Stock Markets – Daily Note – 26/Nov

Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In the pre-opening European markets traded with contained gains. The volume of the session will be below average due to the US holiday. The degree of geopolitical risk and the euro’s behavior remain the dominant factors in the markets. The recent weakness of the European currency has favored sectors such as industrial and automotive, which constitute a significant share of the DAX. The weakness of the Euro has been held primarily with increasing geopolitical risk (that benefits assets denominated in dollars), increasing differential between US and the German yields and  and the prospects for a rise in interest rates in the US, which contrasts with the possibility of the ECB implement new measures to increase the supply of Euros. The ECB meeting next week is expected to gain an increasing weight in the decisions of European investors, and one should not exclude that some of them shall try to anticipate any decision of this institution.

US markets ended without major fluctuations, with the Dow Jones recording the lowest intraday variation of this year. During the first phase of the session, investors reacted to various economic data. After the reaction to economic indicators, many fund managers prepared for the Action Day of Thanksgiving that will usher in a prolonged weekend, to the extent that on Friday the session on Wall Street will be shorter, so many investors are away from their trading rooms. Today is Thanksgiving Day, which is celebrated every year on the fourth Thursday of November.

A curious note: some estimates point that will be consumed during the day in the US about 47 million turkeys. The turkey makes up the traditional menu of this special day.

Asian markets closed without a common trend. Japanese shares closed higher after Prime Minister Abe announced the cuts on IRC may be higher than expected. In China, the session was also marked by the announcement of new economic measures, this time to encourage imports and exports, but the reaction of investors was quite contained.