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. Conditioning the European opening should be the weakness of Oil in the Asian and American sessions, as well as Wall Street’s inability to recover after Tuesday’s losses. Oil was negatively conditioned by the statements of the General Secretary of OPEC, the publication of the cartel’s production and the strength of the dollar. Yesterday, the General Secretary of OPEC Mohammed Barkindo said in an interview that has not yet been decided whether this organization and the countries that are not members will make a cut in production simultaneously. Today, the cartel said its production is at record levels. A potential weakness of the oil sector is expected to spread in to the mining sector, as the recent good performance of crude had served as a catalyst for other industrial commodities.
US markets closed with contained variations. After the fall of the previous day, investors were particularly cautious, not taking advantage of the decline from the previous session to increase exposure to equity markets. The session had essentially two issues: the future of monetary policy and the earnings season. The minutes of the last meeting of the Fed described a unusual division within the Central Bank. In fact, three members of the executive committee voted against the maintenance of interest rates, currently at 0.25% -0.50%. Such a deep division was observed five times in the last three decades. Dissenting members advocated a rise in interest rates, arguing that the later the Fed start increasing interest rates of less gradual and steeper will be the pace of increases. The earnings season continues to be marked by negative auspices, which in turn are gradually generating some apprehension among investors. The technology sector was shaken by the situation of Samsung (which announced that it will stop marketing the Galaxy Note 7) and the profit warning from Ericsson (the company not only reduced their projections for profits as was pessimistic about the future of this market). Several US technology companies such as Cisco and Juniper are suppliers of components for mobile phones from Samsung and Ericsson. Today, investors will prepare for tomorrow’s publication of the results of several banks, they will also observe the evolution of state yields (which continue to trade close to the maximum this year) and the disclosure of EIA Crude Oil stockpiles report. In addition to the traditional influence it has on the stock market, oil behavior provides signals about the future of their sector, whose profits are expected to have fallen 69% in the 3rd quarter.
Asian markets closed lower, with the exception (oddly enough) of the Shanghai stock exchange, due to the disappointing data of the Chinese economy. In September, exports from this country fell 10% and imports 1.90%. Both items were below estimated. These figures besides having a negative impact on GDP (as the trade balance recorded a deficit this month) indicate a weakness in external demand (lower exports) as well as lower domestic demand (decrease in imports). The fact that the Shanghai Stock Exchange have valued can be explained by the fact that these signs of weakness can influence the Beijing authorities to adopt new measures to stimulate the economy.