European stocks welcome the presidency of Donald Trump, who will return to the White House with a resounding and unanticipated victory in the polls. The continent’s stock markets rose by around half a point, with the British stock market leading the rise, with 1%. Increases which attenuated throughout the morning, reaching 1.5% in the case of the euro zone index. The Ibex 35, however, stands out from this photoand it’s the only clue in red on Wednesdaywith losses of 2%, with mid-session data. The reason for this decorrelation of the Spanish reference is a drop that approaches 5% of national banking entities and the great weight of this segment within the index.
“In the coming months we will see the policies proposed by Donald come to fruition, with which we will be able to draw new conclusions. For now, in the four years of his previous mandate, the difference between the Eurostoxx and the S&P 500 were 56% in favor of American companiesthe highest difference in the last 25 years”, they explain from XTB.
“Possible customs duties in the region, which could generate a 1% drop in the GDP of the common area over the next year, would be the fundamental reason for these differences. Indeed, companies in the luxury sector or automobile industry have suffered in recent years from the advantage of polls which gave Donald Trump the winner”, they add from the analysis firm.
Antonio Castelar, from iBroker, explains that, although the main European indices started the session higher (with the exception of the Ibex), the outlook for this continent is less optimistic, “since the possible reactivation of pricing policies and trade protectionism by Trump raises concerns,” explains the expert.
“Although sectors such as European defense could benefit, if they were encouraged to increase their investments in line with NATO commitments, Sectors with international exposure, such as automobiles and manufacturing, could be under pressure“, they add.
For his part, Thomas Hempell and the macro and market analysis team at Generali AM, part of Generali Investments, contribute: “Historically, stocks tend to rise after elections as uncertainty decreases. By Therefore, the near-term outlook is bullish, although high. US valuation and rising real yields could dampen the recovery. We expect positive 3- and 12-month total returns for the US and EU. driven by macroeconomic trends, central bank easing and a continued rotation out of technology.
Regarding his analysis by sector, Hempell recalls that EU exporting companies (exposed to American customs duties on automobiles, drinks, electronic equipment) fell by 13.5% over one year “and we do not see no attraction for them or for luxury companies, renewable energy/green energy/ESG. Our trade fear indicator also indicates continued risk for EU cyclicals relative to defensives. Among EU cyclicals, banks could benefit from their domestic character and positive correlation with global returns. »
From Renta 4, they break down the economic panorama presented on the basis of the political program presented by the Republicans: “Expect more inflation (higher customs tariffs, 10% in general and 60% in China, restrictions on immigration with a potential upward impact on wages), higher short-term prices. “long-term growth (tax cuts) although likely lower in the medium term (due to higher tariffs) and higher rates (fewer Fed tax cuts as the market is currently eliminating a decline of 25 basis points by 2026). A context which will boost the dollar against the euro. In fact, the greenback is already reaching summer highs.
