European Shares May Struggle For Direction As US Goes To The Polls

European Shares May Struggle For Direction As US Goes To The Polls

November 14, 2022

European stocks may struggle for direction on Tuesday as the U.S. votes for midterm polls.

Today’s election will determine whether Democrats maintain control of Congress.

Against the backdrop of Donald Trump’s expected jump into the race for the White House in 2024, Trump said he would make a “very big announcement” next week on November 15.

Analysts say that a divided government in Washington is ostensibly bullish for equities.

Investors also await U.S. inflation figures due this week for fresh hints on the Federal Reserve’s rate hike path.

Thursday’s CPI report may show a modest slowdown in the annual rate of consumer price growth in October, which could add to optimism about a slowdown in the pace of rate hikes.

Asian stocks traded mixed after official data showed COVID-19 cases sharply escalated in Guangzhou and other major Chinese cities.

The dollar was on the back foot and gold traded flat while oil prices hovered below a two-month high.

U.S. stocks rose overnight to add to the strong gains posted last Friday as investors looked ahead to congressional mid-term elections on Tuesday and the release of inflation report on Thursday.

The Dow climbed 1.3 percent, the S&P 500 added 1 percent and the tech-heavy Nasdaq Composite rose 0.9 percent.

European stocks closed mostly higher on Monday, as positive German industrial production and Eurozone investor confidence data helped offset worries about China’s economy.

The pan-European STOXX Europe 600 rose 0.3 percent to reach its highest level since Sept. 13.

The German DAX gained 0.6 percent and France’s CAC 40 index finished marginally higher while the U.K.’s FTSE 100 dropped half a percent.

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