Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded without major fluctuations. The first few hours of trading should be influenced by the publication of economic data in China. After several months assigning a limited importance to Chinese economic data, European investors reacted sharply to the fall in imports and exports of the country, which were published last week. Thus, the most sensitive sectors of the Chinese economy (automotive, industrial, mining, luxury goods, etc.) should be among the most traded. The mining sector may also reflect the optimistic words of Billiton’s CEO, which anticipate an improvement in the commodity markets. The earnings season in Europe has already started though with a reduced intensity. Today, the Dutch ASML (which produces the machinery required for the production of chips and semiconductors) reported quarterly earnings below the estimate, although revenue and margin for the 4th quarter have exceeded projections.
US markets closed higher, reflecting the good business results and oil recovery. The latest published results (Netflix, Johnson & Johnson, UnitedHealth, etc.) contributed to alleviate the fears aroused by disappointing earnings from Alcoa and the failure, in terms of results of major banks (with the exception of Bank of America). Oil (quoted in New-York) continues to trade in a very volatile way but not descending significantly below 50 USD / barrel has been enough to give some support to its sector and more indirectly to the market as a whole. These good results overshadowed economic data, which seem to strengthen the arguments of those defending an increase in interest rates in December. Inflation measured by the consumer price index, rose 0.30% in September, the largest increase in the last 5 years. In annual terms, inflation stood at 2.20%. Excluding the more volatile items (such as energy and food), inflation reached 1.50%. The increase in inflation was supported on, rising of house prices, rising of rental rates and air fares. In 2016, inflation measured by consumer prices has remained above 2%. It should be emphasized that the preferred measure of home inflation for the Central Bank is the price basket associated with household consumption, which currently stands at 1.70%, below the 2% desired by the Fed. In the early hours of tomorrow will be held the final debate between Hillary Clinton and Donald Trump. The preference of the markets is by a divided Congress, where one party controls the Senate and the other the House of Representatives. It is recalled that in November, in addition to vote the new President people will also choose 435 new congressmen and 34 of 100 senators.
Asian markets closed without major fluctuations, despite the publication of important economic indicators in China. In the 3rd quarter, the 2nd largest economy grew 6.70%, in line with the estimated and registered in the 2nd quarter. This variation also falls within the growth target of the Beijing government: an increase in GDP between 6.50% and 7%. Boosting GDP was essentially the increase of state investment and the recovery of the housing market, the latter factor result of the huge amount of liquidity injected into the economy. The negative highlights were exports. Today was also published industrial production relative to September, which showed a lower than expected increase (6.10% vs 6.40%). For its part, retail sales exceeded estimates (10.70% vs. 10.60%) and investment was inline with the expected (8.20%), although the latter have significantly depended on public enterprises, which are not always the most efficient.