The Wall Street subway station in New York (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)
The New York Stock Exchange was down slightly on Monday shortly after the opening, the stock market closing the hatches before the US presidential election on Tuesday, while bond rates plunged after polls favorable to Kamala Harris.
Around 2:50 p.m. GMT, the Dow Jones fell by 0.34%, the Nasdaq index by 0.20%, and the broader S&P 500 index by 0.05%.
“There is a lot of news, (…) and it is understandable that the stock market is petrified”, commented, in a note, Patrick O’Hare, of Briefing.com.
In addition to the presidential vote, Wall Street is also awaiting the meeting of the American central bank (Fed), Wednesday and Thursday.
Furthermore, investors were digesting the decision of eight members of the OPEC+ alliance (Organization of the Petroleum Exporting Countries and its partners) to postpone the increase in their production, planned for early December, by one month.
The excitement came from the bond market on Monday, where rates fell sharply.
“Rates are going down because the likelihood of a Kamala Harris victory is increasing,” said Sam Stovall of CFRA.
The yield on 10-year US government bonds fell to 4.27%, compared to 4.38% at Friday’s close.
The major polling institutes still give the two main candidates neck and neck, but the gap has narrowed significantly on the betting platforms, which until now gave Donald Trump the clear winner.
In addition, many observers noted that a poll from the daily Des Moines Register gave the Democratic candidate in the lead against the former president in Iowa, a state until now considered for granted to Donald Trump.
In recent weeks, bond rates had strengthened largely because the New York market saw the Republican candidate winning.
“If he wins, the deficit will widen, which would push yields up,” describes Sam Stovall.
The United States would, in fact, be forced, in this case, to borrow more, and would probably have to offer higher rates to sell off their Treasury bonds.
“Kamala (Harris) should also increase the deficit, but certainly not as much as Trump,” says Sam Stovall, which justifies the decline in yields on Monday.
A few hours before the election, the VIX index, which measures the nervousness of speakers, rose by 4%.
“Volatility should increase” even more, predicts Sam Stovall, who recalls that in a presidential election year, its level is 50% higher in November than on the average of the other eleven months.
On the stock market, Boeing fell slightly (-0.12%) at the start of a crucial day, during which the 33,000 employees of the aircraft manufacturer who are members of the machinists’ union IAM must decide on a new project of social agreement.
The new general director, Kelly Ortberg, suggested that in the event of rejection, the group would then reconsider certain concessions.
Nvidia advanced (+1.65%), after the announcement, Friday after closing, of its next integration into the Dow Jones index, replacing its competitor Intel (-3.08%). The change will be effective Friday.
Fox Corp, the American television group controlled by the Murdoch family, was sought after (+3.47%) after reporting better than expected results, driven by political advertising in the United States.
The hotel giant Marriott (-2.65%) missed the target set by analysts, both on turnover and profit, and lowered its annual result target. The group particularly suffered from a slowdown in China.
The Yum China holding company, which controls the KFC, Pizza Hut and Taco Bell brands in China, rose (+8.71%) on the basis of results superior to market projections, in particular thanks to the acceleration of delivery to residence.
After the OPEC+ decision, ExxonMobil (+2.25%) and ConocoPhillips (+1.67%) were both in the green.
Nasdaq
