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Sunday, October 17, 2021

Rising European stocks point to Wall Street futures gains as investors digest German election results

European stocks have risen and Wall Street futures have pointed to early gains as investors digested Germany’s election results, with clear relief that the far-left failed to get enough votes to enter parliament and so the ruling coalition is more likely to focus.

Germany’s blue-chip DAX rose 137.10 points, or 0.88 percent, to 4:32 a.m. New York time on Sept. 27, when the pan-European STOXX 600 index added 1.26 points, or 0.28 percent, in first trading.

Elsewhere in Europe, the UK FTSE 100 rose 20.57 points, or 0.29 percent, while the French CAC 40 rose 40.53 points, or 0.61 percent, to 4:35 in New York time.

In U.S.-centric markets, the Nasdaq futures fell 25.75 points, or 0.17 percent, the S&P 500 futures rose 9.25 points, or 0.21 percent, and the Dow Jones futures rose 133.00 points, or 0.38 percent, until 5:38 a.m. New York time.

Germany will face months of challenging Germany to form a coalition government after the September federal elections, bringing together the three parties to clear the 50 percent limit for all seats in parliament.

Olaf Schulz’s center-left Social Democrats will try to form an alliance with the Greens and the Liberal Liberal Democrats (FDP) called the “Traffic Light” Alliance. At the same time, Christian Democrat candidate Armin Lachett plans to try to form a government with the FDP and the Greens, known as the “Jamaica” Alliance, known as black, yellow and green for the color of the country’s flag.

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“Both the Jamaica and Traffic Light alternatives will create continuity from the current government in terms of monetary and EU policy. A traffic light alliance will be easier in both cases, but the difference from the current government will be moderate. JP Morgan economist Greg Fujesi told Reuters.

The market movement on the morning of September 2 painted a picture of relief for investors as the party on the far left failed to win enough votes to cross the 5 per cent limit required to enter parliament.

Holger Schmiding, chief economist at Bernberg Bank, said in a study that an alliance involving Link, the Social Democrats and the Greens could “hinder the growth of the trend through tax hikes, reversals of reform and excessive regulation.”

The provisional results indicate that the Social Democrats won 25.7 percent of the vote, ahead of the Conservative group by 24.1 percent, which includes the Christian Democrats. Greens came in at 14.8 percent and FDP at 11.5 percent.

Reuters assisted in compiling this report.


Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. He received the best writing advice from Roy Peter Clark: ‘Hit your goal’ and ‘Leave the best in the end.’


This News Originally From – The Epoch Times

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