From the success of the Democrats in the mid-term elections in the US, the markets understand, first of all, their opposition to the war in Iran and their intention to put the brakes on AI. The toast to the Blue Wave is global, from Asia to Europe up to Wall Street which is heading towards its best performance since April, both stocks and bonds are being pushed upwards while the collapse in oil and natural gas prices is accentuated.
"Political friction could generate volatility - comments one analyst - but history suggests that a divided government can support government bonds, corporate credit and stocks as policy clarity improves." Traders grasp a tweet from JD Vance linking Trump's defeat to the decision to go to war with Iran and during the session, now hoping for a turning point in the direction of peace, Brent ends up losing 10% close to 93 dollars a barrel, the lowest level of the last two months; natural gas lost more than 8% to 84.26 euros per megawatt hour.
It is also not lost on markets that Trump's opponents have focused much of their election campaigns on slowing the development of AI and the mass construction of data centers. Initially on the markets there is a 'sell off' of semiconductor stocks and the one paying the price is the Tokyo Stock Exchange (-1.42%) and the entire sector in Europe, with ST leaving 5.13% on the ground, Asml 5.03 percent.
Despite this, a similar leap in indices has not been seen in the Old Continent since June. Madrid is the most effervescent (+3%) but London (+1.79%), Frankfurt (+2.22%), Paris (+1.96%) and Milan (+2.18%) also close sharply higher with the lists supported by stocks in the banking (which benefits from the drop in bond yields), luxury and renewable energy sectors, in the wake of the democratic advance, seen as a favorable signal for companies operating in clean energy. On the contrary, defense sector stocks slipped while expectations on military spending were reduced.
In Piazza Affari in particular Intesa (+5.45%) and Unicredit (+5.48%) are among the best. Black top of the Technoprobe price list which sinks (-7%) after the farewell of its technological manager; Prysmian (-6.9%), Avio (-6.04%), Eni (-1.9%), Fincantieri (-1.27%) and Leonardo (-1.03%) were also heavy. As the hours pass, investors rework their thinking, fewer investments in AI mean positive cash flows for big tech: the index of large-cap technology stocks gains 3.5%, Apple makes its exploit with a rise of 6.7%, Microsoft gains 7%, Amazon 8.3% and push all the Wall Street indices, with the Dow Jones rising by 3%, the S&P 500 by 1.8% and the Nasdaq up 1.75 percent.
On the bond front, Treasury bond yields fall along the entire curve, the yield on 10-year US Treasury bonds fell by six basis points to 4.90%, the yield on German bonds fell by six basis points to 3.27%. the yield on British bonds fell by 13 basis points to 5.13% and the Italian one by 15 to 4.31%. Among currencies, the dollar suffered its steepest decline in two months, the euro rose 0.4% to $1.1237, the British pound rose 0.4% to $1.3472 and the Japanese yen rose 0.2% to 158.30 per dollar. Bitcoin surpassed $80,000 and Ether surpassed $2,427.
