European Equities: U.S Presidential Election Vote Counts to Sideline Economic Data

The Majors

It was another bullish day for the European majors on Tuesday. The CAC40 and DAX30 rallied by 2.44% and by 2.55%, with the EuroStoxx600 gaining 2.34%.

There were no material stats to provide the European majors with direction. The lack of stats left the markets squarely in the hands of the U.S Presidential Election.

Market expectations of a Biden victory and a Blue Wave drove demand for riskier assets on the day.

Lockdown measures across the EU were side-lined on Tuesday, as was Brexit…

The Stats

It was a particularly quiet day on the Eurozone economic calendar.

There were no material stats to provide the European majors with direction.

From the U.S

Economic data was on the lighter side. Key stats included September factory orders. There was a muted reaction, however, as the U.S went to the polls. Factory orders rose by 1.1% in the month of September, following a 0.6% increase in August.

The Market Movers

For the DAX: It was a particularly bullish day for the auto sector on Tuesday. BMW led the way, rallying by 4.91%, with Daimler and Volkswagen rising by 4.36% and by 4.24% respectively. Continental saw a more modest 2.11% gain on the day.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank ended the day with gains of 3.44% and 3.57% respectively.

From the CAC, it was a particularly bullish day for the banks. BNP Paribas surged by 6.12%, with Credit Agricole and Soc Gen rallying by 4.35% and by 5.44% respectively.

The upside for BNP Paribas came from better than expected quarterly earnings results, which supported the broader sector.

It was a relatively bullish day for the French auto sector. Peugeot rose by 1.80%, while Renault surged by 6.77%.

Air France-KLM jumped by 6.17% following on from a 4.98% gain on Monday, with Airbus SE rallying by 5.06%.

On the VIX Index

It was a 2^nd consecutive day in the red for the VIX on Tuesday. Following on from a 2.34% decline on Monday, the VIX fell by 4.26% to end the day at 35.55.

On Tuesday, the Dow and the NASDAQ rose by 2.06% and by 1.85% respectively, with S&P500 gaining 1.78%.

Hopes of a Democratic Blue Wave delivered support to the U.S equity markets, as Biden held onto his lead on Election Day.

The promise of increased stimulus was good enough to offset any market concerns over the repeal of Trump’s tax bills.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include service sector PMIs for Italy and Spain. Finalized October Composite and Services PMIs are also due out of France, Germany, and the Eurozone.

From the U.S, the market’s preferred ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change figures for October are also in focus.

While we traditionally expect the markets to be sensitive to the numbers, don’t expect any sensitivity this time around.

The markets will be digesting the Electoral College vote counts and little else throughout the day.

The Futures

In the futures markets, at the time of writing, the Dow was up by 130 points.

For a look at all of today’s economic events, check out our economic calendar.