Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded with some losses, due to the weakness demonstrated by US stocks. Despite the recovery of crude oil in the Asian session is expected that oil shares negotiate under some pressure. Another is to monitor sector bank as it is more sensitive to the risk aversion of investors. In recent weeks there has been an anomaly in light of what has been the pattern in recent years. In fact, since the mid / late September which has seen a sharp increase in volatility in currency markets, bond and raw materials. However, contrary to what was recorded since 2009 that volatility does not spread to the equity market. The volatility of European and American markets remain close to the minimum of the year. However, it is unlikely that this exception will endure especially considering that October is statistically one of the volatile months. Therefore, volatility in the equity markets is expected to increase, increasing the uncertainty of the current situation.
US markets closed with sharp losses that were due to several factors. The first relates to the disappointing results from Alcoa. The world’s largest aluminum producer reported an adjusted quarterly EPS of 0.32 USD and revenue of 5210 M.USD. Both items fell short of analysts’ estimates pointing to an EPS of 0.35 and revenues of 5310 M.USD. On November 1st Alcoa its split into two publicly traded companies: Arconic (which will produce automobile parts, aircraft and spacecraft) and Alcoa Corp. (Which will continue to manufacture aluminum). In the bond market there has been a general rise in yields. This factor associated with the previously mentioned created some apprehension among investors. At this stage, the yields have gradually rise (breaking the downward trend of recent years) while corporate profits have been declining. A consequence of the rise in yields yesterday was the appreciation of the dollar which, in turn, negatively conditioned the price of oil (-1.02%). The technology sector was hit by the weakness of the biotech shares. Hillary Clinton has pointed out several criticisms of this sector and if she is elected President, with the House of Representatives under Democratic control, is quite likely that new laws and regulations are more restrictive for biotech companies. To the strength of the economy join the statements of several members of the Fed to defend, more or less vehemently, a rise in interest rates in December. Today the Governors of New-York and Chicago Fed will intervene in two different events and can express their opinion about the state of the economy and possibly on future decisions of the Central Bank. Furthermore there will be published the minutes of the last meeting which will give a clearer view of the degree of dissent within the Central Bank. Yesterday, the S & P broke the zone of support of 2140, which interrupts the sideways trend of the past few weeks, thus deteriorating the short-term technical situation.
The weakness of the American markets affected the Asian session. However, in the Forex Market, the yuan hit a new low of the last six years against the dollar. The weakness of the Chinese currency was the factor that led to the financial market turmoil in August 2015 and January this year.