Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices were trading higher, reflecting the recovery in US equities after the European closing and economic data in China. The mining and oil sectors should stand out, which yesterday were shaken by the negative signals given by Chinese imports and exports. In the Asian session, oil was recovering, managing to boost the price of other industrial commodities. Another highlight could be the car sector that will reflect the disclosure of the sale of vehicles in Europe. Technically, in the DAX indice, the levels to be monitored are the 10350 (support) and 10503 (resistance).
American markets closed with contained losses, after having registered at the beginning of the day decreases of more than 1%. At a time when beginning to emerge some fears related to business results, economic data on China exacerbated the nervousness of investors. Yesterday, it was published that the exports from that country fell 10% and imports 1.90%. In addition to several companies, like Apple, China is the second most relevant market only preceded by the USA. Later, the fall of the dollar (the largest in the last month) and the rise in yields managed to sustain the equity markets. In recent weeks, the strength of the dollar has been pointed out by many CEO as the main cause of the fragility of the business results. On Wednesday’s daily note it was reported that the breakdown of S & P’s support in 2140 deteriorated the situation of short-term US index. Since then, after falls the S & P is faced now with a more relevant support area formed by the 2116. If this level is broken then this sign of weakness can cause some nervousness among investors. Today begins the earnings season in the banking sector with the publication of quarterly accounts at JP Morgan, Citigroup and Wells Fargo. In general, the activity of the sector should have benefited from the expansion of granting real estate loans and consumer credit as well as the improvement of trading activity after a beginning of a busy year. In the last quarter there was also an increase in the differential between long-term interest rates and short-term ones, which have a positive impact on net interest income. On the negative side, most banks will charge a pushup in lending to companies. Since the end of the 2nd quarter, the bank shares appreciated by 20%, so a part of the positive factors may have already been discounted by the market. In the case of Wells Fargo, more important than results are the statements and the possible measures that the institution will adopt to overcome the scandal of creating false accounts. In addition to the results of the banking sector, investors will closely monitor the intervention Janet Yellen at a conference organized by the Boston Fed (17:30). After the publication on Wednesday of the minutes of the last meeting of the Central Bank (which described a division within this institution), investors will follow every word of the President. Probably the statements of Janet Yellen, should fall within the statement of the last meeting, arguing that the economy continues to expand and that remaining so could justify an increase in interest rates.
Asian markets closed without a definite trend, without the risk aversion that characterized the European and American sessions yesterday. This was essentially due to the following factors: The first was the Wall Street recovery at the end of the session. The second was the publication of inflation in China. In September, the price levels increased 1.90% more than the 1.60% forecast. The increase in inflation may be signaling some recovery in economic activity, particularly consumption. This fact mitigates the fears aroused by last fall in imports and exports.