Market participants expect the European stock markets to open well on Wednesday morning. The focus is solely on the current results of the US election. It currently looks like a clear victory for Republican Donald Trump. With currently 246 electoral votes, he is not far away from the necessary 270. Kamala Harris, on the other hand, currently only has 187 votes. The Republicans have already regained the majority in the US Senate. “The markets speak a clear language: Trump is far ahead and so is the 'Trump trade',” says one market strategist. US futures are rising more sharply, Bitcoin is hitting new all-time highs and government bond yields are rising. Banks and financial service providers could benefit: “Trump stands for deregulation in the financial sector,” says one market participant. Sooner or later, this should also have an impact on Europe. Rising interest rates are also positive for the sector in the long end. “On the other hand, market participants should be wary of export-oriented stocks,” adds the market expert. Industrial companies with high production in the USA are likely to perform relatively well in the event of a Trump victory, while others are likely to suffer from the planned introduction of blanket tariffs of 10 percent.

On Tuesday, the SMI fell by 0.3 per cent to 11,866 points. Among the 20 SMI stocks, there were twelve price gainers and eight price losers. A total of 15.29 (previously: 13.12) million shares were traded. Roche presented promising data on patients with blood diseases in the USA. This left investors cold, and the share price slipped by 0.9 per cent. Swiss Re has found a buyer for the European property-casualty business of its digital insurer iptiQ. The Group is selling the business to Allianz Direct. The purchase price was not disclosed. The reinsurer's share price climbed by 1.6 per cent. The industrial goods group ABB (+2.5%) acquired the US pump motor manufacturer Aurora; no financial details were disclosed here either. Kühne + Nagel lost 1.3 per cent. According to JP Morgan, the detailed results of German logistics company DHL highlighted the ongoing weakness in express volumes. Docmorris gained 0.7 per cent following the final results of Redcare Pharmacy. Weak business figures weighed on Adecco (-5.9 per cent), with the share price reaching its lowest level in 28 years. Oerlikon (-7.7%) presented its business figures while Vontobel lowered its price target.

The European stock markets finished broadly in the green on Tuesday, a few hours ahead of a US presidential election that is shaping up to be more uncertain than ever. The Stoxx Europe 600 index gained 0.1% to 509.5 points. In Paris, the CAC 40 and SBF 120 advanced by 0.5% each. The DAX 40 advanced by 0.6% in Frankfurt, while the FTSE 100 lost 0.1% in London. Bouygues (+3.1%) was the biggest performer among the CAC 40, after publishing results for the third quarter that beat analysts' estimates, thanks to Equans and construction. Airbus (+1.1%) announced on Tuesday that it had won an order for 28 helicopters from the American company Global Medical Response (GMR), which intends to strengthen its medical intervention fleet. Retail group Carrefour (+0.4%) is considering various options, including asset disposals and acquisitions, in order to increase its stock market valuation, according to information from Bloomberg. Tyre manufacturer Michelin (+0.4%) revealed that it had announced to the 1,254 employees of its Cholet (Maine-et-Loire) and Vannes (Morbihan) plants, which have been "facing major economic difficulties for several years", its intention to cease production "by early 2026 at the latest". The UK competition authority indicated on Tuesday that the planned merger of British telecoms operators Vodafone (+0.4% in London) and Three UK could proceed if its competition concerns were addressed by network investment and customer protection measures.

“The popular Trump trades are all working,” said Danny Kirsch, head of options at Piper Sandler, on Tuesday evening. Stocks have steadily climbed this year ahead of the election, an event that often stokes stock-market fireworks. The S&P 500 has risen 21%, on track for its best performance in a presidential election year since 1936, when Franklin Roosevelt was in office. The Dow Jones Industrial Average is up 12%, its best election-year performance since 1996, when Bill Clinton was in the White House. A win for Trump would promise an unpredictable mixture of policies. Tax cuts and regulatory rollbacks could boost corporate profits, but many economists have said higher tariffs and stricter immigration enforcement under Trump could slow economic growth and lift consumer prices. On Tuesday, shares of Trump Media & Technology, known as DJT, soared. The U.S. dollar, bitcoin and shares of Tesla - bets that are also linked to Trump’s prospects - rose, too. The Dow Jones Industrial Average (DJIA) ended up 1% at 42,221.88 points, while the broader S&P 500 index gained 1.2% to 5,782.76 points. The tech-heavy Nasdaq Composite gained 1.4% to 18,439.17 points. Nvidia gained 2.8%, overtaking Apple (+0.6%) as the biggest US market capitalisation. The processor manufacturer ended the day with a market capitalisation of $3,432 billion, compared with $3,397 billion for Apple, according to Dow Jones Market Data. Boeing (-2.7%) remained under pressure as machinists on strike for seven weeks returned to work on Wednesday after approving the aircraft manufacturer's latest pay proposal. The new collective agreement gives them a 38% pay rise spread over four years. Netflix (+1.1%), the American video streaming giant, was searched on Tuesday morning in Paris and Amsterdam as part of an investigation into suspected tax fraud and concealed work, a judicial source told AFP, partially confirming a report in Marianne. Netflix's headquarters for Europe, the Middle East and Africa are in Amsterdam. Palantir Technologies (+23.5%) reported a 30% rise in third-quarter sales, ahead of expectations, driven by strong demand for artificial intelligence systems. The data analysis company also raised its outlook for the current financial year. Lattice Semiconductor (-1.4%) announced that it expected sales for the current quarter to be below analysts' forecasts. The semiconductor manufacturer reported third-quarter results broadly in line with forecasts but announced a plan to lay off 14% of its workforce in order to reduce operating costs. Electronic components manufacturer Cirrus Logic (-7.1%) said it expected lower-than-expected revenues for the current quarter. The Apple supplier is forecasting mid-range sales of $510 million, compared with the Factset consensus of $590 million.

Asian stocks were mixed on Wednesday. A looming victory for Donald Trump in the US presidential election is being widely discussed on the financial markets in East Asia. According to counts, Trump is in the lead and there are indications that he will win so-called swing states that have not yet been fully counted and are decisive for the outcome of the election. Nevertheless, it is still too early to call the race for the White House decided. In Hong Kong, the HSI slumped by 2.6 per cent, while in Shanghai, where trading is currently in the lunch break, the Composite Index is just in positive territory. The Nikkei-225 in Tokyo jumped 2.5 per cent to 39,386 points.

The U.S. Treasury yield curve seems to steepen in the Asian session on growing prospects of a Republican sweep of U.S. presidential and congressional elections. Investors also await the outcome of the the Federal Reserve’s November policy meeting later this week. The 10-year Treasury note yield fell by 2 basis points to 4.289%. The 2-year Treasury note yield rose by 2 basis points to 4.195%.

Target price Geberit: Julius Baer upgrades to CHF 550 (525) - Hold
Price target SoftwareOne: UBS lowers to CHF 12 (19) - Buy
Vontobel lifts UBS to CHF 32 (31) - Buy

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