ONE BIG THING
A “stunning rebuke”: Trump says he will accept midterm results—but don’t expect him to be chastened by defeat
It was a “stunning rebuke” to President Trump. That’s not Fortune’s opinion, by the way. The words “stunning rebuke”—and variations on that theme—were the choice of dozens of front pages reporting on the midterm election results today:
“Democrats Take Congress in Stunning Rebuke of Trump,” the WSJ said. “Party Flips Senate and House as Voters Deliver Stunning Rebuke to Trump,” the NYT declared. “Americans deliver stunning rebuke to Donald Trump as blue wave sweeps country,” the FT wrote. “Texas Turns Blue in Stunning Rebuke of Donald Trump, Elon Musk and GOP,” Bloomberg said.
France’s Le Monde originally headlined its story as a “stunning rebuke for Trump” but, perhaps sensing that the term was already overused, later changed it to “spectacular rejection” (you can see the original in the URL).
The results were so sweeping—the Senate stood at 54-44 in favor of the Democrats this morning, with the House at 228-129—that even Trump appears to accept that reality has changed around him. He told Fox News last night, “I think the Democrats did a good job, I really do, I think they did a good job. They fought hard.”
Crucially, Trump also said he would accept the results. He told the NYT he was “absolutely willing to accept those results” and would work with Democrats. “We’ll, you know, look forward to working with them … We’ll probably work something out.”
But don’t mistake this for a sign that Trump will be chastened and change course on the issues that cost him the election, such as the war, tariffs, and the price of gas. Chris Ruddy, the president’s friend and CEO of Newsmax, told the BBC this morning that although the results were “horrendous” for Trump, “he’s not a man that reflects. He’s got sort of two drives, fast and faster, in his gearbox. I think he’s going to continue to pursue his policies by executive order and there will be a lot of battles.”
“The president likes to respond usually with brute force,” Ruddy said.
MIDTERM ELECTION RESULTS:
Trump promised every adult $5,000 if Republicans kept control of Congress. Thanks to the Blue Tsunami, taxpayers won’t have to blow up the debt – Catherina Gioino
‘People really effing hate data centers’: How the AI buildout became the midterms’ affordability issue – Catherina Gioino
‘This might just be the biggest defeat for big money in politics’: Billionaires poured hundreds of millions into Tuesday’s races and still lost – Catherina Gioino
Ohio already has 125 local data center moratoriums. Early results from its 21 ballot measures on AI infrastructure have determined there will be more – Sasha Rogelberg
Susan Collins’ Maine concession could leave New England without a Republican in Congress for the first time since the 1850s – Catherina Gioino
Asked about the cost of living, JD Vance joked about Jon Husted’s butt, then admitted Republicans fell short. Days later, Husted lost Ohio – Catherina Gioino
‘Lawyer up’: Democrats take the House, and warn Trump’s family businesses are first in line for subpoenas – Catherina Gioino
MORE FROM FORTUNE
He Never Ran a Company. Now He Runs Anthropic | Fortune Daily
OpenAI hires Uber President Jill Hazelbaker to lead communications, filling a critical role that was curiously vacant for 10 months – Emily Forlini
AMC’s A-List members now make up 20% of U.S. attendance. Its $4 billion debt is the harder test – Sofia DiStefano
Apple warns rogue AI agents could ‘conceal’ and ‘manipulate,’ causing unintended consequences for its business – Sebastian Herrera
Meta says automation wrongly took down No Kings and a Senate candidate’s page. It’s automating more anyway – Molly A. Wallace
THE MARKETS
Gridlock and good vibes: Markets rally as Congress goes against the White House
It was as if the recent carnage—with the S&P 500 down a grueling 2.64% over the last month—never happened. All of a sudden, the global markets are in a buoyant mood. The major indexes in Europe and Asia were up across the board this morning (with the sole exception of Japan’s Nikkei). U.S. futures were up before the open in New York. Even the price of oil declined.
No prizes for guessing why: The midterm results promise deadlock between the White House and the U.S. Congress—and markets love the certainty of knowing that there will be few legislative surprises over the next couple of years.
- The S&P 500 closed up 0.36% yesterday. Futures are up 0.8% this morning.
- In Europe, the Stoxx 600 was up 1.14% in early trading, and the U.K.’s FTSE 100 rose 0.85% before lunch.
- Asia: South Korea’s KOSPI was up 0.62%. Japan’s Nikkei 225 was down 1.42%. India’s Nifty 50 was up 0.63%. China’s CSI 300 was up 2.31%.
- Brent crude declined to $102 per barrel.
- Bitcoin rose to $78,406.
After the midterms, the only way is up for stocks, history says
Midterms are good for stocks, in the sense that they tend to mark the low point of the year for equities, and once the results are known a huge amount of uncertainty is removed from the market, according to Jim Reid at Deutsche Bank.
The “S&P 500 has risen after every U.S. midterm election since 1998, with average annual gains of nearly 12%,” according to Chris Beauchamp at IG.
In fact, the historic track record is even better than that, Deutsche’s Reid told clients: “The S&P 500 has been higher 12 months after the election-day close following every midterm from 1946 to 2022. The average gain is +14.4% and the median +13.7%.”
AI-linked tech company debt hits record high, exceeding dot-com era excesses, Wells Fargo says
The use of debt to fund AI capex has exceeded the level of that issued by telecom companies in the dot-com bubble 26 years ago, according to Ohsung Kwon and his colleagues at Wells Fargo.
“We estimate 33% of capex has been funded with debt this cycle as of 3Q, including off-balance sheet activity,” he wrote in a note to clients. “That’s a big jump from 22% as of 2Q.”
In October, companies issued an additional $141 billion in AI debt, bringing the year’s total to $623 billion. “The YTD surge has pushed tech debt to ~15% of total non-bank corporate debt, marking all-time highs,” Kwon says.
“NOUS SOMMES OUVERTS!”
Paris is not the cauldron of chaos depicted in the media (but it could be after next April)
Suppliers of plywood are doing a roaring trade in Paris right now. All over the French capital, shop owners and restaurateurs have boarded up their windows against les manifestations—protests over a lack of education funding which have frequently devolved into rioting. Shops that aren’t boarded up sometimes have cracked windows, where the looters have failed to gain entry.
Fixed to the boards are paper signs, saying “Nous sommes ouverts!” (We are open!) Business hasn’t stopped just because of politics.
In fact, as Fortune discovered on a visit to Paris recently, the capital is not—as social media would have you believe—a disaster zone of barricades and flying bottles. Quite the opposite. If you hadn’t read the news, you wouldn’t even know there were protests going on. Yes, there were 770 arrests nationwide on Saturday and Molotov cocktails were thrown at the police. But I took an Uber twice through la Place de la République—that’s the square with a big statue that demonstrators often climb onto—and didn’t see anyone there.
The city was not, as some Wall Street analysts have suggested, on the brink of civil breakdown.
The best example of this phenomenon—that the reality of the French protests is in fact much more boring than the viral videos suggest—was captured by this Instagram account, which intercuts scenes of chaos from the TV news with humdrum images of Parisiennes picking through street markets and drinking coffee in the autumn sunshine.
Yes, there is a beefed-up police presence. Les flics could be seen on many street corners, wearing armored vests. There were, perhaps, a few more sirens than normal. But nothing that would make a New Yorker blink.
After the interior minister admitted in October that the police had “lost control” of the protests, the French government is simply not sitting still for any more trouble.
With the street protests contained, that pushes the economic issue—the protesters want more spending and fewer cuts, which the bond market is unlikely to tolerate—into next April’s elections. Neither of the two most popular candidates, Marine Le Pen on the right and Jean-Luc Mélenchon on the left, has produced spending plans that the market takes seriously.
France is thus playing a game of chicken with the European Central Bank. If it fails to get its fiscal house in order, a debt crisis will emerge. At that point, the ECB has two choices: a) Buy French bonds in a bailout, devaluing the euro, and importing inflation throughout Europe. b) Do what the ECB did to Greece in 2015, when it forced Athens to accept austerity measures in return for a bailout. That program reduced Greek GDP by 25% over the following years. Unemployment hit 28%.
In both cases, the cure is worse than France’s current sickness. The protesters and their politicians might want to heal themselves before Frankfurt steps in.
CHART OF THE DAY
Young people are increasingly unlikely to be part of a couple
One reason we are having fewer babies is that we’re forming fewer couples, according to this chart from AllianceBernstein’s Inigo Fraser Jenkins (based on data from the FT).
It’s not clear why we’re coupling up less, although Fraser Jenkins notes that the timing is coincident with the launch of smartphones.
“The timing would seem to fit even if the evidence is merely circumstantial,” he said in a recent note. “Overall, this decline in coupling is especially strong for those without a degree.”
THE FRONT PAGES TODAY
US has no immediate plan to strike Iran, Trump says – FT
Novo shares jump 6% as Wegovy pill sales impress, drugmaker hikes outlook – CNBC
Trump says GOP lost because he wasn’t on ballot, is “willing to accept” results – Axios
Trump Says U.S. Plans to Cut Off Military Aid to Israel by End of Year – WSJ
Google to Spend $15 Billion in Malaysia Data Center Expansion – Bloomberg
On Cusp of Renewed War, More Iranians Are Calling for Nuclear Weapons – NYT
‘Important pieces’ of doomed Learjet separated before crash that killed 9: officials – NY Post
ONE MORE THING
Video prank intended to humiliate a pizza worker has made a pariah out of the online creator who filmed it
A video of a prankster faking a theft from a Red Baron Pizza worker as he stocked a grocery store freezer has made the prankster an online pariah. It has also turned the worker, a Michigan father of four identified only as Walt Z., into the beneficiary of a GoFundMe campaign that had raised $761,514.
The video shows the cameraman asking Walt for the time. When Walt pulls out his phone, the prankster holds up his own device, plays a sound mimicking an Apple Pay transaction, and claims he just took $10.
“It’s not a joke to me,” Walt says. “I don’t have time for this crap in my life. My life is hard enough as it is.” He explains that his kids went to bed without him, that he was supposed to be home an hour earlier, and that he has to be up at 5 a.m. to get to 10 more stores.
The video angered so many people who saw it that donations began pouring in to a GoFundMe to support Walt. Red Baron stood behind Walt, too. “He’s got a fan club. Including us,” the company said in a social media post, saying that employee-of-the-month nominations were closed. “You know why.”
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: fortune.com
