Pre-market Update: Elections Go As Expected, Markets Set to Rise

The Democrats won a majority in the House of Representatives and the Republicans retained control of the Senate.  This was the outcome that most investors expected.  Accordingly, the lack of a major surprise is spurring US stock futures higher.

The election results did not substantially weaken President Trump.  Accordingly, he can continue to pursue his aggressive trade negotiations with China.

That’s why Asian investors did not react strongly to the election results.  They still want to wait and see how trade negotiations work out.  A couple of the notable moves across Asia today:

  • Japan’s NIKKEI 500 Index rose 0.14%;
  • The Shanghai Composite Index fell 0.68%;
  • Hong Kong’s Hang Seng Index is up 0.10%;
  • South Korea’s KOSPI Index moved 0.52% lower;
  • India’s SENSEX is up 0.12%;

Across the pond, European investors reacted more enthusiastically to the midterm election outcome.  European stock markets are trading higher.  A look at some of Europe’s top indices shows:

  • London’s FTSE Index is up 1.14%;
  • The German DAX Index is trading 1.06% higher;
  • The FTSE Italia All Shares Index jumped 1.40%;
  • The French CAC 40 Index is up 1.45% at the open.

European stock markets will continue to focus on issues within their own markets such as the Brexit negotiations and the Turkish Lira Crisis.  Additionally, European investors are keeping a close eye on developments in Italy as investors have become fearful of potential anti-EU measures by the new government.

US Futures Are Trading Higher in Pre-Market Action

The election went as expected and this removes a major uncertainty hanging over markets.  The US stock market reacted by moving strongly higher in pre-market trading.   Specifically, the NASDAQ and the S&P 500 futures are up 1.31% and 0.96%, respectively.

Finally, investors will continue to take their cues from the news cycle heading.  Indeed, any new developments in the Trump legal morass or global trade disputes could see it drive markets in either direction.

See more of our analysis here.

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Al Basoglu

I am a financial services professional with over a decade of experience in various roles. I've lived and worked abroad in 5 different countries while pursuing personal and professional challenges. My interests include markets, history and different cultures. I tend to weave all of my interest into my analysis and articles.