Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European markets were negotiating with slight gains as a result of the positive response of Asian markets to weak economic data in China. The economic agenda should dominate the first few hours of trading. The publication of the second reading of the PMI index should not depart significantly from the previous calculation, revealing that economic activity in the euro area continue to grow steadily. In the German case, considering the rise in the IFO (business sentiment index) during the month of November is not to exclude an improvement in the German PMI. At sector level, mining shares may be highlighted by positive due to the appreciation in the price of various metals in the Asian session, which should ensure the FTSE100 one overperformance due to the weight that these companies have in the English index.
American indices closed lower, highlighting the stocks of major retailers. The first shopping season numbers have not been encouraging. According to preliminary data, sales during the weekend are almost identical to the same period last year, contrary to the forecasts of the Association of Retailers pointing to a sales growth of 3.50% during the Christmas season. According to the Association of Retailers, during the last weekend, about 103 million Americans shopped online compared to 102 million who resorted to stores and shopping centers. This contrast shall intensify after the release of Cyber Monday’s numbers. The Chicago PMI index in November suffered an unexpected drop from 56.2 to 48.7. The main cause for this remarkable flexion (economists foresaw a reading of 54.0) was the sharp drop in new orders, one component whose cycles usually anticipate the cycles of the Chicago PMI index. However, in the past these significant differences, as disclosed yesterday, tend to be corrected in the following calculations. The purchase of promissory contracts and selling houses increased 0.20% in October, less than 1.50% estimated by economists. The shortage of homes for sale and rising prices appear to be limiting the number of transactions. According to the Black Knight Financial Services, house prices, on average, are only 5.60% below the maximum June 2006, when the speculative bubble in the housing market.
Asian markets closed higher, after the release of the PMI index in China. In November, the PMI index on manufacturing activity and elaborated by the Chinese Government, fell from 49.8 to 49.6. Caixin PMI / Markit index, which also measures the manufacturing activity but is calculated by HSBC, rose in the same month to 48.6. Both indices indicate that the Chinese industry is undergoing a period of contraction. The positive reaction of Asian markets may be due to the possibility of the Chinese authorities adopt new measures to stimulate the economy.