Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices presented some gains. The first hour of trading should be marked by the reaction of investors to the different results that were published before the opening. As mentioned earlier this week, the most relevant results at this stage are from banks. Deutsche Bank reported a drop of 90% in quarterly earnings, which amounted to 18 M € compared to 796 M € in the same period of 2015. On average, analysts estimated profit of 22 M € but the range of these estimates were quite diverse ranging from a score of 584 M. € and a loss of 1 180 M. €. The results of the Deutsche Bank were penalized by the sharp drop in trading revenues, the restructuring program and the high legal costs related to the processes in which the bank was involved. Santander announced a quarterly profit of 1280 M € which slightly exceeded the 1220 M € expected. However, the English unit of Santander, which is a major source of income, fell by 28% of its activity. Investors will also react to the results of other sectors.
US markets closed without major fluctuations, prolonging the consolidation of the past few days. The volatility of the main indices was reduced despite the publication of quarterly accounts of several companies and the release of some economic data. In general, the results of S&P components continue to outperform analysts’ forecasts. 3M reported earnings slightly higher than estimated but sales fell short of the anticipated. In addition, 3M reduced its revenue projections for this year. Caterpillar reported earnings and revenue that exceeded estimates although he acknowledged that continues to find difficulties regarding the orders of the mining sector. United Technologies, an industrial conglomerate not only reported higher profits and revenues to expected as improved its results projections for this year. To notice the sharp drop in shares of McDonald’s (-4.47%) after the company announced an increase of only 1.80% in US sales. Macroeconomic data has assumed a secondary role in recent weeks but the release of today’s meeting of the Fed may return them some relevance. The real estate market continues to demonstrate that it is one of the most dynamic areas of the US economy. In June, sales of new homes rose to 592,000 units (annualized number), thus reaching the highest level since February 2008. The median price of new house amounted to 306 700 USD. Another way to measure the price of real estate is through the S & P / Shiller, which uses the prices in the 20 largest metropolitan areas of the country. In May, this index increased 5.20% over the same period of 2015. Consumer confidence remained relatively stable in July, reaching 97.3 compared to the 97.4 observed in June, against the predictions of economists which pointed to a decline up to 95.5 . The meeting of the Fed will be the main event of the day. Economists and investors do not expect the central bank to change interest rates at this meeting. Not being scheduled no press conference or updating the macroeconomic projections of the institution, the main point of the meeting will be the statement it self. Considering the positive economic data for the consume, the real estate market and more recently with regard to employment, it is not excluded that the Fed make a more optimistic description of the US economy. However, the statement should be characterized also by a more cautious tone with regard to the international environment.
The major Asian indexes closed lower, especially the Shangai composite which was losing almost 2.50% at 7:15 am. The only exception was the Nikkei. The Japanese stock market continues to fluctuate according to the rumors about the amount of the tax plan incentive that the Abe government promised. Yesterday, the press pointed to 57000 M.USD this morning circulated news that indicated an amount of 254000 M.USD.