Wall Street is heading down, with futures worsening at a time when the outcome of the US midterm elections is still unclear. From the first indications, it emerges that the Republicans, as expected, will take control of the House of Representatives.
At approximately 14.10 Italian time, the futures on the Dow Jones fall by 0.24%, the futures on the S&P 500 fall by 0.09%, those on the Nasdaq fall by 0.04%.
The outcome in the Senate is more uncertain. In any case, that predicted red wave does not seem to have materialized while former US President Donald Trump, who has already announced the arrival of “a huge announcement next Tuesday, November 15” already speaks of fraud: “The same thing that happened in 2020 with electoral fraud? ”, asked and wondered Trump, launching the message from his social platform Truth.
In addition to the US midterm elections, investors are looking at the two big news coming from the front of corporate America:
From filings filed with the SEC, it emerged in the last few hours that the new CEO and owner of Twitter has sold more Tesla stock worth at least $ 3.95 billion after completing its Twitter acquisition.
Shares sold by the number one electric car maker were 19.5 million. By 2021, Musk had sold nearly $ 22 billion worth of Tesla stock – in that year, the EV giant’s stock jumped more than 50%. This year, the new Twitter owner sold more than $ 8 billion worth of Tesla stock in April and about $ 7 billion worth of stock in August. However, the stock rose by over 1% in the premarket.
Rally instead for Meta, after the announcement of the maxi layoffs from the CEO Mark Zuckerberg.
Meta is already putting 13% of its staff at the door, or more than 11,000 employees.
Zuckerberg, in the spotlight with his metaverse anxiety, responsible, among other things, according to several strategists for the Meta stock crash (over -70% since the beginning of the year), broke the news with a letter sent to employees. The Meta stock soars by 5%.
Yesterday Wall Street, on the day of Election Day, precisely of the US midterm elections, closed the session positive, with the Dow Jones jumped by more than 333 points (+ 1.02%), the S&P 500 rose by 0.56% and the Nasdaq up by 0.49%.
“The reaction of the financial markets to an eventual Republican victory should be weak, as the outcome in the House of a Republican victory is already widely expected, and the Senate outcome would make less difference if Republicans control the House – commented Jan Hatzius of Goldman Sachs in a note – A Democratic victory in the House and Senate would probably weigh on the shares instead, as market participants could anticipate a further increase in taxes on companies ”.
Focus also on the note from Michael Wilson of Morgan Stanley Investors, one of the top strategists of the high world of global finance who deserves credit for having prophesied this year’s collapse of Wall Street.
With polls indicating that US midterm elections will usher in Republican victory in at least one of the two houses of Congress, Wilson believes such an outcome could assist a market characterized by lower Treasury yields and stock prices. higher: a combination that would ensure the continuation of the current bear market rally. (bear-market rally).
Wilson warned, however, together with the Morgan Stanley team of strategists, that, before the official results of the elections, which will be known only in the next few days, also considering the wait for the publication, on Thursday 10 November, of the data on the inflation as measured by the CPI (consumer price index), the markets should face short-term volatility.
Anxiety over the release of US inflation data is high, as traders and investors are wondering if Jerome Powell’s Fed will announce in December a tightening perhaps less than the 75 basis points that was enacted last week for the fourth consecutive time.
It is hoped for less aggressive rate hikes after the Fed raised rates by 75 basis points on November 2, bringing them to the new range of 3.75% to 4%, a record since 2008.