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 Italian market should be highlighted because of Fitch’s decision and the presentation of Monte dei Paschi di Siena’s recapitalization plan. On Friday, Fitch lowered the outlook of Italian debt to negative, due to the political uncertainty coupled with modest economic prospects and high public debt. Political risk relates to the referendum proposed by Renzi Government related to a series of constitutional and institutional changes. By threatening to resign if these proposals were reproved, Matteo Renzi turned this referendum in a kind of vote of confidence to his government. So, if this initiative is not successful and is accompanied by his resignation, Italy could go through a period of high political uncertainty. The referendum will be held on 4 December. The behavior of Italian banks can influence the behavior of the Spanish and German pairs in a week in which many European banks will publish their quarterly accounts.
US shares closed without major fluctuations in a session dominated by business factors. Concerning the earnings season, the highlights were the results Microsoft and General Electric. Microsoft reported earnings and revenues higher than estimated, driving its shares to gains of 4.21%. General Electric, the world’s largest conglomerate, reported profits higher than estimated but revenues disappointed investors and forced the holding to reduce their projections. In fact, the EPS for the 3rd quarter amounted to 32 USD (+ 10% over the same period of 2015), exceeding the forecast of 0.30 USD. Revenues amounted to 29270 M.USD (4.40 +%). However, the organic recipes, ie excluding the revenue generated by the growth acquisitions increased by only 1% in the quarter, less than 2% – 4% projected by the company to 2016. The results of GE, together with disappointing numbers from Honeywell increased the fears of investors regarding the industrial sector. The merger between Time Warner and A & T was another event that marked the session. If this operation goes ahead will result in a company with a market capitalization of about 75000 M.USD. US investors will follow the publication of quarterly results before the opening as well as the various interventions of the Fed members scheduled for today.
Asian markets closed higher, emphasizing the good economic data in Japan and the good performance of Chinese markets, which benefited from special factors. In Japan, the PMI manufacturing activity index reached the maximum of the last 7 months, while exports fell less than estimated (-6.90% vs. -10.40%).