Market Report:
🚀 Trump wins the US election and the dollar rises like a rocket. The dollar index is currently above 105 points. Predictable for those who follow our reports, as we warned that a strengthening of the dollar could be one of the consequences of Trump’s victory, considering that, among his electoral promises, is to turn this currency back into the world currency, forcing its use in international trade through sanctions.
📉 Not only that, yesterday we also commented that there was a bearish pattern in gold, and posted on our social networks that one of the reasons could be a Trump victory and a strengthening of the dollar. The predictions have been quite accurate. Gold has lost what appears to be support at $2750 per oz, falling to near $2700 and now bouncing higher towards $2730. It remains to be determined if this is the end of the declines or a pullback to continue the downtrend, cooling gold.
📊 European stock markets do not seem so happy. There are some upward movements on the Dax 40, but nothing compared to the break of the highs of the SP500 futures, which have now reached 5940 points. They undoubtedly reflect the bleak future ahead for Europe.
⚖️ Trade pressures under a Trump administration will be greater against the European Union. Moreover, Germany has ruined much of its industrial projects on the instructions of the previous Biden administration, and all indications are that it will now be left to its own devices.
📈 Fortunately, the macroeconomic data coming out of Europe today is positive. Services PMIs are improving. Only France’s services PMIs are below 50, in economic contraction, but above expectations, coming in at 49.2 versus 48.3 expected, but below the previous period’s level of 49.6. German factory orders also improved, expected by 1.6% and came in at 4.2%, recovering from the previous period’s -5.4% decline.
🇯🇵 Japan has also reported better than expected services PMIs; however, they are still below 50, indicating economic contraction in services.
🛢️ Today we still have to wait for the US crude oil inventory data. For the moment, crude oil prices are stable, with Brent crude oil trading around $74.50 and WTI crude oil around $71.00.
🌍 Tomorrow we will have data on China’s trade balance, giving a clue about the evolution of its economy. In addition, the UK BoE and the US Fed will decide on interest rates respectively.
Geopolitics:
📰 Again today, as in 2016, the mainstream media begins the Trump-Russia smear narrative. MSNBC host Rachel Maddow predicted American allies would stop sharing intelligence due to America “switching sides” to favor Russia early Wednesday morning shortly before former President Donald Trump clinched the presidency.
🏦 Several major European financial firms have cut ties or reduced their exposure to Israeli companies due to pressure from activists and governments over the Gaza conflict. UniCredit, an Italian bank, has placed Israel on a “forbidden” list, while Norwegian asset manager Storebrand and French insurer AXA have sold shares in some Israeli firms, citing legal and human rights risks. Norway’s sovereign wealth fund may also divest from companies involved in Israel’s activities in the occupied Palestinian territories. Investment in Israel has decreased, with foreign direct investment falling 29% in 2023, driven by concerns over the conflict’s impact.
⚠️ Senator Bill Hagerty has written to all federal agencies, warning them of the legal requirements for the transfer of power during a presidential transition period. Hagerty stressed that compliance with these legal obligations must be a priority for the outgoing administration, given the criminal and administrative consequences of non-compliance. The letter indicates concerns about a potential clash between the Biden administration and a future Trump transition team, similar to the 2016 transition period.
