Dax 30; Ftse 100; SP 500 - Market View

Asian shares had a positive session, driven by the strong Wall Street performance. Again, the Japanese market stood out positive. In addition to the favorable effect of the US markets, the Nikkei benefited from a report in the Kyodo News newspaper that point in the government Abe will implement a stimulus plan for the economy amounting to 188 000 M.USD. Previously, circulated in the market a rumor that the stimulus would total the 95,000 M.USD.
 
In recent years, the central banks were the protagonists of the rise in global stock markets by adopting stimulus measures that allowed them to overcome adverse factors such as the loss of the maximum rating of US debt, the crisis of European sovereign debt, Japanese economic stagnation and more recently Brexit, among others. This created a dependence that financial markets have from central banks, a dependency which is demonstrated every time occurs a correction of the markets when the support of these institutions seem destined to decline.
 
In the oil sector, Schlumberger and Halliburton, two of the largest suppliers of oil sector services, argued that probably the minimum the price of oil may have already been reached. In 2013, the price of crude oil traded at levels above 112 USD / barrel before entering into a strong fall that led earlier this year to levels close to 26 USD / barrel. The oil sector will be the protagonist of this week’s earnings season and its quarterly accounts will be the main challenge for the American markets. Analysts estimate that on average profits from this sector have retreated 71%. More relevant than the results will be the prospects that the CEO of the oil companies will provide.
 
US markets closed with modest losses. This move was due in part to the oil correction and partly a justified profit taking after the strong gains achieved since the end of June. The decline was widespread, covering 9 of the 10 sectors that make up the S&P500. The only exception was the retail sector. The weakness of the oil conditioned not only its sector such as mining (given the correlation between crude oil and other industrial commodities) and industrial. The Nasdaq was conditioned by some profit taking and the analyst's decision at BGC to reduce the recommendation from Hold to Sell. For the next 12 months, BGC reduced Apple's price target from 114 USD to 85 USD. Yesterday, shares of Apple closed at 97.34. This recommendation of the BGC may have cooled the positive sentiment towards the technology sector that the good results from Microsoft and IBM had helped build. Now, attention will focus on results from Apple, scheduled for 21:30 GMT.
 
The major Asian indexes closed lower, especially the Shangai composite which was losing almost 2.50% at 7:15 am. The only exception was the Nikkei. The Japanese stock market continues to fluctuate according to the rumors about the amount of the tax plan incentive that the Abe government promised. Yesterday, the press pointed to 57000 M.USD this morning circulated news that indicated an amount of 254000 M.USD.
 
At yesterday’s meeting, the Central Bank argued that consumption (which is the main engine of the economy) continues to accelerate and the labor market recovered significantly after reading May. While not explicitly referring to Brexit, the Fed acknowledged that the short-term risks to the economy decreased. Still, the central bank admitted that it will continue to closely monitor the evolution of inflation (which still remains below the desired level) and the evolution of the world economy. This improved perception of the US economy and the reduction of external risks open the possibility of a rise in interest rates at the next meeting in September.
 
The long-awaited meeting of the Bank of Japan (BoJ) ended up having a limited impact on Asian session. In addition to a somewhat volatile initial reaction, the major Asian indexes ended trading with contained variations. The BoJ announced that it will double the annual purchase ETF to 56700 M.USD as well as the special program of providing credit to local businesses for a total of 24,000 M.USD. Despite the rise in the Nikkei, the appreciation of the Yen indicates that this decision fell short of the anticipated by the market.
 
After 5 days consolidating, Last Friday we had an inside day in Dax. It seems we have a good long entry today.

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Happy trading
 
The price of oil rose in a context of emerging speculation about the possibility of the freezing of oil production.
 
The highlight of today will for the release of the minutes of the last meeting of the Fed (the 26 and 27 July), which may give some signs on the posture of the Fed. The improved perception of the US economy and the reduction of external risks open the possibility of a rise in interest rates at the next meeting in September. However, since this meeting important data have been released, and such as the Fed itself said, with a bipolar character, such as reading of GDP for the 2nd quarter, the employment report for the month of July and retail sales in the same month.
 
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