Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European stocks traded without a defined trend. European investors will focus on two themes: oil behavior and the Italian banking sector. One operation that investors will closely monitor is the conversion of 4300 M. € from Monte dei Paschi di Siena bonds into shares. This operation is part of the bank’s recapitalization process. Monte dei Paschi di Siena intends to increase capital by 5000 M. €, a condition sine qua non for the bank to sell 28000 M. € of bad credit. Before making the capital increase, the bank proposed that a portion of its bondholders convert bonds into shares of the bank. The greater the adherence to the conversion of bonds, the lower the capital increase that will follow. The debt-to-equity swap ends on Friday and could be a good barometer on investor sentiment over Italian banks. The capital increase starts on the 7th or 8th of December.
US markets closed at modest losses but were enough to be considered the biggest since election day. The session was relatively quiet, with the volume well below average. The main themes of the session were the strong uncertainty over the OPEC meeting and the sales of the holiday season. After the optimism that prevailed for much of last week, the approach of tomorrow’s meeting is fraught with uncertainty and pessimism. The holiday season continues to show signs of dynamism. According to Adobe Digital Insights, Cyber Monday sales increased by 9.40% compared to the same day in 2015. Cyber Monday’s sales vary from estimate to estimate but most point to a significant increase over the previous year. The importance of the shopping season as the barometer of the economy might be a bit smaller this year. The reason for this view is that not only has the economy been showing steady signs of acceleration in the past two months as investors are placing great hope in the next administration’s economic policy. In previous years, the shopping season was preceded by a number of uncertainties, so investors were trying to gauge through the holiday sales the dynamism of the American consumer, which is the engine of the economy. Today, interventions by two Fed members, William Dudley and Jerome Powell, are scheduled at 1:15 p.m. and 5:40 p.m. Markets will attach greater importance to the intervention of the second member, as William Dudley will focus primarily on the Puerto Rican economy. With money markets giving a near-100 percent probability to a December interest rate hike, investors will look in Fed’s words for clues about the pace of the cycle of key interest rate increases in 2017.
Asian markets closed with contained losses. The session was relatively quiet, with few points to report. In Japan, household spending declined 0.40% in October, a decline lower than the expected 0.60%. However, this variation is further evidence that the Japanese economy is slowing and the effects of the economic and monetary stimulus adopted in previous years seem to be dissipating. The Korean stock exchange continues to wobble according to the developments around President Park Geun-hye, whose most influential adviser is the protagonist of some irregularities.