Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets have opened up, reflecting the good performance of the Asian markets and the stabilization of the price of raw materials during the session in that region, however this can be a technical reaction to accumulated losses in recent days. The initial rise should be led by the most penalized sectors in recent days, as the industrial, mining and automobile. The Chinese government halved the tax on small cars. This measure benefits more local brands than European automakers. Today will be the closing quarter, a period that is seasonally favorable to equity markets. To change investor sentiment will be necessary that this recovery will extend for a few days and be accompanied by high volume. The trading volume in index or stock is an excellent barometer of the conviction of the buyers at a time when the market is in an upward movement. Using the DAX as a sample of European markets (despite the case of Volkswagen), only if this index overcome 9750/9790 (preferably with volume) is that it may be considered a sustainable recovery.
American indices closed with modest gains, especially considering the losses from the previous day. During the first few hours there has been an attempt to recover, based on biotechnology and oil sector gains. However, the first one, which reached 4% of valuations, ended the session with a loss 0.40%. The volatility of biotechnology attracted many day traders, which in turn increases the volatility. The rise in oil and the relative stabilization of other raw materials had a little visible impact in their respective sectors. However, Goldman Sachs lowered its forecast for the S & P later this year to 2000 points, 5% less than the previous. Economic data released yesterday had little impact in the session, it confirmed what is a widespread belief of investors: with a higher or lower rate, the US economy is expanding. House prices, as measured by the S & P / Shiller index, increased by 5.10% in July compared to the same period of 2014. In some US areas (as in California), the increase in house prices is caused, in part, in decreasing houses for sale (the owners prefer to wait for still higher prices), thus giving rise to a vicious circle. Consumer confidence rose in September to 103.0, beating forecasts of 97.0 and August observation of 101.3. Today will continue the activities of the members of the Fed. The most important is to Janet Yellen, scheduled for 16h00 at a conference organized by the St. Louis Fed. It is unlikely that the President of Fed departs from the outline of her speech last week, reinforcing the belief that the effects of inflation pressure are transient and that the impact of the slowdown of the global economy has a limited impact on the US economy. Besides Janet Yellen the Governor of the St. Louis Fed will also participate in this conference. Since the meeting of the Fed (17th Sep), shareholders funds suffered redemptions of around 9000 M.USD, with a significant share of this amount being applied in monetary funds. Another event which will attract the attention of investors will be the publication of ADP (Automatic Data Processing), which measures job creation in the private sector. Investors usually attach any importance to this indicator, despite its low correlation with the official employment report, to be released on Friday. Economists take advantage of the ADP report statements to improve their forecasts for the official employment report.
Asian markets closed with sharp gains, thus recovering part of yesterday’s losses. In Japan, this day represented the end of the fiscal half-year, an important date for the accounts of many financial institutions, investment funds and companies. Historically this is a session that is rarely negative. At the macroeconomic level, the industrial production decreased to 0.50% in August from the previous month, against expectations for a rise 0.10%.