Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European shares traded lower. In the first phase of the session, the banking and oil sectors should be highlighted. UBS fell by 60% in its net profit, which reached 827 M.CHF, short of the 945 M.CHF estimated. The bank’s results were penalized by the fall of 21% of revenues from the asset management unit, an area where the bank has invested substantial resources. The bank CEO, Sergio Ermotti warned of the various political risks hovering on the horizon. The Royal Bank of Scotland reported a loss of 469 M.£, which was due to the payment of a fine of 894 M.£ linked to a judicial decision. Earnings Before Interest & Tax reached 1330 M.£, exceeding forecasts. BNP Paribas also beat estimates, achieving a profit of 1890 M € (+ 3.30% than last year). After the pressure of recent days, oil stocks can stage a comeback, at least in the early hours of trading. Total reported a drop of 25% of profits, but still exceeded forecasts. Today the sensitivity of oil to news and rumors will be even greater because of the informal meeting between representatives of Russia and OPEC, which should start to discuss and outline the first details on the agreed production cut at the cartel meeting in September .
US shares closed lower. The rise in yields and the consequent appreciation of the dollar originated a selling pressure in the most sensitive sectors to interest rates such as the utilities and real estate. Another sector quite permeable to the trend in yields, the telecommunications sector, ended in high but such behavior is also explained by the animation generated by the acquisition of Time Warner by AT & T. Underpinning the market were business results. Yesterday, the earnings season reached its mid-point, as 50% of the constituents of the S & P already submitted its quarterly accounts. Until yesterday, about 73% of companies surpassed analysts’ forecasts and about 61% did the same concerning revenues. These percentages exceed the average of recent years, when about 65% of profits and 52% of business revenues were higher than estimated. The recovery of oil also avoided more significant losses. In terms of economic indicators, the number of weekly applications for unemployment benefits fell by 3,000 to 258,000, against estimates of 255,000. Orders for durable goods in September month decreased 0.10% compared to expectations of a maintenance. Excluding transport sales, this indicator recorded an increase of 0.20%, in line with the estimated. Regarding the real estate market, real estate Purchase and Sale Agreements increased by 1.50% above the 1% anticipated. Today the opening trend will be dictated by the publication of GDP for the 3rd quarter and the results of two symbols of the American oil industry: Chevron and Exxon Mobil. After a inauspicious year start, the US economy grew only 1.40% in the 2nd quarter, delaying the expected recovery for the second half of 2016. Economists anticipate that the GDP grew 2.50% in the 3rd quarter of the year, once again grounded in domestic consumption in the first part of the year which prevented GDP growth had been more anemic. This line should show a slight slowdown from the previous quarter but will be offset by higher investment and lower trade deficit. For the oil sector, the analysts expect, on average, a drop of 73.10% of EPS compared to the same quarter of 2015 and 14.80% decline in revenues. More relevant than the results from Exxon Mobil and Chevron are the prospects that the CEO will give not only on future quarters as well as the recent rise in oil.
Asian markets closed mostly lower, penalized by the banking sector. The only exception was the Tokyo exchange, which benefited from the appreciation of the Dollar against the Yen. The Dollar broke the psychological level of 105, which triggered a series of purchases by automated trading programs.