PARIS (Reuters) – European stock markets ended higher on Tuesday, with investors positioning themselves for the outcome of a particularly uncertain American presidential election, against a backdrop of resistance in the United States economy to rate hikes by the Federal Reserve .
In Paris, the CAC 40 increased by 0.48% to 7,407.15 points, while the German Dax rose by 0.55% and the British Footsie declined by 0.14%.
The EuroStoxx 50 index ended the session with an increase of 0.39%, while the FTSEurofirst 300 recorded a gain of 0.05% and the Stoxx 600 gained 0.04%.
Americans who did not vote early go to the polls on Tuesday to choose between former Republican President Donald Trump and outgoing Democratic Vice President Kamala Harris.
The winner could be announced as early as November 6, but if the results turn out to be as close as the polls seem to predict, it could take several days to decide between the two candidates.
Voting intentions are so uncertain, American society so polarized, that observers are also worried about violence in the event of victory for one or the other candidate.
Investors are also hanging on the results of the vote.
Options markets suggest a possible move of 2.1% for the S&P 500 on November 6, according to calculations by Goldman Sachs, compared to 0.9% per day on average over the last three months.
Chinese stocks and the dollar (particularly against the Mexican peso) are also expected to see a spike in volatility, the bank adds.
The implications of the election on the American economy, on geopolitical balances or global activity, however, are such that all global assets could be affected by the result.
The ISM indicator of services activity in the United States also surprised on the upside, suggesting in particular that pressure on input prices remained significant, as did pressure on employment.
In an uncertain context and a few days before the Fed’s next decision on Thursday, the indicator revived concerns about overheating in the American economy, which would force the central bank to slow down its pace of rate cuts.
On both sides of the Atlantic, the quarterly results also animated discussions on Tuesday.
VALUES
Bouygues reported on Tuesday a stronger-than-expected current operating profit for the first nine months of the year and confirmed its annual outlook, which pushed the group up by 3.1%.
German machinery and auto parts maker Schaeffler announced plans on Tuesday to cut 4,700 jobs in Europe, after its third-quarter operating profit fell almost 50%, falling 7.2%.
Asos fell 7.1% after adjusting its outlook for 2025.
Adecco on Tuesday reported a 4% drop in revenue during its third quarter and collapsed 6.3%.
Vestas, the world’s largest manufacturer of wind turbines, on Tuesday published third-quarter operating profit below expectations and declined 12.2%.
Schroders on Tuesday reported capital outflows of £2.3 billion for the quarter to the end of September, falling 13.5%.
Belgian chemicals maker Syensqo announced plans on Tuesday to cut around 2% of its global workforce to support long-term growth and climbed 7.4%.
A WALL STREET
Wall Street is up sharply at mid-session and is preparing for a period of potentially higher volatility following the American election.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.75% for the Dow Jones, compared to 1% for the Standard & Poor’s 500, and 1.14% for the Nasdaq Composite. .
CHANGES
Investors consider a victory for Donald Trump a little less likely, which puts pressure on the dollar which would be supported by the Republican candidate’s economic program.
The dollar fell by 0.33% against a basket of reference currencies, the euro rose by 0.36% to $1.0916, and the pound sterling strengthened by 0.39% to $1.3007.
RATE
The ISM activity indicator for the services sector is pushing yields on the US 10-year higher as investors fear that continued high price pressures will push the Federal Reserve to keep rates high.
At closing time in Europe, the yield on the ten-year Treasury increased by 5.5 bp to 4.3636%, while the yield on the two-year security increased by 5.4 bp to 4.2304%.
The yield on the German ten-year rose 4.1 bps to 2.432%, that of the two-year rate gained 4.2 bps to 2.333%.
OIL
The barrel is increasing despite the uncertainty surrounding the American election, while OPEC decided on Monday to postpone its production increases planned for December.
Brent rose by 1.29% to $76.05 per barrel, American light crude (West Texas Intermediate, WTI) rose by 1.44% to $72.5.
TO BE CONTINUED ON WEDNESDAY:
(Written by Corentin Chappron, edited by Sophie Louet)
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