A flat start Bell20 is expected ahead of the US elections

(ABM FN) The Brussels stock market is expected to have a more or less neutral start on Tuesday. Investors await today’s US midterm election results.

On Monday, the Bel20 had a positive start to the trading week, up 0.4 percent at 3,616 points. On Wall Street, the benchmark S&P 500 closed Monday evening 1.0 percent in the green after a hesitant start.

In midterm elections, scheduled between presidential elections, Americans elect a new House of Representatives and a new Senate, which together make up Congress. Democrats still hold majorities in both chambers and gains for Republicans could undermine President Joe Biden’s influence. The general belief among investors is that a Republican victory would be good for financial markets.

“Investors are counting on Republicans to take back the House of Representatives,” RBC Capital Markets analyst Lori Galvacina told CNBC. According to Galvacina, the only real boost to stock markets is if Republicans also hold a majority in the Senate.

America’s purchasing power has been under pressure for more than a year and a half due to high inflation, and political analysts say this could be a deciding factor at the polls.

In 17 of the 19 midterm elections since 1946, the stock market has done better in the six months after the election than in the six months before, according to analysts at stockbroker Charles Schwab. According to analysts at Deutsche Bank, this trend is visible even for a century.

Historically, the president’s party loses elections during midterms. This often creates political gridlock in the last two years of a presidency and makes it more difficult to get effective legislation through Congress. It provides predictability and generally benefits stock markets.

Stock markets in Tokyo and Seoul are trading in the green this morning with gains of more than one percent. In China, on the other hand, investors have slowed after a sharp rally in recent trading days, fueled by rumors that strict corona measures may be eased. However, government agencies are against this.

U.S. oil futures fell to $91.32 a barrel this morning after falling nearly one percent Monday night in New York. The EUR/USD currency pair is trading flat this morning.

Meanwhile, investors are already looking ahead to the October release of US inflation, due on Thursday, which could have a major impact on the Federal Reserve’s interest rate policy and the prospects for a year-end rally. Inflation in the US was 8.2 percent on an annual basis in September.

Inflation is very high in Europe. The big difference with US inflation is mainly due to higher European energy prices and an expensive dollar, which translates into inflation for Europe but deflation for the US.

Company news

Intervest Offices & Warehouses saw net results fall in the first nine months of the year, but confirmed its dividend forecast for 2022.

It still has 70 million euros in cash at the end of the third quarter, so there are enough resources to continue until the end of 2024. Onward also announced plans to file registration applications in the US and EU within six months to commercialize ARC-EX. If all goes according to plan, these permits will be received in the second half of 2023.

Biocortis’ EGFR mutation test leads to short-term treatment for lung cancer patients Biocortis made the announcement Tuesday morning based on a new study.

Berenberg raised the price target for Solvay to 135.00 euros from 125.00 and reiterated a buy recommendation.

Wall Street closing levels

The S&P 500 ended Monday up 1.0 percent at 3,806.80, the Dow Jones gained 1.3 percent at 32,827.00 and the Nasdaq gained 0.9 percent at 10,564.52.

Source: ABM Financial News

From Beursplein 5, its authors ABM Financial News Keep a close eye on developments in the stock markets and particularly the Amsterdam Stock Exchange. The information contained in this column does not constitute professional investment advice or a recommendation to make specific investments.