Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening European markets traded without major fluctuations. The session should be divided into two parts. In the morning, investors should focus on specific issues related to companies. In the second part of the day, European markets should be conditioned by the Wall Street reaction to the jobs report. Therefore, it is expected that in the late morning, which divide the two parts of the session, watch a decrease in volume. AstraZeneca announced that it intends to acquire the California ZS Pharma by 2700 M.USD. The oil sector should continue to register a underperformance due to the recent weakness of the crude. In the mining sector, shares in Billiton may be pressed after a mine that holds in Brazil (in partnership with Vale Rio Doce) has been flooded by a river full. The shares of Standard Chartered may also retreat after Moody’s reduced the company rating from AA- to A+ because of the reduction in projections of results and the deterioration in the quality of some assets.
American indices closed without major fluctuations, reflecting the expectation that precedes the publication of today’s employment report. Despite the major indexes have finished the session with contained swings, some sectors showed marked variations. One such sector is biotechnology. The value of this type of stock depends essentially on the forecasts of the results that supposedly their businesses will generate in the future. The current value of these earnings is calculated by the quotient between forecasts of future profits divided by the interest rate. At the enterprise level, to mention the appreciation of 4.60% of Facebook shares as a result of the good results reported by the company. In the macroeconomic field, the weekly claims for unemployment benefits amounted to 272,000, up from 262,000 estimated. This was the 35th consecutive week that this indicator is located at levels below 300,000, thus signaling the dynamism of the labor market. Yesterday was very productive with regard to the intervention of members of the Fed, especially the Atlanta Fed Governor who said that the possibility of an increase in interest rates in December has strengthened up over of the time. If the economy has generated 180,000 or more jobs in October and the unemployment rate back down to below 5%, the probability of a rise in interest rates in December becomes high. Equally important will be the change in wages. Despite the marked improvement of the labor market in the last year, the increase in wages has been modest, thus contributing to reduced levels of inflation.