US elections and Fed rate decision – market actors

Madrid, November 3 (EFECOM). – The US presidential election on Tuesday will feature two opposing fiscal policies that could cause uncertainty in stock markets, and whether the Federal Reserve will continue its focus next Thursday on making interest rates more flexible , will attract market interest.

Ahead of the US elections and the Federal Reserve meeting, next Wednesday and Thursday, the week in Europe will begin with the release of October manufacturing PMIs for the eurozone, Spain, Italy, France and Germany, at the same time as the French budget balance and an auction for bonds for a period of 3, 6 and 12 months.

This Monday, the 4th, will also reveal investor confidence in the eurozone for November, the Eurogroup meeting will take place and data on German, French and Spanish car registrations for October will be published.

On Tuesday the 5th, the highlight will be data on unemployment in Spain last month and industrial production in France in September, to which will be added the auction of Spanish 6- and 12-month bills, as well as 10-year debt in the UK.

On Wednesday, the 6th, it will be the turn of the publication of October purchasing managers’ indices (PMI) in the eurozone, Spain, Italy, France and Germany. In addition, Germany’s production orders for September will be announced on this day. and eurozone producer price index (PPI) for the same month.

Thursday the 7th in Europe will be marked by the publication of data on retail sales in the eurozone for September and the Bank of England meeting on interest rates, as well as the dynamics of industrial production in Germany and Spain in September and the PMI of the construction sector. Italy and Germany.

The end of the week will be marked by a report on France’s trade balance, industrial production and retail sales in Italy, as well as the EU leaders’ summit.

In the business sector, the results of Telfónica, ArcelorMittal, ACS, Sacyr, Grifols, Ryanair, Rovi, Prosegur, Naturhouse and Logista will stand out, among others.

In the US, attention this week is focused on two key issues: the presidential election on Tuesday, November 5, and the Federal Reserve’s monetary policy decision on Thursday, November 7.

On Wednesday, the 6th, the winner of the US presidential election between Donald Trump and Kamala Harris will finally be known. An election that is key to assessing the economic, monetary and geopolitical path of the coming years.

As Araceli de Frutos, advisor to the Alhaja Inversiones fund, told EFE, the election result “will bring volatility to the market in the short term,” but she recalled that investments are long-term and in which we must invest interest focused on “the fundamentals of the company.”

A day later on Thursday, attention will focus on whether the Fed continues to focus on flexibility in its monetary policy after cutting rates by 50 basis points at its last meeting.

The market, De Frutos emphasized, puts Trump’s victory at stake, which will be caused by his economic policies, which include the introduction of tariffs on imports of products from third countries, as well as tax cuts with new price increases. inflation, which will force the Fed to continue cutting interest rates.

In any case, De Frutos indicated that market expectations for the November 7 Fed meeting are 60%, at which the Fed will continue to make “weak” decisions and cut rates by 25 basis points.

As for the sectors that will benefit from a possible Trump victory, according to adviser Alhaja Inversiones, they will be the oil, financial and defense sectors, while renewable energy and healthcare will not benefit.

Before all that happens, this Monday the US will have the Conference Board Employment Trends Index for October, Factory Orders for September, Total Auto Sales for Last Month, and a 3- and 6-Month Government Debt Auction, and on Tuesday In addition to another 10-year auction will reveal the composite PMI and services sector, as well as the ISM non-manufacturing activity index.

On Wednesday, the mortgage market index will be published and an auction of 30-year government debt will take place; On Thursday, unemployment claims average 4 weeks, bulk sales, and there will be a debt auction of 4 weeks.

The US macroeconomic agenda will end with inflation expectations from the University of Michigan and oil rig counts from Baker Hughes.

On the business side, he will distinguish himself by publishing results from companies such as Fox, Moderna, Marriot International, Airbnb and Axon, among others.

In terms of business results reported so far in the US, De Frutos noted they outperformed by 75%, although double-digit growth is expected on both sides of the Atlantic by 2025.

Among the macroeconomic indicators relevant next week in the Asia-Pacific region, in China on Tuesday the publication of the Caixin service sector business activity index for October in China stands out; and trade balance on Thursday.

Meanwhile, Japan begins the week with the Culture Day holiday, and only on Wednesday the minutes of the Bank of Japan’s last meeting last Thursday, at which it was decided to keep them at 0.25%, will become known.

Also on Wednesday, the Japanese services sector PMI will be known, and on Thursday, the country’s overtime payments for September will be known, as well as an auction of 10-year debt obligations. Finally, the Reuters Tankan index for major Japanese companies for November and household spending for September will be published on Friday. EFECOM

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