DAX: European Markets and U.S. Elections.
The German DAX index (Ticker AT: GER40) has been one of the most impacted by the uncertainty surrounding the U.S. presidential election, closing down 0.1% yesterday, Tuesday, along with the French CAC 40 and the UK's FTSE 100. At today's open, the index continued in negative territory, down -0.13% equivalent to -25.80 points. Currently, the DAX checkpoint stands at around 18,475 points, a level that could hold or even come under further pressure if Trump's re-election materializes, due to fears of protectionist tariff policies that would affect Germany's exporting economy.
Investors maintain a cautious stance, opting to wait for the election results before making important decisions, especially in sectors highly sensitive to changes in U.S. trade and fiscal policies. In addition, the election race has shown a weakened Kamala Harris in the polls, adding more volatility to market forecasts.
Monetary Policy Expectations
Monetary policy is another factor that is influencing movements in the DAX and European markets in general. The US Federal Reserve meeting scheduled for this week could culminate in a rate cut of 25 basis points, which would relieve some of the pressure on global markets. The Bank of England is also scheduled to meet this Thursday and is expected to announce a similar rate cut in an effort to contain inflation and stabilize European markets.
European Corporate Results
Amid this uncertainty, quarterly earnings from European companies have brought slight relief to the market. Approximately 50% of STOXX 600 companies have already reported third quarter results, and many reports exceeded the market's low expectations. Among the highlights:
• Hugo Boss (Ticker AT: BOSS.G): Rallied 0.7% after slightly beating earnings expectations and confirming its annual outlook, despite declines in the Asia-Pacific region.
• AB Foods (Ticker AT: ABF.UK): Shares rose 2.8% after the Primark owner reported solid annual earnings growth, driven by higher revenues in its food and retail businesses.
• ASOS (LON:ASOS): Dropped 2% after reporting significant annual losses, although its CEO, Jose Antonio Ramos Calamonte, expressed optimism about the company's recovery.
Oil Prices
Oil prices, which affect key DAX sectors such as industrials and chemicals, stabilized after a sharp rally on Monday. Brent (Ticker AT: BRENT) reached USD 75.23 per barrel and WTI (Ticker AT: LCRUDE) USD 71.63, boosted by OPEC+'s decision to delay again a 180,000 barrel per day production increase in the face of weak global demand. This is the second extension of the 2.2 million barrels per day cut, an adjustment that producing countries consider necessary to maintain oil market stability. Today, oil prices have started the European trading day upwards, +0.27% for WTI and 0.25% for Brent respectively. It is very likely that these prices will extend to 72.23 USD for WTI and 76.01 USD for BRENT.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Investors maintain a cautious stance, opting to wait for the election results before making important decisions, especially in sectors highly sensitive to changes in U.S. trade and fiscal policies. In addition, the election race has shown a weakened Kamala Harris in the polls, adding more volatility to market forecasts.
Monetary Policy Expectations
Monetary policy is another factor that is influencing movements in the DAX and European markets in general. The US Federal Reserve meeting scheduled for this week could culminate in a rate cut of 25 basis points, which would relieve some of the pressure on global markets. The Bank of England is also scheduled to meet this Thursday and is expected to announce a similar rate cut in an effort to contain inflation and stabilize European markets.
European Corporate Results
Amid this uncertainty, quarterly earnings from European companies have brought slight relief to the market. Approximately 50% of STOXX 600 companies have already reported third quarter results, and many reports exceeded the market's low expectations. Among the highlights:
• Hugo Boss (Ticker AT: BOSS.G): Rallied 0.7% after slightly beating earnings expectations and confirming its annual outlook, despite declines in the Asia-Pacific region.
• AB Foods (Ticker AT: ABF.UK): Shares rose 2.8% after the Primark owner reported solid annual earnings growth, driven by higher revenues in its food and retail businesses.
• ASOS (LON:ASOS): Dropped 2% after reporting significant annual losses, although its CEO, Jose Antonio Ramos Calamonte, expressed optimism about the company's recovery.
Oil Prices
Oil prices, which affect key DAX sectors such as industrials and chemicals, stabilized after a sharp rally on Monday. Brent (Ticker AT: BRENT) reached USD 75.23 per barrel and WTI (Ticker AT: LCRUDE) USD 71.63, boosted by OPEC+'s decision to delay again a 180,000 barrel per day production increase in the face of weak global demand. This is the second extension of the 2.2 million barrels per day cut, an adjustment that producing countries consider necessary to maintain oil market stability. Today, oil prices have started the European trading day upwards, +0.27% for WTI and 0.25% for Brent respectively. It is very likely that these prices will extend to 72.23 USD for WTI and 76.01 USD for BRENT.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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