Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded without major fluctuations. In recent weeks they are growing risks that hang over financial markets, so some caution is recommended. According to the latest survey by Merrill Lynch Bank of America, this caution is shared by most fund managers who were questioned. At this stage, the greatest risks to these managers are the situation of the Chinese economy (which the observed slowdown adds to an increase in debt) and the possibility of an exit of UK from the EU. The allocation to the financial markets of the latter country is the lowest since the crisis of 2008. In this context, the liquidity in the portfolios held is the largest in recent years. This data is generally positive because it means that if general conditions improve and equity markets recover managers have funds to allocate to these markets. However, given the large amount of redemptions that many equity funds have suffered during this year (90000 M.USD according to the Financial Times, the highest rate since 2011), the accumulated liquidity by managers can be used to meet these redemptions. Most investors surveyed by Merrill Lynch has less exposure than its benchmark for equity markets, a particularly significant pattern in the mining and industrial sector. The banking sector is one of the few where the exposure of most managers is higher than its benchmark.
US markets closed with modest gains, but the rise was cross the 10 sectors that make up the S & P. A part of the increase is explained by the closure of selling positions that had been made on the eve of investors who use technical and mathematical algorithms, when the S & P momentarily broke the support of 2033. With the opening on Friday, these investors realized that the breaking of the support had not been validated and thus ended the selling positions, thus contributing to the rally of US indices. After a few weeks under selling pressure, several technological stocks (including Apple) have attracted the interest of some buyers. At the macroeconomic level, used home sales rose in April for the second consecutive month: this indicator grew by 1.70% to an annual rate of 5.45 million (annualized number). Economists expected a 1.30% increase for the 5:40 million homes sold. The housing market has been one of the parts of the American economy more resilient to the slowdown in other sectors of this economy. We should also add the results of Deere, one of the largest global producers of agricultural and construction equipment. Despite having surpassed analysts’ forecasts (both in terms of profits in terms of revenue), Deere proved somewhat pessimistic about the future of these two sectors worldwide. The company’s shares fell 5.50%. Today begins one week quite intense in terms of interventions of members of the Fed. After the publication of the minutes of the last meeting of the Fed, investors will find out whether the position of the various members of the Fed remain. In fact, the meeting was held on 26 and 27 April, before they were published a series of economic data which pointed to a slowdown in the US economy. For today are scheduled interventions of Governors of the Federal Reserve of St. Louis, San Francisco and Philadelphia.
Asian indices closed without major fluctuations. Shanghai and Hong Kong exchanges closed with some gains, while the Nikkei closed with losses close 0.50%. The Japanese index continues to depend essentially on the evolution of the yen, which during the Asian session gained some ground to the dollar and the yen.