Global stock markets showed little direction on Wednesday as investors navigated the ongoing corporate earnings season and rising uncertainty surrounding the U.S. presidential election.
In Europe, as of 7:30 AM GMT, stock indices were relatively stable, with Paris (−0.02%), Milan (+0.07%), and Frankfurt (+0.04%).
Meanwhile, Asian markets diverged: Tokyo closed down (−0.55%), while Shanghai (+0.52%) and Hong Kong (+1.28%) surged in late trading.
On Wall Street on Tuesday, indices ended the day mixed, with the Dow Jones (−0.02%) and the S&P 500 (−0.05%) declining, while the Nasdaq gained (+0.18%).
This week is crucial for investors, with a series of third-quarter earnings reports expected. In the U.S., the technology sector is in the spotlight today, with results anticipated from IBM and Tesla, along with Boeing's earnings.
In Europe, Thales and Air Liquide are set to release their results in France, followed by Kering later in the evening.
In Germany and the UK, the banking sector will take center stage with reports from Deutsche Bank and Lloyds.
Another key factor influencing the markets is the upcoming U.S. presidential election on November 5.
Christopher Dembik, an investment advisor at Pictet AM, noted, “The market is starting to get into American time and is betting on a strong chance of victory for Trump.”
This expectation has driven up U.S. bond yields, with the ten-year Treasury yield reaching 4.22% at around 7:30 AM GMT, up from 4.08% at the close on Friday.
Investors are concerned that the Republican candidate’s policies, which include potential tariffs and immigration restrictions, could lead to a resurgence of inflation in the world’s largest economy.
Such developments may jeopardize the Federal Reserve’s prospects for future rate cuts, which the markets had welcomed after the central bank embarked on a monetary easing policy in September.
“More and more economists are beginning to doubt that the Fed will cut rates,” summarized John Plassard, an investment specialist at Mirabaud. As a result, the dollar gained value, trading up (+0.14%) at 1.0785 euros around 7:20 AM GMT.
Wednesday's release of the “Beige Book,” a monthly economic report from the Fed’s regional offices, will be closely monitored.
In a notable market development, Tokyo's main subway operator made a spectacular debut on the stock exchange, with shares soaring nearly (+45%) by the close, fueled by strong demand from individual investors for Japan's largest IPO in six years.
In Germany, Deutsche Bank fell (−4.87%) after profit-taking, despite reporting a better-than-expected third-quarter net profit of €1.46 billion, a (+42%) increase year-on-year, amid a rise in risk-related costs and the announcement of a new share buyback program.
The French luxury goods giant Kering also experienced a decline, losing (−3.57%) around 7:20 AM GMT after reporting a modest (+2.8%) rise in third-quarter sales to €10.28 billion, which fell short of analysts’ expectations due to a more challenging market environment in China.
Oil Prices Decline
Oil prices retreated on Wednesday amid concerns about global growth following a cautious report from the International Monetary Fund (IMF). As of around 7:20 AM GMT, Brent North Sea crude for December delivery was down (−0.51%) at $75.65 per barrel, while U.S. West Texas Intermediate (WTI) fell (−0.55%) to $71.34 per barrel.
Gold continued its upward trend, rising (+0.14%) to $2,752.90 an ounce, benefiting from the uncertainty surrounding the U.S. presidential election. Meanwhile, Bitcoin dipped (−0.84%) to $66,926.
(With AFP)
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