Opening higher (futures Eurostoxx +0.30%, S&P +0.10% and Nasdaq +0.15%) after yesterday's session, positive in the United States and flatter in Europe, although with the exceptions of Spain (up) and France (down). The stock markets are once again hovering near historical highs, ignoring a Brent that remains in the zone of 100 dollars/barrel, the strength of the dollar/weakness of the euro (at 1.12 usd/eur) and tensions in the fixed income market. The market continues to reward the good tone of corporate results (focus now on Q3 2026), the resilience of consumption and the theme of artificial intelligence (AI).
On the geopolitical front, Yemeni forces have taken control of the port city of Mocha and areas near Bab el-Mandeb, seizing a key position from the Houthis. We have also seen Saudi Arabia, Turkey, and Pakistan agreeing to activate their collective defence commitments.
In our country, the call for early elections for the upcoming 29th of November has been confirmed.
In Europe, statements from ECB members continued, with Nagel from the Bundesbank reiterating the upside risks to inflation from energy prices (latest CPI 3.8%), although acknowledging that for the moment it has not translated into higher wages and long-term inflation expectations remain well anchored near 2%. Likewise, Chief Economist Lane warns that the destruction of demand caused by the rise in energy prices could limit the ECB's ability to continue raising rates.
The market remains attentive to the complicated situation in France, where an additional risk is added: the high weight of Japan in French public debt (145 billion dollars, 6.6% of debt holdings in the hands of non-residents) and the lack of incentive to maintain investments abroad in a context of rising Japanese interest rates. Today we could have the budget proposal from Marine Le Pen's party.
Continuing in the fixed income market, yesterday we had statements from Ray Dalio warning of vulnerability in the United States (with the 10-year Treasury at 5.32% and the 2-year at 4.83%), in the face of a possible withdrawal of demand from China and Japan, pointing out the risk of China continuing to accumulate liabilities from a geopolitical rival and Japan repatriating capital.
Noteworthy from yesterday in the macro front in the United States is the September ISM services index, with stability at levels of clear expansion, but the focus on a price component that is already elevated, which climbed to levels seen in mid-2022. We also had final PMIs for September that confirmed the preliminary reading. Noteworthy in the Eurozone is the increase in the PPI for August (up to +8.2%) and the weakness of the Sentix investor confidence index for October.
