dominates as the strongest MDAX stock.
• Tesla rises as Elon Musk's support for Trump positions the company as a potential winner of the new presidency.
• Solar stocks such asFirst Solar and Sunrun fall sharply as Trump's election win could slow the clean energy boom.
• Super Micro Computer is losing ground after its preliminary quarterly results came in below expectations.
• Bank stocks such as Bank of America and JPMorgan rise as Trump's election is met with growth optimism.
• Oil companies such as Chevron and Exxon Mobil gain as Trump's policies are seen as positive for the fossil fuel industry.