Stock markets: the Us elections add uncertainty

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The influence of the external background to the evening were mixed. The American S&P 500 added 0.38 percent, while the European STOXX 600 lost 0,22%. In the US the elections in the Congress for a two-year period will be fully upgraded, the House of representatives and a third of the Senate for six-year terms. Now the Republicans have a majority in both houses. In the baseline scenario (that he laid down in the current quotes of risky assets) after the election, they only control the Senate and Democrats the House of representatives.
Today Mosberg index rose almost 1.5% to 2412 points, and RTS has added 1.5% to 1151 points.
The influence of the external background to the evening were mixed. The American S&P 500 added 0.38 percent, while the European STOXX 600 lost 0,22%. In the US the elections in the Congress for a two-year period will be fully upgraded, the House of representatives and a third of the Senate for six-year terms. Now the Republicans have a majority in both houses. In the baseline scenario (that he laid down in the current quotes of risky assets) after the election, they only control the Senate and Democrats the House of representatives.
As for the other scenarios – a constitutional majority of Democrats and quite possible the impeachment of Trump, saving the majority of Republicans, they are unlikely. But, as show the results of the US presidential election, which was won by trump, do not underestimate low probability: if this happens, then the market reaction will be very rapid. In itself, the completion of the elections is positive for Russia in any case. On the eve of elections of the party actively played a “map” of anti-Russian sanctions, drastically tightening its rhetoric. The mood in the absence of new negative developments with Russia on the global stage, will gradually decline.
The index of business activity in the services sector in the Eurozone in October amounted to 53.7 points, it was expected of 53.3. In Russia the consumer price index for October was 3.5%, expected 3.6%.
All sectoral indices of the Moscow stock exchanges closed with growth in the sector “banking and Finance”. The growth of quotations of shares of state-owned Sberbank and VTB reflects the expectations of investors relative to the base scenario of the outcome of the American elections. Among individual stocks in the leaders of growth shares of En+ (+5,9%), RUSAL (+5.3%) and Rosneft (+5%). The outsiders were the papers “RusGidro” (- 1.6 million%), MMK (- 1.6 million%) and Uralkali (-1,3%).
RUSAL has appointed a new CEO and reported EBITDA growth of 24% (yoy) in dollar terms due to the deferral of U.S. sanctions.
Oil major varieties is cheaper in the range of 1.3% and a barrel of Brent is $72,2; and WTI – $62,2. The US imposed sanctions against Iran were tough, but their implementation will be very smooth. Meanwhile, the oil market in the 1st half of 2019 will enter into a phase of excess supply. These are the concerns of investors and put in quotes from the beginning of October. Now we can talk about the downside potential for Brent to $65 per barrel.
In the foreign exchange market United States dollar the evening lost 0.4 percent to 65.9 rubles, and Euro decreased by 0.3% to 75.2 RUB.
American elections added to uncertainty, but in the baseline scenario in the evening is expected to strengthen the ruble, the growth of quotations of futures on index Mosberg.
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Timur Nigmatullin,
Analyst
“Opening Broker”