DAX: De40 gains 0.50% amid huge volatility during US elections 🔔

• Indices in Europe are experiencing strong growth
• DAX gains 0.65%
• The SUI40 index from Switzerland gains the most
• The European VIX falls by 7.20%

In European markets, we observe, similar to the US, investor confidence in Donald Trump's victory. In fact, just before this article's publication, Trump had already secured 277 electoral votes, essentially confirming his final victory. However, the battle in Congress and the Senate remains open. There is, nonetheless, a high likelihood of a Republican win in these areas as well. Currently, Republicans hold 51 Senate seats, although some are from states where vote counting is still ongoing.

In financial markets, we largely see a continuation of movements associated with the so-called "Trump Trade" just before the elections. The strongest reactions are observed in the dollar, bonds, and contracts on the Russell 2000 index. Interestingly, European indices are gaining, while the EUR and yields on European country bonds are falling. Conversely, yields on U.S. Treasury bonds have reacted strongly in the opposite direction. The 10-year U.S. Treasury yield rose to 4.44%, while the 2-year yield reached 4.27%, matching levels last seen in June 2024 and earlier in October 2023. This suggests that bond investors prioritize the election results and economic consequences of Trump's victory over the Federal Reserve, despite expectations that the Fed will cut interest rates this week and continue the rate-cutting cycle next year.

Meanwhile, a potential significant shift in U.S. policy is not being well received by markets in Asia and Europe. In the short term, attention should be given to the strong rise in the dollar and capital outflows from emerging markets. In European markets, bond yields are falling sharply, including in France, Germany, and Switzerland.

DAX (H1 Interval)

The German index experienced significant volatility. Initially, we saw a drop in quotations to the lower limit of 19,100 points as Trump took an early lead. Subsequently, quotations rose significantly to the upper limit around 19,600 points—a move of over 2.40% in just 3 hours. Currently, quotations are calming around yesterday's levels.

Source: xStation 5

The index is experiencing strong growth in companies such as Siemens Healthineers, Fresenius, and Heidelberg Materials. However, in each case, this is due to fundamentals.

Source: Bloomberg Finance LP

Company News

Siemens Healthineers (SHL.DE) reported fourth-quarter adjusted EBIT of €1.12 billion, up 7.2% year-over-year, matching analyst expectations. Revenue rose 4.5% to €6.33 billion, slightly below the €6.35 billion estimate. Imaging segment performed strongly with adjusted EBIT of €859 million (+15% y/y), while Diagnostics lagged behind estimates. Advanced Therapies EBIT grew 20% y/y. EPS came in at €0.55 compared to €0.48 a year ago, below the €0.57 forecast, with adjusted EPS of €0.67 surpassing expectations. Free cash flow surged to €1.23 billion. For 2025, the company forecasts comparable sales growth of 5%-6% and adjusted EPS of €2.35-€2.50.

BMW's (BMW.DE) third-quarter automotive EBIT margin dropped to 2.3%, down from 9.8% year-over-year and below the 2.87% estimate. EBIT fell 61% to €1.70 billion, slightly surpassing the €1.66 billion estimate, while sales declined 16% to €32.41 billion, missing projections. Automotive revenue decreased 13% to €27.85 billion. Financial Services revenue rose 2.5%, and Motorcycles revenue grew 8%. BMW maintained its annual forecasts for automotive EBIT margin at 6%-7% and expects stronger Q4 earnings despite significant expenditures. CEO Oliver Zipse emphasized recovery efforts following third-quarter challenges.

Hensoldt (HAG.DE) reported nine-month adjusted EBITDA of €187 million, a 24% increase year-over-year, with revenue rising 21% to €1.38 billion and order intake surging 45% to €1.86 billion. The backlog grew 19% to €6.51 billion. The company expects a full-year adjusted EBITDA margin of 18%-19% and revenue around €2.3 billion. Hensoldt highlighted strong order intake, driven partly by the ESG Group's contribution of €172 million, and specified its book-to-bill ratio forecast at around 1.2x.

In the third quarter, Novo Nordisk's (NOVOB.DK) weight-loss drug Wegovy generated revenue of 17.3 billion Danish kroner ($2.5 billion), surpassing the average analyst estimate of 15.6 billion kroner. This strong performance comes amid investor concerns following Eli Lilly's recent underwhelming obesity drug sales.