Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European markets were downtrending, reflecting the behavior of the US market, as well as renewed fears about tensions between the US and Korea, with the news that the US and South Korea Start their annual military exercises today, which are expected to last for 10 days between 21 and 31 August and will be a test of North Korea’s behavior. Although planned for some time now, these exercises come at a delicate time, after several weeks of an exchange of war rhetoric between Washington and Pyongyang that drew the worst fears, although last week tensions have subsided with statements by Kim Jong that said Which for now would contain his plans. Expectations are mostly concentrated at the Jackson Hole Conference at the end of the week.
Last Friday, the US market closed lower, in a session marked by lower liquidity that made the indexes more vulnerable to more pronounced movements. For the Dow Jones and the S&P500 it was the second consecutive week of losses (in the last two weeks the Dow Jones devaluation was the most pronounced since mid-September 2016, while for Nasdaq it was the fourth week of declines, the longest series since May 2016). Promoting this selling pressure was not only the news related to the Presidency of Donald Trump, as well as the fears triggered by the attack in Barcelona. About nearly seven months after taking office as President of the United States, The political agenda has been “eclipsed” by the political instability that currently undermines the President’s political position, with potential reflections on the continuation of the executive’s economic agenda at Congressional level. Rumors that culminated in the departure of US President Stephen Bannon’s strategic advisor and the special advisor on Regulation, Carl Icahan, accentuated fears and doubts about Donald Trump’s ability to comply with announced economic measures and that have been the market’s support for several months and which heralded a significant economic recovery. In terms of business, the Nike depreciations (-4.37%) led the losses of Dow Jones, Cisco Systems (-2.16%) in the week in which it reported its results and Home Depot that fell 1.50%. Foot Locker shares fell 28%, after the sports utility company reported results well below expectations. Regarding the results of the S&P500 companies, a profit growth of 10,80% was recorded in the second quarter of the year. This was the first year since 2011, with double-digit growth in two consecutive quarters. In terms of economic indicators, the market seems to have ignored the publication of the Consumer Confidence Index, measured by the University of Michigan, which in August peaked at 97.60 in January, compared to 93.40 in January.
Asian markets closed in different directions as investors digested recent US policy developments and positioned themselves against the potential US and South Korean reaction to the onset of military exercises. In Japan, gains from Oil companies were nullified by the retreat of car manufacturers, the financial sector and technology-related companies.