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 slight losses, given the decline in oil prices in global markets. The trading volume will be very low, and the Euronext shall close trading at 13:05. Many markets are already closed, as the German already closed yesterday at 13:00. Compared to its European peers, this exchange has over-performed, with an annual appreciation of 9.56%, due to the reduced weight of mining and oil companies have in the DAX, the good performance of the most cyclical stocks, as well as the devaluation of the Euro. For 2016, most analysts believe that the euro area stocks will continue to be one of the preferred assets for investors, considering the signs of recovery of European enterprises and the recent increase in monetary stimulus by the ECB. However, it should be remembered that the measures recently announced by the institution fell short of what the market anticipated, which caused significant falls in the main European markets. Despite all the setbacks recorded in 2015, the European market was able in 2015 to register a over-performance relative to other regions (the Stoxx Europe 600 index recorded a gain of about 8% since the beginning of the year vs. the appreciation of 0.90% of S & P500) and therefore according to the predictions of many analysts Europe will be the best investment for 2016. Thus, in view of a weaker Euro, the prospects for more strengthened economic growth and an increase in consumer confidence, in terms of sectors, preferences most analysts go to the financial sector (banks in particular that will benefit from the high yields of bonds of the eurozone before the expectation of higher inflation), also for sensitive sectors to exchange rate changes (technological and pharmaceutical) and to consumer discretionary sectors (benefiting from increased consumer confidence) as the retailers.
The oil price decline was again the cause for the negative closing of US exchange. All 10 sectors ended lower, with the energy companies and producers of raw materials leading the losses. In fact, already in Tuesday aftermarket oil prices had retreated after the American Petroleum Institute has presented an unexpected increase in oil inventories last week. This downward movement in oil prices was intensified yesterday by the confirmation by the Energy Information Administration of an increase of 2.6 million barrels in oil inventories, compared with an expected decline of 2.5 million barrels. In fact, the impact of China’s economy cooling continues to have a dominant effect on the commodity market. Oil prices are set to a minimum, with OPEC not to change its policy: in its last meeting, this institution decided not to change its policy and agreed on a new ceiling of production at 31.5 million barrels per day ( previous ceiling was set at 30 million barrels, but this figure no longer made sense because it was surpassed numerous times throughout the year). In this context, everything seems to indicate that in the near future, the current scenario of low prices of this raw material shall be maintained.
Asian markets were also penalized by the drop in oil prices this holiday season. The Japanese market, which is now closed, ended the year with a gain of 9.10%, exceeding the 7.10% recorded in 2014, favored by the depreciation of the Yen which benefited exporting companies, the US economic recovery and the acquisition of assets made by the Bank of Japan. But in terms of annual gains, the Chinese market maintained its leadership with a 10% gain, even after losing more than 40% in late August, dragged down by the economic slowdown in the country.