Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European equities have a negative trend, due to the sharp fall in oil (-4.75% at 7:20 AM). On Sunday in Doha (Qatar), the OPEC and other producers did not reach an agreement on a freeze of production. Although numerous press statements and public announcements, apparently the reason for the failure of negotiations was due to a misunderstanding between Iran and Saudi Arabia. After 4 years of sanctions, Iran wants to resume his former production, considering its position an exception within the framework of OPEC, most of whose members are operating at full production. On the demand side, the IEA anticipates even after some optimistic analysis of the IMF on the global economy, the demand will grow in 2016, with India to replace China as driver of oil consumption.
US markets closed with contained losses. A significant part of these losses is explained by the weakness of the oil sector (-1.26%). As anticipated, it was expected that the oil markets were particularly volatile due to the positioning of investors due to the meeting on Sunday in Doha. In this context, oil negotiated in New York closed with losses of 2.75%. Citigroup recorded a bending of 27% in quarterly EPS (compared to the same quarter of 2015) which stood at 1.10 USD. Revenues amounted to 17550 M.USD (-11.35%). Still, both items exceeded analysts’ estimates (EPS 1.03 USD and revenues M.USD 17460). The bank’s shares fell 0.13%. At the macroeconomic level, industrial production for the month of March has slowed, indicating that there is still some weakness in the manufacturing sector and energy industry. This indicator fell 0.60% from the previous month, compared to an expected decrease of 0.10%. On the other hand, consumer confidence, as measured by the confidence index of the University of Michigan stood at 89.7, below the 92.0 expected. Besides the reaction to crude behavior after yesterday’s meeting of oil producers, investors will monitor the progress of the earnings season that shall gain this week higher intensity. The positive reaction of stock markets to the results of major banks was due to successive downward revisions of analysts’ forecasts and the pessimistic expectations of investors in relation to the sector.
Asian markets ended lower, after the largest oil producers have not reached an agreement in Doha during the weekend. The energy sector was one of the worst performers. The Japanese stock market was affected by the appreciation of the yen, especially exporting companies, and negatively affecting sentiment were also the earthquakes on the island of Kyushu.