The chart of the German DAX index is pictured on the Frankfurt Stock Exchange
by Claude Chendjou
PARIS (Reuters) – Major European equity markets closed higher on Tuesday and Wall Street also moved into the green of the late New York morning with Americans called to the polls for the mid-term elections that will decide the majority in Congress for the next two years.
After a hesitant start to trading, equities extended their late-session gains in Europe as investors wagered on a Republican victory in at least one of the two chambers of Congress – an outcome that is likely to revive financial markets.
“The market sees the Republican victory as good for business at this point,” said Christopher Grisanti, equity strategist at MAI Capital Management. According to him, in the event of control of one of the two chambers, Republicans could remove the regulatory threat of several sectors, including new technologies, energy and or even health.
Other analysts believe Republicans could curb inflation by blocking the Biden administration’s spending plans.
At the close in Europe, the Dow Jones advanced by 1.57%, the Standard & Poor’s 500 by 1.22% and the Nasdaq by 1.47%.
In Paris, the CAC 40 closed 0.39% higher at 6,441.5 points. Britain’s Footsie gained 0.08% and Germany’s Dax 1.15%.
The EuroStoxx 50 index advanced by 0.82%, the FTSEurofirst 300 by 0.73% and the Stoxx 600 by 0.78%.
VALUES IN EUROPE
Among the main sectors of the European rating, risk appetite mainly favored the technology sector (+ 3.34%). At individual values, Carrefour loses 1.75%, against the current of the distribution sector which is up by 2.11%. The new 2026 strategic plan presented by the group, which envisages greater investments and lower costs, has left analysts unsatisfied.
Renault, which also unveiled its strategic plan to increase its operating margin by 2025, lost 3.3%, having been disappointed by the lack of details on discussions with its partner Nissan.
UBS fell 0.4% after the raids in Germany as part of a money laundering investigation.
Energy groups Uniper (-5.03%), Engie (-0.54%) fell as the European Commission excluded gas price caps on Tuesday, sources say.
British property developer Persimmon fell 5.21% after a 2023 profit margin warning.
On the upside, Danish jeweler Pandora jumped 10.64% thanks to results that exceeded expectations.
A WALL STREET
The major Wall Street indices are heading for a third consecutive hike in a session marked by US elections and a bout of corporate results.
The Dupont De Nemours industrial materials group jumped 8.43% thanks to a quarterly profit above expectations.
Tripadvisor (-16.30%) is instead sanctioned for its results, while Take-Two Interactive Software (-9.75%) and Lyft (-20.99%) are neglected for their prospects.
Excluding financial publications, Amgen takes 6.51% after positive data on its treatment against cholesterol and obesity.
Tesla, which announced on Tuesday the recall of more than 40,000 Model S and Model Xs produced between 2017 and 2021, fell 1.44% after hitting an 18-month low in session at $ 186.75.
Nvidia, up by 3.54%, supports the new technology sector (+ 1.92%), BofA Global Research stating that it expects a rebound in the price of the semiconductor manufacturer after the publication of its results on November 26 .
THE INDICATORS OF THE DAY
Eurozone retail sales rose in line with expectations in September month over month and contracted less than expected year over year as August data was revised sharply upwards, according to statistics released Tuesday shown by Eurostat. .
Wage employment in the private sector in France rose 0.4% in the third quarter, according to provisional data released Tuesday by INSEE.
The dollar weakens (-0.66%) against other currencies, with some analysts believing that a Republican victory in the US mid-term election would be good for bonds and bad for the greenback if stimulus stop the budget.
The euro took the opportunity to rise above par with the US currency at $ 1.0086 (+ 0.67%).
Bond yields are volatile ahead of the election results and inflation data forecast in the US on Thursday. Markets are pricing in the likelihood of a 50bp rate hike in the US to 67% versus 33% for a 75bp hike.
In the euro zone, two members of the Governing Council of the European Central Bank (ECB) said the bank will continue to raise interest rates even if the bloc’s economy fails.
Ten-year and two-year US Treasury bond yields fell to 4.14% and 4.67% respectively after rising to 4.24% and 4.74%.
Those of the ten-year and two-year German Bund closed respectively at 2.27% (-5 basis points) and at 2.20% (almost stable), the latter having reached the peak of the session since December 2008 at 2.25%.
Oil prices are mainly affected by fears of a decline in Chinese demand in the context of the continuation of the “zero COVID-19” policy.
Brent was down 0.69% to $ 97.24 a barrel and US light crude (West Texas Intermediate, WTI) 1.01% to $ 90.86 a barrel.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)