Here are the most important information investors need to start their trading day:
1. Markets and Blocking
U.S. stock markets were a bit ahead of Election Day as investors bet on partisan gridlock in the upcoming Congress. However, Wednesday morning, the balance of power had not yet been decided. Early results showed Democrats beating expectations (more on that below), with several key seats still up for grabs. Many investors are keen for parties to share power in Washington, seeing it as a way to contain spending, especially as high inflation grips the economy. And as long as inflation is high, the Federal Reserve has said it is ready to keep raising interest rates – a promise that weighed on stocks. Read live market updates here.
2. Status of Major Races
Let’s start with the Senate. Democrat John Fetterman flipped Pennsylvania’s GOP-controlled U.S. Senate seat, beating Mehmet Oz, the TV doctor who was backed by former President Donald Trump. Sen. Marco Rubio, R-Fla., won his reelection bid hands down, while Trump-backed JD Vance held off the Democratic challenger, Rep. Tim Ryan in Ohio. Four major races remain undecided, either too close or too soon to be announced: Arizona, Wisconsin, Nevada and Georgia (which could end next month). If the Democrats win two, they hold the Senate. The fight for the House of Representatives is also close, though GOP leaders remain confident it will come under their control. Read election updates here.
Read more: Trump’s favorite candidates disappoint on Election Day, raising questions about 2024
3. Meta is laying off thousands of people
Mark Zuckerberg’s future metaverse company, Meta, announced on Wednesday that it would lay off more than 11,000 employees, or about 13% of its workforce. The job cuts come after a sobering earnings report from Meta last month, when it showed rising costs and falling ad revenue. Zuckerberg has poured billions into his fledgling online metaverse, which has suffered from declining user numbers and widespread mockery over its cartoonish graphics. Shares of the company, which also includes social media apps Facebook and Instagram, have fallen more than 70% this year as of Tuesday’s close. Its market cap, once over $1 trillion, is now around $255 billion.
4. Tragic Kingdom
Not great, Bob. Disney’s earnings report on Tuesday disappointed in almost every way. The profit largely missed Wall Street expectations. Revenues were also insufficient, driven by the weak performance of the company’s media and entertainment segment. Even the silver liners were offset by gray clouds. Disney+ streaming subscriptions beat expectations, but its high costs weighed on bottom line, and the company expects growth to slow in the current quarter. Disney’s parks and cruises segment posted record revenues, according to CEO Bob Chapek, but even that fell short of analysts’ projections.
Read more: Disney wants you to focus on revenue and profit rather than subscribers – but not now
5. Fierce fighting in Ukraine
After a series of successful counter-offensives to retake territory from the Russians, Ukrainian forces find themselves in near stalemate conditions on the front lines of the war. “The situation is difficult on the whole front. Fierce positional battles continue in some regions, as before. And it is especially difficult in the Donetsk region, as before,” Ukrainian President Volodomyr said on Tuesday evening. Zelenskyy. “The occupiers are suffering extremely heavy losses, but their order to move to the administrative border of the Donetsk region has not changed. We are not ceding a single centimeter of our land there.” Read live war updates here.
– CNBC’s Jesse Pound, Yun Li, Jonathan Vanian, Sarah Whitten and Holly Ellyatt contributed to this report, as did CNBC.com’s political team.
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