Traders work on the floor of the New York Stock Exchange
Wall Street is expected to rise sharply at the opening on Wednesday while the European stock markets advance at mid-session, the victory of the Republican candidate in the American election, Donald Trump, implying profound economic changes with global repercussions.
New York index futures suggest Wall Street opening in the green, with the Dow Jones up 3.02%, while the Standard & Poor's 500 is up 2.23% and the Nasdaq is up 1 .8%.
In Paris, the CAC 40 rose 0.21% to 7,422.83 points around 1:49 p.m. GMT. The Dax in Frankfurt strengthened by 0.03%, while the FTSE in London increased by 0.62%.
The pan-European FTSEurofirst 300 index gained 0.57%, the EuroStoxx 50 fell by 0.41% and the Stoxx 600 increased by 0.19%.
Donald Trump won the US presidential election over incumbent Democratic Vice President Kamala Harris, while the Republican Party appears on track to secure a majority in the House of Representatives, as well as the Senate.
Among the significant economic measures promised by Donald Trump, the corporate tax rate would be lowered, budgetary support strengthened and new customs barriers put in place.
This program would support American growth and inflation, and weigh on economies exposed to trade.
American stocks therefore welcome Donald Trump's victory.
In the euro zone, the fall in bond yields, linked to fears of an economic slowdown triggered by a trade war, is supporting risky assets.
“The recent dynamics of different assets (coincidental rise in US stocks, the dollar and rates, coupled with a lag in rest of the world stocks) suggests that investors had already priced in the high probability of a Republican victory in Congress,” explain the strategists at Oddo BHF.
“Price adjustments will occur in the coming hours (…) The long-term impact on the different asset classes is purely theoretical, because the timing and sequence of political measures will be decisive for the trajectory of assets”.
Furthermore, the Fed will announce its next decision on rates on Thursday and observers will be attentive to the posture of the central bank, which could be more cautious.
The latest indicators were better than expected, demonstrating the strength of the American economy despite rate increases. In the medium term, Donald Trump's economic policies could force the central bank to maintain a restrictive monetary policy to limit inflation risks.
RATE
U.S. yields are soaring to their highest since July as Donald Trump's agenda involves a higher budget deficit, as well as higher growth and inflation that would force the Fed to keep rates high.
The yield on the ten-year Treasury increased by 14.9 bps to 4.4374%, while the yield on the two-year security increased by 5.9 bps to 4.2617%.
The German ten-year yield fell by 2.5 bp to 2.406%, that of the two-year rate lost 9.3 bp to 2.209%.
VALUES TO FOLLOW AT WALL STREET
Tesla soars ahead of opening, with group leader Elon Musk having been a major backer of Donald Trump this year.
VALUES IN EUROPE
Crédit Agricole reported on Wednesday a less significant drop than expected in its net profit for the third quarter and fell by 4.8%.
European automakers exposed to China are retreating amid fears of a possible trade war, triggered by Donald Trump. The European automobile sector index on the Stoxx 600 lost 2.56%, Porsche AG fell by 5.81%, Volkswagen by 4.52%, Mercedes by 6.1% and BMW by 6.36%.
Solvay fell by 5.1%, the group having warned that it expected “stability” in demand for its products.
Siemens Healthineers on Wednesday announced full-year revenue and adjusted earnings before interest and taxes in line with expectations and up 6.9%.
Securitas, a specialist in security services, reported an increase in its net profit in the third quarter on Wednesday, jumping 10.5%.
CHANGES
The dollar is up sharply and has returned to its highest level since July, with Donald Trump's victory being considered favorable to the greenback.
The dollar gained 1.79% against a basket of reference currencies, the euro fell 2.07% to 1.0704 dollars, and the pound sterling lost 1.4% to 1.2859 dollars.
OIL
Oil is sinking under the pressure of the dollar and the victory of Donald Trump, the Republican candidate favoring an increase in the production of fossil fuels.
Brent fell by 2.56% to $73.6 per barrel, American light crude (West Texas Intermediate, WTI) weakened by 2.78% to $69.99.
(Written by Corentin Chappron, edited by Kate Entringer)
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