Dax 30; Ftse 100; SP 500 - Market View

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Stock Markets – Closing Note - 16 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The issue of Brexit and the ensuing political instability that has arisen in recent days have once again influenced investor sentiment. Investors will continue to structure their expectations according to the evolution of events. Yesterday is a convincing proof of the speed of events. The session started under good auspices after Theresa May managed to bring together within her cabinet and her party a consensus that would increase the likelihood of the agreement reached with the European Union being approved in Parliament. Subsequently, the massive dismissal of six executive ministers forced investors to recalculate these probabilities. In this context, the London Stock Exchange finished in low, although with a contained devaluation. This behavior was justified by the positive performance of the mining companies, which also favored the sector of raw material producers and made it the best performer in sectorial terms. Oil prices rose on international markets, fueled by expectations of OPEC production cuts, although production of this raw material at record US levels has limited the upward trajectory. In macroeconomic terms, Eurostat today reported that consumer prices in the Eurozone increased 2.20% in October this year. This is the highest growth in consumer prices since December 2012.

The US market traded lower, with the technology sector ranking the 2nd worst performer in the S&P 500 index. Nvidia shares fell more than 17 percent after showing disappointing revenue and prospects. In the macroeconomic level, industrial production in October registered an increase of 0.10%, below the expected 0.20%.

 

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Stock Markets – Closing Note - 19 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In the begining of the week, uncertainty surrounding Brexit was once again influencing European markets. In addition, the news about Renault more specifically conditioned their stocks and the sector as a whole. President of Renault, CEO Carlos Ghosn, was arrested on suspicion of having reported a lower salary than he actually received in Japan for his duties at Nissan. Carlos Ghosn will be fired from the Japanese manufacturer. Renault shares fell 8.43%. Once again, the producers of raw materials presented a relative overperformance, thus helping the performance of the British market, where some mining companies negotiate.

Wall Street traded lower, under pressure from Apple and semiconductor companies. Apple's shares were down 3.40 percent after the Wall Street Journal reported that the company cut production of its latest iPhones earlier this year. The technology sector was also penalized by the news that Chinese authorities have alleged "significant evidence" of Samsung's antitrust, SK Hynix and Micron Technology's violation of antitrust rules. Shares of Micron and Advanced Micro Devices were down more than 3 percent. In terms of indicators, the sentiment index of builders stood at 60 in November, compared to 67 expected by economists.

 

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Stock Markets – Closing Note - 20 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The Nasdaq's strong losses during yesterday's session spread to Asian markets and European stock markets. Although the technology sector accounts for only 6% of the DJStoxx600 (compared to the 25% it represents in the S&P500), today it has depreciated more than 2%. Two other sectors that were heavily pressured were banking and commodity producers. In Frankfurt, Deutsche Bank was penalized for the ongoing investigation into allegations of involvement in the money laundering scandal of Danske Bank. Still in the banking sector Société Générale declined 2.13%, after the news that the bank paid a fine of 1340 M.USD to the American authorities for not respecting the sanctions imposed by this country to Iran, Sudan and Cuba. In London, the mining companies reported significant losses, thus harming the producers of raw materials. Brexit's latest development concerns the inability of the internal opposition to Theresa May to issue a motion of censure to the Prime Minister. In the oil markets, crude has once again accumulated losses, falling by more than 4% today. Investors recently expected OPEC (Saudi Arabia-led) to cut output in order to stabilize the drop in oil prices, which has lost 25 percent since early October.

The selling pressure that hit Wall Street yesterday, and more specifically the technology sector, remained in today's session: the major companies in the industry, namely the well-known FAANG. In recent days, market sentiment over major tech stocks has been shaken by a Wall Street Journal report that Apple has cut back production of its latest iPhones earlier this year. Apple declined today by about 2.50%, while Amazon, Facebook and Netflix were down more than 2.50%. Chipmakers also traded with sharp losses. In retail, Target disappointed the market by reporting declining margins and increased sales, joining the long list of retailers that gave the market little cheering news before the so-called holiday season. In terms of economic indicators, homes at the start of construction increased 1.50% in October, compared to an estimated growth of 1.80% by economists. On the other hand, the number of building permits decreased less than expected (-0.60% vs. -0.80%).

 

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Stock Markets – Closing Note - 21 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

After significant losses at yesterday's session, today's session was positive for European stock exchanges. Several sectors closed with valuations above 1%. One of these was the banking sector, with Italian institutions making gains, with news that Italian Prime Minister Matteo Salvini may be preparing to revise the State Budget. As expected, the European Commission rejected the revised budget proposal submitted by the Italian Government and could formally initiate the sanctions process. Still in the political field, the UK's Prime Minister, Theresa May, is meeting in Brussels with the President of the European Commission, Jean-Claude Juncker. May will continue negotiations on the departure of the United Kingdom from the European Union. In the US, oil prices rose, a performance favored by data from the US Petroleum Institute, which shows that US crude reserves unexpectedly fell last week. However, today it was the turn of the Energy Information Administration of this country to have reported that oil reserves increased for the ninth consecutive week. Boosting the car sector, notably Renault, was recovering after the scandal over the arrest of CEO Carlos Ghosn.

Wall Street traded bullish, with much of the tech companies recovering from recent losses. Still, after the strong selling pressure that shook the technology sector yesterday, news was still worrying. Foxconn, Apple's largest supplier, today announced a cost-cutting plan, including a reduction in the number of employees, anticipating a 2019 "very difficult and competitive" year. On the macroeconomic level, there were several data known today, since tomorrow is a holiday (Thanksgiving). Orders for durable goods during the month of October fell 4.40%, compared with an expected decrease of only 2.60%. If we exclude transport orders, this indicator increased by 0.10%, below the expected 0.40%. Meanwhile, the advanced indicators of the economy during the same month were in line with expectations (0.10%). On the other hand, the number of weekly applications for unemployment benefits stood at 224 000, compared to the expected 215 000. On the real estate market, sales of used homes rose more than expected (1.40% vs. 1%) and the consumer confidence index, measured by the University of Michigan, reached 97.50, below the estimated 98.30. However, in terms of monetary policy, Reuters advanced that the MNI news agency said the Federal Reserve is planning to pause interest rates by the spring of next year.

 

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Stock Markets – Closing Note - 22 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets closed lower, losing part of the gains they conquered yesterday. The celebration of the Thanksgiving holiday in the US withdrew some liquidity to today's session, which showed below average volumes. The sectors that contributed the most to today's flexion were mining and telecommunications. The fall of the banking sector has been softened by the rise of transalpine banks. After the European Commission rejected the Italian State Budget, local investors seem to believe that the government of Rome is taking a more conciliatory stance, despite the statements of some of its members.

The US market is closed today to commemorate the Thanksgiving day.

 

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Stock Markets – Closing Note - 23 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The European indices closed with contained valuations. In its opening hours, the European session was characterized by a resilience to the significant drop in Chinese stock markets (which accumulated losses of more than 2%). The volume traded was below average due to the reduced session in New York. Perhaps the European markets would have been able to achieve more significant gains had it not been for the sharp falls in the mining and oil sectors. Oil traded at the lows last year, with Brent reaching 60USD/barrel. To reinforce the recent downward trend has now been the news that Saudi Arabia's production is at its maximum and that US oil reserves have been increasing. The decline in oil was spreading the trend of other industrial raw materials. On the positive side, the stocks associated with tourism and pharmaceuticals emerged. At the macroeconomic level, the PMI indices, related to economic activity and services, were bending relative to October. The November readings were also below expectations, confirming the decline in economic growth in the Euro Zone.

US stocks were trading at a loss. The session today is shorter, ending at 6 PM GMT. The main hallmark of the session, in addition to the drop in oil prices, was the overperformance of stocks more focused on the domestic economy (customized by the Russell2000 index), which contrasted with selling pressure on top technology stocks.

 

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Stock Markets – Closing Note - 26 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European indexes closed with valuations above 1%. The deal reached over the weekend for Brexit, the latest news from Italy and the rise in crude oil were the main catalysts of this rise. The understanding reached between the European Union and the UK over the weekend softened the nervousness among investors. British stocks and pound sterling traded higher. However, on the horizon lies the challenge that Prime Minister Theresa May will face: to bring together an internal consensus capable of securing Parliament's approval of the agreement drawn up over the weekend. The Italian market was the best performer of the day. To galvanize the transalpine investors and to reflect their European peers was the news reported by the local press. According to this source, Deputy Prime Minister Matteo Salvini, who has led the tough wing of the Government in its relationship with Brussels, has opened the possibility of the 2019 Budget to undergo some tinkering in order to reassure international investors. The increase in crude oil led to the appreciation of its sector as well as that of the miner, with which it has a high correlation. At the macroeconomic level, the IFO index, which measures the sentiment of German entrepreneurs, fell from 102.6 in November to 102.0, a level also below the forecast of 102.3.

US markets were trading higher, with volumes recovering after the festive period late last week. The catalyst for the climb was the first numbers of the shopping season (or holiday season) and its positive effects in the technological sector as well as the recovery of crude. Although definitive figures are not yet available, on Black Friday, online purchases amounted to 6200 M.USD, which represents a 24% increase over the same day of 2017.