Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes were traded with contained losses. A positive aspect of the rise of state yields, which has marked the last week, is that it has not spread to the companies dividend yield (even those with more speculative ratings). This is particularly relevant and deserves to be monitored in the coming time. The recent volatility resulting from the weakness of the bond market could suffer a further increase due to the expiration of futures and options contracts. The most critical moments are the time between 10h50 and 11h00 (futures and options expiration on Eurostoxx50) and 12h00 (futures and options on the DAX 30).
US markets closed with gains of more than 1%. Boosting US stocks were essentially four factors. The first is the oil recovery, which had a beneficial effect in the mining and oil sectors. The second is the good performance of the shares of Apple, which after an initial negative reaction to the presentation of the iPhone 7, has been rising, reaching a new high of the year. The third is more technical nature and relates to the fact that the American indices, with a view to short-term, are oversold. The fourth and last is related to the data reported that in view of some investors decrease the likelihood of the Fed raising interest rates at next week’s meeting. According to the Commerce Department, retail sales fell 0.30% in August, falling short of the anticipated zero growth by economists. If excluded cars, this indicator decreased by 0.10%, against forecasts of 0.30%. In the 2nd quarter, private consumption grew by 4.20%, which represented the main driver of GDP, which recorded an increase of only 1.10%. Industrial production declined 0.40% in August, a higher flexural 0.10% expected by economists. The Philadelphia Fed Manufacturing Survey rose from 1.0 to 12.8, although it is a highly volatile indicator. Regarding the labor market, the number of weekly unemployment benefit claims reached 260,000 in early September, 1000 above the previous week, but still close to the minimum level in decades. Economists estimated 265,000 applications for unemployment benefits. Today, as in Europe, will expire futures contracts and options called quadruple witching, which shall cause a much higher than average volatility and the occurrence of erratic movements. Nowadays, the most sensitive time 13h30 (opening) and 18h00. The day of expiration of options and futures is statistically positive for positive markets, and also considering the losses of recent days, it is not excluded a hypothetical recovery. Even if this move materializes, the technical situation of medium-term American markets remains delicate.
The major Asian indexes ended with some gains, with the exception of the Chinese markets which traded with contained losses. Today’s rise is of a technical nature and have not been a sign of the reversal of the negative trend. The rally today was in part fueled by the closure of selling positions with the caution from investors seeking to take a more neutral stance towards the Fed and the Bank of Japan meetings next week.