Obama's Global Stock Surge

Obama fever spread to Asia this morning as stocks soared on the back of the Democratic presidential candidate's election victory, Bloomberg reports. Shares in Toyota, "which gets the biggest portion of its sales from North America," jumped 10 percent as the feel-good sentiment infused bourses across the region with the Nikkei, in particular, closing up 3.7 percent. Asia took its cue from yesterday's big Wall Street surge, where the Dow Jones saw a 3.3 percent gain and "stocks enjoyed their strongest election day rally since the New York Stock Exchange first opened for trading on presidential polling day," the Financial Times reports. The Standard & Poor’s 500-stock index closed above 1,000 for the first time since Oct. 13, gaining 4.08 percent, while the Nasdaq composite index posted gains for six day in a row. “We don’t know if it’s the end of the bear market yet, but it looks as though the bear has taken a nap,” Sam Stovall, chief investment strategist at Standard & Poor’s equity research told the New York Times. Perhaps the only dose of pessimism came from the oil trading floors, where the benchmark price of crude slid below $68 a barrel this morning in Asia as euphoria over an Obama win was tempered by the reality of the global economic slowdown, CNN Money reports.

Detroit's Big Three are wasting no time getting over the Bush years and are looking hopefully for a handout to the new Democratic Big Three in the White House, Senate, and House of Representatives, the Wall Street Journal reports. Indeed the pressure on Dems to do something quickly continues to build as some analysts estimate "that without outside help, one or more of Detroit's Big Three auto makers could be headed toward bankruptcy within a year." Who are the other corporate winners and losers amid the new political landscape? Caterpillar Inc. may benefit from renewed transportation infrastructure investment, and health insurers UnitedHealth Group Inc. and WellPoint Inc. may also come out winners, but drugmaker Pfizer could end up disappointed, writes Bloomberg. "The Democratic president-elect will create corporate winners and losers as he tries to carry out his promise to produce jobs, expand health-care coverage, and increase the use of alternative energy, all while cutting taxes," it writes. U.S. business can learn three leadership lessons from the success of the Obama campaign, former GE CEO Jack Welch writes, along with wife, Suzy, in Business Week—namely, adhering to "three leadership principles: a clear vision, clean execution, and friends in high places," by which they mean the media, apparently.

Here's one that is not all that unexpected: The early take on online shopping (like traditional retail projections a week ago) is that sales are expected to take a hit this holiday season, the WSJ reports this morning, citing the much-watched Shop.org survey of top virtual retailers. It's not all bad news, however. "More than half those surveyed by [Shop.org] anticipate ringing up at least a 15% increase from last year," the WSJ writes. In all, retailers surveyed are expecting sales for the entire year to reach $204 billion. Using a second reference—analysts at Forrester Research—USA Today writes online sales will grow at 12 percent this holiday season, its slowest pace ever recorded, but still will clock in well above the measly brick-and-mortar figure of 2.2 percent. For some retail chains, the online arm is the lone bright spot, the newspaper adds. Gap Inc.'s online sales, for example, will top $1 billion this year, accounting for 6 percent of revenues. Another soft spot in the retail sector? Luxury sales dropped 20 percent in October, the WSJ writes, citing MasterCard SpendingPulse, as free-spending overseas tourists stayed home. Factory orders also fell for a second straight month, the Associated Press writes, the steepest drop since 1992.

Swiss financial giant UBS and Britain's Royal Bank of Scotland, two of the worst-hit European banks, on Tuesday braced investors for yet more losses related to the financial crisis. "UBS, the Swiss bank that suffered one of the biggest losses from the credit turmoil, reported a profit in the third quarter compared with a loss a year earlier but warned that the outlook for the rest of the year was gloomy as customers continued to withdraw funds from its wealth management unit," according to the NYT. RBS' new chief executive, Stephen Hester, meanwhile, blamed his predecessor for fostering a “bull market culture” that led to the massive losses and subsequent $32 billion government bailout last month.

Could the re-insurance sector be the next shoe to drop? It looks that way as Swiss Re on Tuesday posted a surprise $260 million loss and is suspending a share buy-back program to retain as much capital as it can as the financial crisis deepens, Reuters reports. Swiss Re, the world's second largest re-insurer, is also warning there could be more bad news in store for the fourth quarter.

Finally, the street-level clamor to curtail annual bonuses for embattled bank executives has come home to roost at troubled UBS. The Swiss financial power, perhaps the worst-hit bank in Europe, is telling board members and top executives they have to hand back $51 million worth of bonuses this year, a condition of the state aid it received last month, the Guardian reports.