Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European equities opened slightly lower, following the faltering sentiment mirrored by American indexes yesterday. The automotive sector will continue to receive special attention from investors. In recent sessions, Volkswagen lost about 22 000 M. € in market capitalization. The big question is if this fall already reflects all the negative factors of the scandal. But perhaps the biggest uncertainty is what will be the impact this situation will have on the reputation of Volkswagen, because over the past two decades, the company became the second largest producer with a reputation for excellence and reliability. Today’s meeting will also be marked by the publication of the IFO index, which measures the confidence of German businessmen. Economists estimate a slight bending because of the developments in China and other emerging markets. The various components of this index, relative to expectations is particularly important as it will indicate that German economic actors think about the risks of the current situation: is it a passing tendency or will shape their future decisions. China has been one of the most dynamic destinations for German exports and many companies have built factories in this country. Additionally, exports of many European countries depend on German exports.
US markets closed without major fluctuations. This behavior turns out to be disappointing in light of recent losses suffered by the stock market. In fact, contrary to what occurred in Europe, the US indices were unable to rebound, In recent years, the “buying the dips” strategy (buy the corrections of the market) had been a very popular (and profitable) strategy among investors, whether institutional or private. However, in recent weeks there have been few followers, signaling that in August, the strong and sharp falls suffered and the volatility observed, marked investor sentiment. Today, the President of the Fed, Janet Yellen, will be present at a conference organized by the University of Massachusetts at 22h00. Given the uncertainty generated by her press conference in last week’s meeting, this time she may try alleviate the situation.
Asian markets closed with contained losses, with the exception of the Nikkei. Japan’s stock market was closed in the first three days of the week, so today reacted to disappointing data from China and the weakness shown by the major world stock market indices. Automakers had the hardest hit during the day, which reflected the latest developments of Volkswagen. The index Markit/Nikkei Japan, which measures manufacturing activity in the country, retreated in September from 51.7 to 50.9.