The downward steam reversal is confirmed in Europe: the Euro-Stoxx50 is down +2% this morning to 4,946, and is now down -1.3% to 4,790.790 (4% average differential with W-Street), despite a flurry of absolute or historic records on the 4 main US indices, following Donald Trump's grand slam - unexpected from the media's point of view.
The CAC40 is also experiencing one of those rare sessions where buying positions are radically reversed, with the CAC40 dropping from 7,570 (+2%) to 7,340 (-0.9%).

Wall Street reopened with a firework display of absolute records and impressive upside gaps the likes of which are seen only a handful of times a decade... and the US indices are holding firm for the time being.

The Dow Jones (+3.2%) reopened with a rare +1,000pt gap (unprecedented in the last decade).000Pts (unprecedented in the 21st century) and soared to 43,555, above the 43,325 of October 18, the S&P500 jumped over 130Pts (+2%) to 5,910 (vs. 5,875 on 17/10) and the Nasdaq (+2.2%) set a record at 18,860Pts vs. 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 sent it soaring by +5.4% to 2,385Pts, a score surpassed only once, 3 years ago, at the beginning of 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, giving Donald trump carte blanche to roll out his tax cuts and stimulus measures, under the protection of increased tariffs against China and even Europe.... not to mention Mexico and even Canada.

The downturn in European markets is being fuelled symmetrically by fears of an aggressive trade policy and geopolitical tensions, notably due to foreseeable changes in NATO funding, which would rely more heavily on European contributions.

Given the political news, a number of macroeconomic data have been published in Europe, to relative indifference, notably the composite PMI indices for 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, signalling the sharpest contraction in French private sector activity since last February.

The HCOB PMI composite index of overall activity in the eurozone stood at 50 in October, reflecting perfect stability in private sector activity, after showing a slight contraction at 49.6 the previous month.

The main point of concern for the markets is the spectacular rise in yields: the US 30-year is up +22.5pts to 4.675%, and the 10-year is up +21pts to 4.4860% (the worst score since June 10 or July 1).
In Europe, Bunds eased -1.8pts, our OATs deteriorated +0.8pts to 3.174%, Italian BTPs +5.5pts to 3.738%.

Note that the dollar jumped by +2% in the middle of the night, with the euro dropping to 1.0710/E as soon as Trump's victory appeared certain (he had 267 of 270 electoral votes, but Alaska would provide him with the missing 3, this state being 60% Republican, not counting other swing states swinging in Trump's favor).

The 'figure of the day' concerned oil inventories: data published by the US Energy Information Agency (EIA) showed a rise of 2.1 million barrels of crude oil in the USA to 427.7 million barrels in the week to October 28.

The agency added that stocks of distillates - including heating oil - were up by 2.9 million barrels, while gasoline inventories were up by 0.4 million barrels, again compared with the previous week.

Lastly, the EIA reports that refineries operated at 90.5% of their operating capacity during the same week, with average production of 9.7 million barrels/day.

In Paris stock news, Crédit Agricole reported a 10.9% increase in underlying net income for the third quarter of 2024, pointing in particular to growth in its savings management and insurance business.

Tuesday evening's and this morning's trading highlights also include investment company Eurazeo, chemical companies Solvay and Arkema, renewable energies producer Neoen and credit insurer Coface.






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