With attention fixed on the US midterm elections, investors are taking a wait-and-see approach, as the outcome will have a decisive bearing on key economic and investment issues.
There is no shortage of related talking points, from Donald Trump saying that if he loses he will become “Mr Veto”, to threats of another devastating strike on Iran and initiatives on Ukraine. According to the Chameleon's behind-the-scenes report, almost everything is focused on the day after the midterms.
For now, while opinion polls give the Democrats a clear lead, futures prices in the oil markets are falling sharply. Brent stands at $109.986 and Crude Oil WTI at $100.650. Bond yields have also edged lower, with the US 10-year at 4.937% and France's equivalent at 4.972%.
At the first trading session of November, investors in Frankfurt ended October with a 2.48% gain, with the DAX at 25,818.21 points. In Paris, the CAC40 closed marginally higher, up 0.06% at 7,969.42 points, while in Athens the General Index was one of the few markets to post a correction, falling to 2,619.08 points (-4.38%).
European markets are at a turning point amid mounting social tensions. A case in point is George Papanikolaou's analysis of the great battle between generations, a situation more likely to worsen than ease. For now, there is a clear wave of outflows from French assets, with a significant share moving into German assets, as reflected in the yield of 3.381% (-1.11%) versus 4.972% (1.28%). To put the backdrop in perspective, Greece's 10-year yield stands at 4.319% and Italy's at 4.492%.
At Euronext Athens, traders and investors are starting from significantly lower price levels, with the banking index down nearly 10% at 3,023.75 points and the FTSE25 down around 5% at 6,702.29 points. The total market capitalisation of listed companies stands at €193.38bn, following a strong rebound in the final week of October, a move that came on average daily trading value of €356m.
In practice, the first three weeks of October saw a reallocation of positions among managers investing in emerging and developed markets, while the final week was a period of repositioning from lower levels. During the first five trading sessions of November, investor sentiment will be shaped mainly by the performance of international markets, particularly Wall Street.
The banking sector remains the market's leading sector, with particular interest in what Nondas Chaldoupis reports about the role of a super-regulator at the Bank of Greece, with new powers over servicers, banks and bankers. The continuation of flows into the sector will depend on the broader trend, as the EuroStoxx Banks fell 2% last week to 274.22 points. The cycle of results updates from the systemic banks will be completed on Wednesday, when the management of the National Bank of Greece announces its nine-month figures.
The rules of the game for Data Centers in Greece are changing, as George Fintikakis notes, with the energy sector remaining a secondary driver and significant swings in inflows and outflows. PPC shares stand at €23.36 (with November prices higher for green tariffs), while OTE shares are at €18.85, as the market awaits a response from Nebis's management to competition from PPC and Starlink.
Meanwhile, Motor Oil closed at €67.25 and HelleniQ Energy at €18.10, after gains of 2.83% and 1.86%, respectively, while falling oil prices are expected to trigger profit-taking.
Wednesday and Thursday are set to be of particular interest, with results due from Coca Cola HBC (4/11), TITAN and Metlen Energy & Metals (5/11), with clear buying ahead of results in CC/HBC. Finally, the new shares in Credia Bank resulting from its absorption of Europe Holdings begin trading today.