Dax 30; Ftse 100; SP 500 - Market View

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Stock Markets – Closing Note - 2 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The positive sentiment triggered by the expectation of an agreement between the US and China encouraged investors in this last session of the week. The day was also marked by investors' reaction to Apple's results. Companies such as STMicroelectronics and Infineon, suppliers to the Cupertino multinational, were ultimately more influenced by positive sentiment in the markets than by Apple's behavior. In addition, the banking sector has also been in the spotlight, the day the European regulator will release the results of stress tests. More particularly, the results of Italian banks should be more scrutinized (since the beginning of the year, Italian banks' shares have lost 22% and 34% since their April high). At the end of today's session, Unicredit, Intensa Sanpaolo, BPM Banking and Unione Banche Italiane ended up with considerable gains.

The North American market opened up, favored by the expectation around the G20 meeting that will take place in Buenos Aires between November 30 and December 1. Donald Trump announced yesterday by tweet that he had talked on the phone with his Chinese counterpart and that the negotiations between the respective countries "are going very well". This telephone conversation precedes the aforementioned bilateral meeting. However, moods were fading after news today that members of the government have said that there is still no indication of an agreement between the two countries and that it may take longer to be achieved. Thus, at the close of European markets, the Wall Street trend was already negative. On the other hand, initial optimism was also fueled by employment data. The US Department of Labor revealed that during the month of October 250,000 were created, above the estimated 200,000. The unemployment rate stood at 3.70%, the lowest level of the last 49 years. In addition, wage growth accelerated from the previous 2.80% to 3.10%, the largest increase since April 2009. In the business plan, today's highlight goes to Apple that was devalued, after yesterday after closing the company has reported the results. Revenue and EPS outperformed analysts' forecasts, but Outlook (outlook) for the fourth quarter (usually the highest-grossing quarter of sales since it includes the Holiday Season) fell short of expectations. Apple expects next-quarter revenues to be between 89,000 M.USD and 93,000 M.USD, compared to 92700 estimated by analyst consensus. In addition, the company reported that it will stop reporting on the number of iPhones sales, a fact that was closely monitored by analysts, so the reaction to this announcement was not the best.

 

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Stock Markets – Closing Note - 5 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Most European markets ended the week higher. The gains from the oil, utilities and commodities sectors contrasted with the losses of the technology sector. The banking sector closed with a slight loss. In Milan, the major banks ended up low, despite the good news revealed by the stress tests carried out on 4 banking institutions in the country. All of them reported capital ratios higher than those required in the extreme scenario: Intesa Sanpaolo reached a ratio of 10.64%, Unicredit 9.34%, UBI Banca 7.42% and Banco BPM 6.67%. The results of these tests further attenuate the risk that the economic and budgetary situation in Italy generates in the context of European stock markets. In terms of economic indicators, the ISM index for the non-manufacturing sector stood at 60.3, above the expected 59.0.

On the eve of midterm elections in the United States, Wall Street traded in different directions. In the financial sector, Berkshire Hathaway led the gains, in response to the good results reported. Other institutions also contributed to the gains of the session, such as Citigroup and Bank of America. Oil prices rose in international markets on the day the United States activated a new package of sanctions on Iran - which meant ending oil purchases in this Arab country as a way of punishing Tehran for breaches of the nuclear deal.

 

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Stock Markets – Closing Note - 6 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Most European Indexes slightly declined today. The investor focus was on the US (due to the mid-term elections) as well as on the published business results. The telecommunications industry led the losses, in contrast to the banking, retail and automotive sectors that were among the best performers. In Madrid, Siemens Gamesa showed a considerable appreciation (14%), after reaching its annual objectives. However, the company cautioned that commodity prices and emerging market volatility could penalize margins by 2019. Adecco and Deutsche Post also reacted positively to the presentation of the respective accounts. However, the uncertainty associated with Brexit and the relations between Brussels and Italy continued to weigh on investors' decisions. In terms of economic indicators, the PMI economic activity index in the Euro Zone stood at 53.1 in October, compared to 52.7 expected by economists, while the same indicator for the services sector reached 53.7, up from the estimated 53.3.

In mid-term elections, the US market was trading higher. The sentiment was expected with respect to the outcome of the mentionted elections, but the question of trade relations between the US and China was still present. Chinese Vice President Wang Qishan said Monday that China is ready to start negotiations and work with the US to resolve trade disputes. Reuters informed that senior representatives of the two countries are due to meet in Washington earlier this Friday. In sectoral terms, the industrial and technological sectors led the gains.

 

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Stock Markets – Closing Note - 7 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Today was mainly about reactions to the results of the US elections. Several sectors closed with valuations above 1%, especially the banks and the oil sector (curiously despite the drop in the price of oil). In Madrid, the banking sector performed very well in response to the Supreme Court's decision to pay the stamp duty burden associated with mortgages: contrary to the decision taken in October, the Supreme Court now determines that it will be the customers, not the banks, to bear these charges. In Frankfurt, Adidas lost ground despite raising its profit outlook for the year.

The result of the midterm elections was being welcomed by the US stock market: the Democrats managed to have a majority in the House of Representatives, while Republicans strengthened their position in the Senate. Stocks from well-known companies such as Caterpillar, Goldman Sachs, Amazon and Alphabet traded on a rising trend. In the meantime, the FED meeting will begin today, the outcome of which will only be known tomorrow. After raising the benchmark interest rate at last September's meeting, the Federal Reserve is expected to keep the range of 2.00% -2.25% and will reiterate its intention to continue tightening monetary policy in the coming quarters, an attitude supported by the most recent economic indicators.

 

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Stock Markets – Closing Note - 8 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets closed higher, in a session where the focus was on business results. However, the mood was restrained after the European Commission and IMF perspectives for the Eurozone were known. The European Commission expects the GDP of this region to grow 2.10% this year, but by 2019 and 2020 it should fall back to 1.90% and 1.70%, respectively. In turn, the IMF also lowered its forecasts for the European economy, reducing its growth estimates from 2.80% in 2017 to 2.30% in 2018 and 1.90% in 2019. The banking sector was one of the best performers in response to the good results published by Commerzbank and Société Générale, which exceeded the estimates. Commerzbank reported that its third-quarter results declined, partly due to extraordinary gains that were recorded in the same period of the previous year. Thus, profit fell from € 476m to € 218m (vs. € 202m expected) and revenues fell from € 2510m to € 2190m (vs. € 2180m). The bank reiterated its annual profit outlook. Société Générale reported a 32% increase in quarterly profit to € 1230 M., which surpassed the estimates. In Italy, BPM rose 2.86%, after announcing that it is analyzing the market conditions in order to be able to sell 8600 M. € bad credit. On the contrary, Unicredit fell by about 4%. The Italian bank revealed that losses from its investments hurt its quarterly profits. Net income decreased to 29 M. €, from 2820 M. € in 2017, when the result was driven by a capital gain from the sale of the Pioneer Investments unit. In Frankfurt, Siemens gained ground. The company has announced that it will raise its dividend even though profit has fallen to 681 M. € from the expected 737 M. € due to the high costs associated with the restructuring of one of its units.

Following the reactions to the election results, Wall Street traded with contained variations as investors awaited the outcome of the Fed meeting. Today's meeting should be of an interim nature. In fact, this month's meeting will represent a bridge between the September meeting (when the central bank raised the central rate by 0.25%) and the December meeting (when it will presumably make a further increase). As no press conference is scheduled, investors' attention will be drawn to the statement of the meeting. In this field, the FED message should not change significantly from the previous meeting. The Central Bank continues to have a positive view of the economy, based on internal consumption and the dynamism of the labor market, which will eventually bring inflation within the limits recommended by this institution. Faced with this reality, the FED should continue to increase, gradually, interest rates. In the business plan, Qualcomm lost more than 7%, after providing sales forecasts for the last quarter of the year below the analysts' estimates.

 

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Stock Markets – Closing Note - 9 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European stock markets closed lower on Friday as investors reacted to comments made yesterday by the US Federal Reserve and political developments in Italy and Brexit. In addition, reactions to published results were also observed. Raw material producers, a sector very exposed to the Chinese economy, led the losses, penalized by the sentiment that was mirrored in the behavior of the Asian stock markets today. Banks have also lost ground, with UBS being hampered by news that the US government is accusing Switzerland's biggest bank of defrauding investors of selling mortgage-backed assets that led to the global financial crisis in 2008. By its time, BBVA was also under a lot of pressure because the Mexican government intends to eliminate some of the commissions charged to clients. The Italian banks presented different behavior on a day marked by a high expectation of the meeting between Eurogroup President Mario Centeno and Italian Finance Minister Giovanni Tria after the European Commission published economic forecasts that differ from those of Rome. Allianz has advanced more than 2%. The insurer reported quarterly profits of 1940 M. € (24% on the same quarter of 2017) more than the estimated 1880 M. €. The insurer was comfortable with this year's goals. Still in Frankfurt, Thyssenkrupp fell about 9% after lowering its profit estimates for the second time this year.

In this last session of a week very rich in events (from the mid-term elections to the FED meeting), the US market was trading lower. Today, leading the losses were the energy and technology sectors. The price of oil fell in international markets, having broken the US $ 60 per barrel barrier for the first time since March. This downward trend that has been taking place in recent times comes at a time when an increase in the global supply of this raw material is expected to be faster than expected. It should be recalled that in October the price of this raw material reached its highest levels because of fears that US sanctions against Iran (which came into force this week) limited the market leading to a shortage in certain regions. However, other major producers such as Saudi Arabia, Russia and shale oil companies in the US have steadily increased production, more than offsetting the decline in Iranian barrels.

 

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Stock Markets – Closing Note - 12 Nov

European stock markets reversed to negative ground, driven by the behavior of the technological, automotive and industrial sectors. The technology companies were influenced in part by the performance of the US counterparts, more specifically by the news from Apple. Its sector fell 3.50%. In Frankfurt, SAP lost 5.65%, having agreed to acquire Qualtrics for 8 M.USD. Infineon depreciated by concerns about reduced demand. Conversely, it was the oil sector. Over the weekend Saudi Arabia announced a cut in production for December in response to the recent drop in prices. BP and Royal Dutch rose 1.18% and 0.34%, respectively. In Milan, the highlight goes to Telecom Italia that benefited from the news of an eventual merger with rival Open Fiber.

The behavior of Apple's stocks dictated part of the course of the North American market. In fact, Cupertino's stock fell more than 4.50%, after Lumentum Holdings, which manufactures technology for facial recognition for iPhones, has narrowed its outlook for the second fiscal quarter of 2019. This negative performance was detrimental the performance of the entire industry, including Alphabet and Amazon. On the other hand, in addition to the fears associated with global economic growth, the appreciation of the Dollar also pressured the stock market.

 

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Stock Markets – Closing Note - 13 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Today's session was marked by slight gains. The telecommunications companies were among the best performers, with Vodafone leading the gains, after having presented its results. The British company has announced that it will keep the dividend unchanged, thus stopping a cycle of continuous increases. The reason for this decision is the need to contain the debt after the acquisition of Liberty Global for 22 000 M.USD. The banking sector was also one of the good performers, with some Italian banks standing out. On the contrary, the oil sector recorded significant losses, reflecting the fall in the price of oil that reacted to the statements of the President of the United States. At the macroeconomic level, the annual rate of inflation in Germany reached 2.50% in October, the highest level in more than 10 years, mainly due to the rise in the prices of oil products.

Wall Street traded higher, with the tech sector recovering some of the lost ground yesterday. In addition, the news of renewed talks between the US and China on the trade issues involving the two countries also helped to support the positive sentiment. Meanwhile, oil prices fell below $ 70 a barrel, a day after Donald Trump said he hoped OPEC would not cut production of this commodity in order to raise prices.

 

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Stock Markets – Closing Note - 14 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets ended lower, prompted by the trend reversal on Wall Street. The Italian market closed down after the Italian government announced that it would maintain its economic growth and deficit forecasts for 2019, despite the demands of the European Commission to review its budget. On the macroeconomic front, Eurozone GDP grew 1.70% in the third quarter, according to the second Eurostat estimate released today. This number was in line with economists' estimates.

Wall Street traded lower, retreating from early gains. At stake was the further decline in Apple shares (due to a cut in its recommendation by an investment house) and the devaluation of the banking sector. Oil prices rebounded after Reuters reported that OPEC plans to cut oil production by as much as 1.4 million barrels a day. In terms of economic indicators, the consumer price index rose 0.30% in October, in line with forecasts, driven by rising gas prices, second-hand cars and housing. If we exclude the most volatile components, this indicator was 0.20% in monthly terms and 2.10% in annual terms (compared to estimates of 2.20%).

 

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Stock Markets – Closing Note - 15 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets have declined, pressed by the current political situation in the UK. After a pre-agreement was reached yesterday between the United Kingdom and the European Union on Brexit, several British ministers today presented their resignation. The British Pound depreciated about 1.50% against the Dollar. The car sector ended up with a loss of more than 1%, after it was reported that European car sales fell by 7.40% in October. Instead, commodity producers showed overperformance after Reuters reported that China had sent a written response to the US regarding possible progress in the trade relations of the two countries.

The US market traded on a downward trajectory. In the Dow Jones index, shares of Amazon and Walmart led the losses. The retailer reported positive quarterly results that however were not able to offset the negative impact caused by Warren Buffett's reduced stake in the company. Walmart reported a profit that surpassed the estimates (driven by online sales), but revenue fell short of forecasts. EPS reached USD 1.08 and revenues USD 124890. In the technology sector, Cisco posted a significant gain after having posted profit and revenue above expectations. Revenues increased 7.70%. In terms of economic indicators, retail sales increased 0.80% in October, above the expected 0.50%. If we exclude auto sales, this indicator rose 0.70%, compared to the 0.50% forecast. On the labor market, the number of weekly applications for unemployment benefits increased in 2000 to 216 000 compared to the expected 213 000.