(CercleFinance.com) – The downward reversal of steam is confirmed in Europe: the Euro-Stoxx50 drops by +2% this morning towards 4,946 to sink by -1.3% towards 4,790 (4% differential on average compared to W-Street), despite a shower of absolute or historical records on the 4 main major US indices, after the grand slam – unexpected from the media's point of view – of Donald Trump.
The CAC40 is also experiencing one of those rare sessions where long positions are radically reversed, with the CAC40 going from 7,570 (+2%) to 7,340 (-0.9%).
Wall Street reopened with a fireworks display of absolute records and impressive upward gaps that we only see a handful of times per decade… and the US indices are not letting up, for the time being. moment.
The Dow Jones (+3.2%) reopened with a rare 'gap' of +1,000 points (unprecedented in the 21st century) and soared towards 43,555, beyond the 43,325 of October 18, the S&P500 jumped further by 130Pts (+2%) to 5,910 (compared to 5,875 on 10/17) and the Nasdaq (+2.2%) recorded a record at 18,860Pts against 18,775 intraday on October 30.
And the picture would not be complete without the Russell-2000, the main beneficiary of an 'America First' slogan, which makes it soar by +5.4% to 2,385 points, a score surpassed only once , 3 years ago, early November 2021.
The triumph of the Republicans is total: the popular vote resembles a tidal wave with 6 million votes in favor of the Republican Party which will take control of both houses of Congress… for at least 2 years, which leaves carte blanche to Donald Trump to roll out his fiscal measures of tax cuts and recovery measures, under the protection of increased customs duties against China, even Europe… without forgetting Mexico and even Canada.
The decline in European markets is symmetrically fueled by fears of an aggressive trade policy and geopolitical tensions, in particular due to the foreseeable changes concerning the financing of NATO which would rely more on European contributions.
Given the current political situation, several macroeconomic data have been published in Europe, with relative indifference, notably the composite PMI indices for the month of October.
The HCOB PMI composite index of overall activity in France, calculated by S&P Global, fell from 48.6 in September to 48.1 in October, signaling the sharpest contraction in French private sector activity since last February.
The HCOB composite PMI index of overall activity in the euro zone stood at 50 in October, reflecting perfect stability in private sector activity, after having reflected a slight contraction by standing at 49, 6 the previous month.
The main point of concern for the markets lies in the spectacular tension in rates: the US '30 year' soars by +22.5 points towards 4.675%, the '10 year' by +21 points towards 4.4860% (worst score since June 10 or July 1).
In Europe, Bunds eased by -1.8Pt, our OATs fell by +0.8Pt to 3.174%, Italian BTPs by +5.5Pts to 3.738%.
Note that the Dollar jumped in the middle of the night by +2%, the Euro falling towards 1.0710/E as soon as Trump's victory appeared certain (he had 267 electoral votes out of 270 but Alaska was going to him bring the 3 missing, this state being 60% Republican, without taking into account other 'swing states' tilting in favor of Trump).
The 'number of the day' concerned oil stocks: data published by the US Energy Information Administration (EIA) showed an increase of 2.1 million barrels of crude oil in the United States to 427.7 million barrels during the week of October 28.
The agency specifies that stocks of distilled products – including domestic fuel oil – increased by 2.9 million barrels while gasoline stocks increased by 0.4 million barrels, still compared to the previous week. .
Finally, the EIA specifies that refineries operated at 90.5% of their operational capacity during the same week, with an average production of 9.7 million barrels/day.
In stock news in Paris, Crédit Agricole reveals net profit share of the underlying group up 10.9% for the third quarter of 2024, notably pointing to the growth of its savings management and insurance business.
Among the points of activity on Tuesday evening or in the morning, also include those of the investment company Eurazeo, the chemists Solvay and Arkema, the renewable energy producer Neoen and the credit insurer Coface.
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