LGT Navigator

Markets weigh Democratic election gains

The prospect of Democrats controlling Congress put potential obstacles to President Donald Trump’s policy plans in focus on Wednesday. Wall Street finished Tuesday’s session mixed despite a recovery in chip stocks, while European equities closed lower. Asian markets showed no clear direction on Wednesday, with Japanese shares under pressure amid uncertainty over technology regulation and AI investment. Demand for US government bonds pushed Treasury yields lower, while the dollar also weakened.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

© Shutterstock

Democrats gain US Senate majority, lead House

Democrats had secured 53 US Senate seats against Republicans’ 41 in early counting on Wednesday, according to Associated Press figures. They also appeared to have a majority in the House of Representatives race with 220 seats, compared with 126 for Republicans. A Democratic-controlled Congress could constrain US President Trump’s legislative agenda and increase scrutiny of his administration, following voter dissatisfaction over inflation, fuel costs and the war with Iran. The US ten-year Treasury yield was trading lower at 4.9% as investors sought safety in government bonds amid the midterm election results. The two-year yield fell to 4.6%, while the 30-year yield eased to 5.3%. The US Dollar Index declined 0.4% to 101.51 points.

US technology shares recover as chips rebound

The Nasdaq 100 gained 0.7% to 28,180.26 points on Tuesday, ending three consecutive sessions of sharp declines as semiconductor stocks recovered. The S&P 500 rose 0.4% to 7568.92 points, while the Dow Jones Industrial Average fell 0.4% to 51,786.72 points, with investors remaining cautious as Americans voted in the midterm elections. Chipmaker Nvidia advanced 2.3%, whereas iPhone maker Apple and data analytics company Palantir declined 2.2% and 1.7%, respectively, following disappointing quarterly outlooks. In macroeconomic data, US job vacancies increased by 333,000 to 7.52 million in September, exceeding market expectations, according to Bureau of Labor Statistics data released on Tuesday.

Asian stocks mixed as investors digest US election results

Japan’s Nikkei 225 fell 1.4% on Wednesday as Democratic gains in the US midterm elections fuelled concerns about tighter technology regulation and artificial intelligence spending, while Korea’s Kospi rose 0.6%. Semiconductor companies Samsung Electronics and SK Hynix lost 1.3% and 0.4%, respectively, adding to recent pressure from high valuations and uncertain investment returns. Australia’s S&P/ASX 200 fell 0.6% and mainland China’s CSI 300 rose 2.4%, while India’s Nifty 50 declined 0.2%.

Swiss consumer prices rise

Swiss consumer prices rose by 0.2% month-on-month in October and were 1.5% higher than a year earlier, according to figures released by the Federal Statistical Office on Tuesday. Higher heating oil, petrol and diesel prices drove the increase, alongside more expensive footwear and hospital outpatient services. Lower charges at doctors’ practices, cheaper overseas package holidays and falling hotel prices partially offset these increases. Core inflation, which excludes fresh and seasonal products, energy and fuels, stood at 0.5% year-on-year, with underlying prices unchanged from September. On Tuesday, the Swiss Market Index fell 0.4%, while the Euro Stoxx 50 declined 0.6%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Ahold Delhaize, BMW, CVS Health, Fresenius, Heidelberg Materials, McDonald's, Mitsubishi, Novo Nordisk, Qualcomm, and Uber.

Economic data in focus: Services Purchasing Managers’ Indices from some of the world’s largest economies, including Italy (09:45), France (09:50), Germany (09:55), the euro area (10:00), the UK (10:30), Canada (15:30) and the US (S&P Global, 15:45; Institute for Supply Management, 16:00); euro-area Consumer Price Index (11:00), US ADP National Employment Report (14:15), US trade balance (14:30), Canadian trade balance (14:30).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.