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 negociated slightly higher. The opening was marked by the absence of relevant news. Looking back, 2016 is marked by the valuation of the most risky assets, in a scenario of a certain optimism regarding the whole global environment. In fact, stock indices in the US recorded significant appreciations (S & P rose about 10%, Dow Jones 13.74% and Nasdaq100 7.08%), while in Europe DAX gained 6.59%. In the commodities market, these positive prospects for supply and demand were also mirrored: the price of oil surpassed 50 USD/barrel. US 10-year bond yields were close to 2.50 percent for the first time since June 2015 and German 10-year bonds since October have begun a positive recovery. However, the year that ends tomorrow has ended up with world growth that has not changed much from that of previous years. Thus, there are still some challenges for investors in 2017, such as the developments in relation to Brexit, the political situation in Europe (elections are scheduled in the Netherlands, France and Germany), the situation in the banking sector, notably in Italy, as well as the Chinese economy, which is in a process of transformation, among others. In the energy market, in 2016, the price of crude goes to record the first appreciation in three years. Supply remains above demand, although OPEC has achieved a reduction of production agreement in most of the countries belonging to the organization.
The US market closed lower in a session of weak liquidity as investors outlined prospects for the new year that is about to begin. In recent sessions, the expectation that the Dow Jones could reach the 20000 barrier was one of the characteristics of the market, but with the recent performance of the index, the Dow Jones seems more likely to record the first weekly decline since the period before Elections. Even so, until yesterday the appreciation since the beginning of the year was higher than 13%. In sectoral terms, gains from utilities contrasted with losses in financial sector stocks. In terms of economic indicators, the number of weekly applications for unemployment benefits decreased by 10,000 to 265,000, a level in line with expectations. This was the 95th consecutive week in which this indicator was below 300,000. The price of oil fell after the Energy Department reported that crude inventories rose for the second week, contrary to expectations. The increase was 641,000 barrels, compared to an estimated fall of 1,266 million barrels. Gasoline inventories fell by 1,593 million barrels, compared to an expected increase of 155,560 barrels. During the session yesterday it was reported that the US government has approved a package of sanctions against Russia following the accusation of Moscow’s interference in the US elections. However, this announcement did not significantly interfere with the market. According to most analysts, in 2017, the US performance will be conditioned, among other factors, by the expectations surrounding the economic plan of Trump, which seems to be based on infrastructure investment, tax expansion and regulation relief. The more traditional sectors should benefit the most, including the mining industry and financial services.
On this last trading day of the year, changes in Asian stock indexes were contained. In annual terms, the Nikkei ends with a slight appreciation of 0.43%, while the Shanghai index ends 2016 with a devaluation of more than 12%.