Donald Trump’s victory In the US presidential elections, it boosted the dollar and raised the profitability of US debt, but it weighed on the price of gold and sowed doubts in the European stock markets, which closed with generalized losses despite the bullish opening on Wall Street.
(Read: Historic triumph: Donald Trump will once again be president of the United States).
In this context, the Open Market Committee (FOMC) of the US Federal Reserve (Fed) began its two-day meeting this Wednesday to analyze their next steps in monetary policy.
The Madrid Stock Exchange was the most penalized of the session among the large European stock markets, as it fell 2.9%. Milan lost 1.54%; Frankfurt, 1.13%; Paris, 0.51% and London, 0.07%. The Euro Stoxx 50 index, where Europe’s largest capitalization companies are listed, fell 1.43%.
(See: Bitcoin breaks a new record after Trump’s victory and exceeds $75,000).
The European stock markets opened positively, except for Madrid, but finally opted for a negative tone, despite the bullish opening on Wall Street.
The main Asian indices closed the day with a mixed trend when Trump’s victory had not yet been confirmed, although it was already expected. Tokyo advanced 2.61%, while Hong Kong lost 2.23%; Seoul, 0.52%; and Shanghai, 0.09%.
Wall Street welcomed the election result with notable gains. At the close of the European stock markets, their main indices maintained this trend and were heading towards new all-time highs.
At one in the afternoon (New York local time), the Dow Jones rose 3.30%, to 43,661 points; the selective S&P 500 grew by 2.20%, to 5,910 units; and the Nasdaq advanced 2.51%, up to 18,902 points.
(Besides: Trump surpasses the threshold of 270 electoral votes and will be re-elected US president.).
Donald Trump was re-elected US president.
EFE
All three indicators now stand at historic scoring records. Link Securities considers that the falls in European stock markets respond to concerns about “the impact that a potential trade war between the Eurozone and the US could have on the results of many European companies with high exposure to the US market.”
In Europe, the main stock exchanges, with the exception of Madrid, are driven by the euphoria that American futures advance, although they register moderate gains. Meanwhile, the price of Brent crude oil, the reference price in the Old Continent, which It has dropped more than 2% this morning1.68% is left at this time, up to $74.26.
Experts assure that the price of crude oil falls due to the rebound in the dollar, and given the possibility that the Republican will increase the production of fossil energy such as oil and gas, which can cause its price to fall.
(Here: ‘American Dream’: Bernie Moreno, the Colombian who won a seat in the US Senate).
Janus Henderson experts highlight the strength that stock markets outside the US are showing today, as European and Japanese equities perform “good”while the Chinese stock markets have recorded smaller losses than expected, “despite Trump’s threats to global trade”.
Finally, abrdn’s deputy chief economist, Luke Bartholomew, has highlighted that after knowing the results of the elections in the US. “quite soon”, The implied volatility expected in the market for the coming days has plummeted.
Vontobe Chief Investment Strategist Stefan Eppenberger predicts that the Trump presidency will stimulate growth through expansionary fiscal policy and deregulation, “which can favor stock markets over bonds.” However, he warns that excessive growth leads to “risks”as it can lead to higher interest rates, which could “end up weighing on the economy and the stock markets.”
The manager Generali AM considers that Donald Trump’s victory should be worrying “especially” to China, as there is likely to be “a sharp increase in US tariffs.” In the foreign exchange market, the revaluation of the dollar stands out. At the close of the European stock markets, the US currency rose 1.9% against the euro and it was exchanged at 0.9321 euros, the highest level since the beginning of July.
The markets “they are decisively betting on the dollar against almost all the world’s currencies,” fintech analysts Ebury emphasize. Within the cryptocurrency market, bitcoin, the most widespread cryptocurrency, has skyrocketed after Trump’s victory and has marked a new all-time high, exceeding $75,371.
(Read more: Price of the dollar in Colombia rose this Wednesday after Donald Trump’s victory)
Wall Street
(Read more: What you should know about Mercado Pago in Colombia and how it works)
At the closing of the stock markets in Europe, The crypto asset rose more than 7% and stood at $74,245. The director of Institutional Training at Bit2me, Javier Pastor, considers that bitcoin reacted in a “very positive” to the outcome of the US elections, driven by “expectations of a more lax regulatory framework with Trump in the White House.”
US debt yields have also risen sharply. The ten-year bond yield has added 19.8 basis points and has stood at 4.465%. According to experts at DWS, the manager of Deutsche Bank, Trump’s presidency brings perspective “of a further rise in yields, especially for long-term bonds.”
Gold has been one of the most punished assets after the result of the US elections. The price of the gold metal fell 2.73% at the closing time of the European markets and was around $2,669 per ounce as the uncertainty surrounding the US elections dissipated.
Brent oil, the benchmark in Europe, which has fallen by more than 2% during the day, moderated the declines at the close of the European markets to 0.2%. The barrel was paid for 75.4 dollars.
Banca March considers that Trump’s victory “penalizes” to oil, as the strengthening of the US dollar means that “the barrel becomes more expensive for the rest of the world”. Manager Lombard Odier warns that if Trump increases oil production in the US, supply could come under pressure and cause crude oil prices to “fall below $70 a barrel” within a year.
Another relevant event this week is the meeting of the Federal Reserve (Fed), which takes place between today and tomorrow. The market is pricing in a drop in interest rates of 25 basis points.
(Read more: How much would the SGR budget be if the project is approved in Congress?)
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