As the US elections draw near, the DAX index experiences modest gains, despite a recent dip of 0.2% to 19,111 points. Analysts highlight potential market volatility due to geopolitical tensions, while US stocks remain attractive amid expected growth and low interest rates. Asian markets, particularly in China, show significant gains. The euro appreciates slightly, and Saudi Aramco reports a profit decline but maintains dividends. Boeing’s strike resolves with a favorable contract, and DHL sees revenue growth despite lower profits.
DAX Shows Minor Gains Ahead of US Elections
As the politically pivotal US elections approach, the DAX index has managed to secure a slight uptick. However, significant price fluctuations are not anticipated initially, given the prevailing uncertainty regarding the election’s outcome.
The DAX commenced election day on a positive note, registering a modest gain. Nonetheless, it recently saw a decline of 0.2 percent, settling at 19,111 points. Prior to the US presidential election, investors exercised caution, leading to a 0.6 percent drop in the German benchmark index, which closed at 19,148 points.
According to analysts from Deutsche Bank, today is poised to shape the global economy and geopolitical landscape for the next four years. There remains considerable uncertainty surrounding both the election results and the timeframe for their finalization.
Market Reactions and Global Insights
Market experts at Helaba have highlighted the potential for heightened volatility in financial markets, particularly in light of escalating tensions in the Middle East, as noted in their daily commentary.
Despite the prevailing caution, US stocks continue to be appealing. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, indicated that regardless of the election results, US stocks are likely to benefit from favorable growth, lower interest rates, and ongoing support from advancements in Artificial Intelligence (AI).
Christian Subbe, Chief Investment Officer of HQ Trust, advises investors to adopt a more cautious stance at this time. He anticipates increased market volatility in the days to come, especially since the timeline for fully counting the election votes remains uncertain, which could extend for weeks.
Similar to his UBS counterpart, Subbe remains optimistic, noting that historically, the year following a presidential election has yielded above-average returns for stock and bond investors. He expects this trend to continue.
In contrast, significant gains were observed in major Asian markets, particularly in China where favorable economic indicators boosted investor sentiment. The CSI 300 index surged by 2.5 percent to 4,044 points, while the Hang Seng index rose by 1.9 percent to 20,951 points. Japan’s Nikkei 225 also saw an uptick, climbing 1.1 percent to 38,474 points, with a weaker yen benefiting the export-driven economy.
The euro experienced a slight appreciation on the day of the US elections, although substantial movements in the foreign exchange market are not anticipated. Market activity is expected to be muted, as economic data takes a backseat to the election proceedings.
Amidst fluctuations in the market, Saudi Aramco, the world’s leading oil producer, reported a decline in net profits by over 15 percent due to lower crude prices. However, the company plans to distribute $31.1 billion in dividends, emphasizing its commitment to shareholders even in challenging times.
After over seven weeks of negotiations, the strike at Boeing has concluded, with employees voting in favor of a new contract that includes a 38 percent wage increase over four years and a $12,000 bonus.
In the logistics sector, DHL reported a revenue increase of 6.2 percent to €20.6 billion in the third quarter, although profit saw a decline compared to the previous year. Meanwhile, Fresenius Medical Care (FMC) surprised investors with a 43 percent increase in operating profit, demonstrating the success of its corporate restructuring efforts.
Lastly, shareholders of Salzgitter are anticipating a takeover proposal from GP Günter Papenburg AG and TSR Recycling GmbH & Co. KG, which would require a minimum of 45 percent shareholder approval.