2024-11-06 15:56:00
The clear victory of Donald Trump in the presidential election, and probably that of the Republican camp in both houses of Congress, gave a boost to the American markets. At mid-session on Wall Street, the main indices are on the rise, whether the S&P 500 (+2%), the Dow Jones (+3%) or the Nasdaq technology stock index (+2%).
Another big winner, the dollar. The American economy, which has one of the highest growth rates in developed countries, is already attracting investors from around the world. Donald Trump’s promises on taxation and the increase in expected returns should further strengthen the dollar. Which will not suit the next president, because the appreciation of the dollar further reduces the effectiveness of tax rights. customs that he intends to put in place.
The strongest impact is on bond markets, with US Treasury yields soaring, even as the US central bank is expected to announce a further 25 basis point cut in its key rates tomorrow. Thus, the yield on the 10-year sovereign bond gained almost 15 basis points – which is a lot – to exceed the threshold of 4.4%.
Donald Trump’s main measures, on customs duties and immigration, are in fact considered inflationary, not to mention a budget deficit which should once again disappear given the planned tax cuts. “We expect a more dynamic U.S. economy, with growth above potential and inflation above the Federal Reserve’s target. Interest rates should then be higher than pre-election forecasts,” summarizes Samy Chaar, chief economist at Lombard Odier, in a note.
European stocks are struggling
While American stocks are celebrating, European stocks are starting to take a hit. After welcoming Donald Trump’s victory at the opening of the markets, undoubtedly reassured to avoid a long period of uncertainty and political instability, the European indices began to plunge into the red mid-session. The German Dax index has even fallen into the red: Germany has become, in recent years, very dependent on the American consumer and will certainly be, given its trade surplus with the United States, the first target of the next president who wishes, in a very mercantilist approach, to rebalance the American trade balance at all costs. In Paris, the CAC 40 is also struggling; certain key sectors, such as luxury, could suffer from a resumption of the trade war.
On Wall Street, investors only look at the positive impact of a tax policy favorable to businesses and ultimately to growth. Growth already assured for 2025 thanks to subsidies granted by the current American administration. As a result, the stock market should benefit more generally from this honeymoon, with performances less concentrated on the “magnificent 7”, these Tech stocks which have been in the American stock market for two years, including Tesla.
Thus, bank stocks are soaring because Donald Trump has promised a relaxation of regulations and capital requirements. The automotive sector is also benefiting. During the campaign, the Republican candidate said he wanted to eliminate tax credits for electric vehicles, which would be positive for manufacturers like GM and Ford who earn more money with their gasoline vehicles, but also for… Tesla which would have a competitive advantage in a subsidy-free environment. The car manufacturer, led by Elon Musk, now a close ally of Donald Trump, is gaining nearly 10% on the stock market. The White House’s changes in attitude regarding AI and regulation could also be beneficial for the Tech sector, which has been the source of market gains in recent years.
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**Interview: The Impact of Tropical Storms on the Preowned Vehicle Market**
*Host:* Welcome to the show! Today we’re diving into an important and timely topic: how tropical storms and hurricanes are affecting the preowned vehicle market. Joining us is Jane Smith, an automotive market analyst with over a decade of experience in the industry. Jane, thanks for being here!
*Jane:* Thank you for having me! It’s a pleasure to be here.
*Host:* Let’s jump right in. We’ve seen an increase in tropical storms like Hurricane Helene this past season. Can you explain how these storms impact the used vehicle market?
*Jane:* Absolutely. Hurricanes and tropical storms can lead to significant flooding, which can cause extensive water damage to vehicles. When a car is exposed to floodwaters, it can lead to issues with the electrical system, interior, and overall functionality. As a result, many of these vehicles, once repaired and on the market, may incur a decrease in value, which impacts buyers’ perceptions and trust in the preowned market.
*Host:* That’s a critical point. So, after major storms, do you notice a trend in consumer behavior regarding used vehicles?
*Jane:* Yes, definitely. After such weather events, we see a surge in demand for vehicles that are known to be unaffected by flooding. Consumers become increasingly cautious, scrutinizing vehicle histories more closely. Platforms like Carfax or AutoCheck see an uptick in usage for vehicle history reports. Additionally, sellers might find it harder to sell flood-damaged vehicles or they may have to reduce their prices significantly.
*Host:* Interesting! Do you think this trend will impact the overall prices in the used vehicle market in the long term?
*Jane:* In the short term, yes. We often see a dip in prices for particular models that are known to have been affected by flooding. However, over the long term, as the market stabilizes, prices for unaffected vehicles can rebound as supply diminishes. The key factor will be how frequently these storms occur and how effectively both consumers and dealers manage the risks associated with flooding.
*Host:* That’s insightful! what advice would you give to consumers looking to purchase a preowned vehicle during storm season?
*Jane:* My biggest piece of advice would be to do thorough research. Make sure to check the vehicle’s history for any reports of flood damage. It’s also wise to have a trusted mechanic inspect any used vehicle before purchasing. Being informed is your best defense against buying a potentially compromised vehicle.
*Host:* Thank you, Jane. This has been incredibly useful information for our listeners. We appreciate your time and expertise!
*Jane:* Thank you for having me! I’m glad to share this information.
*Host:* And thank you to our audience for tuning in. Stay safe and informed as we navigate through storm season!
