European markets trade without major fluctuations. The earning season continues today with the publication of the quarterly accounts of several Italian banks. The oil drop suggests to many investors a sign of the global economic slowdown, however, it is noted that the downward movement of crude oil is also explained by an oversupply. The fall in the Oil price is a threat that goes beyond the rational perception, to the extent that the situation in many oil producing countries begins to deteriorate. Among these producers, the biggest threat comes from Russia. This country is a major producer and Oil is one of its main sources of revenue. In the past, oil drops were the starting point for the crises of 1998 and 2008-2009. Nowadays, the fall in oil add up tensions in Ukraine and the sanctions imposed by the West. Consequently, it aggravates the delicate economic and financial situation of Russia, which negatively affects several European sectors such as oil, the beverage and luxury goods. Germany is the country with the largest trade ties with Russia and the European markets are likely to accuse some vulnerability in the coming days.
US markets closed with modest gains but enough for the Dow Jones and S&P to reach new highs. US stocks continues to be boosted by a favorable moment characterized by low interest rates, positive corporate earnings, auspicious economic data and abundant liquidity. This period of inertial rise will require new catalysts to extend the current rally. Moreover, any adverse event or factor may have a very significant impact on the underlying trend.
Today is the Veterans Day. The stock market is open, unlike the bond market and the liquidity on Wall Street should be less than usual.
Asian markets closed without major fluctuations. The only exception was the Nikkei which reached the maximum of seven years after the Bank of Japan started buying assets. Yesterday, after the closing of the Japanese market, the Bank of Japan acquired the equivalent of 265 M € of ETFs listed on the Tokyo Stock Exchange.