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The CAC 40, in meager volumes, nibbled 0.48% to 7,407 points on Tuesday, eyes nervously fixed on the American presidential election on Tuesday, November 5, election day.
At the time of writing, the name of the next tenant of the White House is not yet known. The complete and final results may not be confirmed for several days, in the event of a close election or in the event of numerous appeals. Key states such as Pennsylvania and Wisconsin, which have often played a decisive role, could see their recounts take longer and be subject to challenges. Donald Trump is, however, in the lead at this stage of the count, in terms of the number of electors (246). You must collect at least 270 to win.
One thing is certain, however: the Republicans regain the majority in the Senate. Remember that during this election, the House of Representatives will be entirely renewed, as will a third of the Senators. In parallel with these elections, positions of Governors will be up for grabs, and referendums will be organized locally. Some very targeted, such as the authorization of lynx hunting, others on substantive societal issues, such as the right to abortion…
To consult the results of the presidential election, state by state, live, this map is at your disposal.
Axel Botte, market strategy director at OStrum AM, summarizes, through the prism of potential impacts on the financial markets, the programs of the two candidates.
When it comes to tax policy, Donald Trump wants to lower corporate taxes, while Kamala Harris would comply with the global agreement on corporate taxation. Harris has made proposals to reduce health care costs, while Trump’s health care plans are scant in detail. On issues of climate change and energy policy, the gap is even more marked. Trade policy could be the most disruptive. Donald Trump plans to use tariffs as a threat, while Kamala Harris will continue Biden’s more targeted strategy on Chinese high-end technology. Regarding NATO and Ukraine, Trump has displayed inconsistent positions. Kamala Harris, for her part, will support Ukraine and preserve relations with allies.
In terms of statistics yesterday, there was little to get your teeth into. Let us still mention the ISM services index, which came out well beyond the target, at 56 points.
On the values ​​side, Bouygues finished at the top of the CAC 40 (+3.1%) after publishing quarterly results above expectations. Carrefour gained 0.4% following information from Bloomberg which reported that the distribution group would study various options to increase its value including a sale of its entire capital. Carrefour has not commented on this information and it appears that a takeover of the distributor would be unlikely. Excluding the flagship index, Air France-KLM lost 1.7%, penalized by a lowering of Morgan Stanley’s recommendation to “underweighting”. Solutions 30 stumbled by 8.75%, punished for having revealed a decline of more than 10% in its turnover in the third quarter.
On the other side of the Atlantic, green dominated for this election day. On Tuesday, the Dow Jones – which will host NVidia – climbed 1.02% and the Nasdaq Composite rose 1.43%. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.23% to 5,782 points.
An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0770. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $70.90.
On the macroeconomic agenda this Wednesday, to follow as a priority the final services PMI data for October in the Euro Zone at 10:00 a.m., the inaugural speech by C Lagarde, in Frankfurt for the tenth anniversary of the Single Surveillance Mechanism.
Finally, note that the East Coast of the United States having in turn entered winter time, the opening of Wall will be again, and as usual, at 3:30 p.m.
KEY GRAPHIC ELEMENTS
The 7,465/7500 points gave way on Wednesday 30/10, on gap, in thick volumes, and in conditions of notable volatility. The short-term bearish message is thus mechanically validated. The next identifiable level is 7,340 points.
Note that Friday’s session will have “saved” the appearance of the weekly candle, but that the new floor of 7,340 points is weakened. Caution, therefore, in a market environment dominated by nervousness.
FORECAST
Considering the key graphical factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that crossing 7465.00 points would revive the buying tension. While a break of 7340.00 points would restart the selling pressure.
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