Turmoil in international markets, following the “blue wave” in the US midterm elections.
The apparent landslide victory of the Democrats in both chambers of Congress is prompting investors to reassess their strategy.
Market moves included pressure on technology stocks, a weaker dollar, a shift into the Swiss franc, gains for renewable energy stocks, a fall in Bitcoin below $76,000 and oil prices at $96.23 for WTI Crude Oil and $103.84 for Brent.
The Nikkei fell 4.8%, the US 10-year yield stood at 4.93%, and the VIX/CBOE slipped slightly to 20.83.
Reassessment is the key to the strategy traders will adopt first, with implications for Friday’s close. Repricing across all asset classes is under way, a process that will require two or three sessions to begin with.
The Financial Times (Edward Luce) looks at the “day after” for Trump and the Republicans following their heavy defeat; “there are no immediate plans for a new attack on Iran”, according to Trump’s statement, while the Americans said “no to war”, according to Iran’s chief negotiator. A new landscape is emerging, with the oil futures market mirroring developments. Gold stood at $4,022.87 (2.31%).
Volatility in New York futures is to be expected, with S&P 500 futures down 0.33% after last night’s 0.38% rebound to 7,568.92. It is widely expected that Anthropic’s IPO will be among Wall Street’s bets on the “day after”.
It is also widely expected that it will take a few sessions for positions to be reshuffled in shares of companies seen as benefiting from or being hurt by political developments. Today’s session is a crucial test; by this evening, the trend on Wall Street should be much clearer.
Following losses on major European stock markets, investors will try to reprice the latest developments in the US.
The DAX stood at 25,864 and the CAC 40 at 8,020. The EuroStoxx Banks index was at 276.72, down 0.41%, and the EuroStoxx Oil & Gas index at 604.21, down 0.84% — two bellwethers for the Greek stock market as well.
With buyers returning in force to banking stocks, the banking index reached an intraday high of 3,036.06, rebounding from a low of 2,955. With trading picking up in the second half of the session, the move above 3,000 was an encouraging sign for bulls. The banking index stood at 3,036.06, with 28.42 million shares changing hands, out of a total of 38.73 million.
The FTSE 25 approached 6,700, with outperformance among large caps including Jumbo, TITAN, Allwyn, Lamda Development, AEGEAN and GEK TERNA, alongside selling being absorbed in PPC, Metlen Energy & Metals and Coca-Cola HBC. Earlier, Coca-Cola HBC management announced quarterly figures, which are certain to be priced in, as are figures from other listed companies reporting today and tomorrow.