Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European shares were traded with losses. Initially, the sectors that deserve the biggest highlight will be the oil, banking and chemical. Strong crude falls in recent days and the prudent stance of many CEO when asked about the future should continue to weigh on this sector. The banking sector can also be pressed initially. In addition to the problems afflicting the Italian and Spanish banks, the decrease in assets under management UBS negatively influenced some of their Swiss peers. Today, BBVA reported for the 4th quarter 2015 an annual increase of 36% in net income which amounted to 940 M € (up from 824.9 M.€ estimated), due to the expected lower provisions, but net interest income was below expectations. In the chemical sector, the main news is the interest of Chinachem, chemical company owned by the Chinese State, the Swiss Syngenta, a company focused on the production of fertilizers and pesticides (one operation evaluated in 43,000 M.USD).
US markets closed with sharp losses, which run counter to the pattern of resilience demonstrated the previous day. The main reason for yesterday’s fall was a correction for the third consecutive day, of the oil price. The causes of this weakness were the weather forecasts that point to a mild February (thus reducing the demand for heating oil), the lack of developments in relation to a possible agreement between OPEC and Russia with a view to a reduction in production crude oil and the news that from March onward Iran will start exporting 2.1 million barrels per day compared to the current 1.5 million. The short-term correlation between the oil and the main stock indices is greater than 90%. Today the attention of investors will be centered in the publication of oil stocks in the US (15.30). Economists anticipate an increase in reserves of 3.68 million barrels and 2.11 million barrels of gasoline. In terms of results, Exxon Mobil reported a drop of 58% in its quarterly profits, reaching an EPS of 0.67 USD, which exceeded the estimated 0.63 USD. Revenues amounted to 58,000 M.USD also higher than anticipated. The results are Exxon, in relative terms, better than those of its peers. The big oil companies have managed to limit the negative impact of increasing crude oil falling refining margins. Pfizer and Dow Chemical announced earnings and revenue that beat forecasts. The United Parcel Service reported higher quarterly earnings not only the expected as well as that recorded in the same quarter of 2014. Revenues were higher than in the similar quarter but fell short of the estimated. Nevertheless, the results as a whole can be considered good. The importance of UPS’s results is that the activity of this company is a reliable sample of the world trade.
Asian markets closed with sharp losses, justified by the weakness shown by European and American stock markets. The only exception was the Shanghai Stock Exchange that traded with contained losses. Today it was reported that in January, the PMI (purchasing managers’ index) for services increased from 50.2 to 52.4. But perhaps the overperformance of the Chinese market was due to the approach of the New Year festivities and the possibility (purely hypothetical) that the Bank of China to surprise the financial markets during this period with some monetary measure.