Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets traded without major fluctuations. Political developments in Italy will dominate the attention of investors. Yesterday, the President of the Republic Sergio Mattarella appointed Paolo Gentiloni as the future Prime Minister. To justify this choice are, among other arguments, the fact that he had a prominent position in the previous executive and of being a person with good relations with the different institutions of the European Union. This latter quality is particularly important considering that the first dossier that the new government will have to solve is the Monte dei Paschi di Siena issue. The solution through public intervention is the most likely from the investors’ point of view. Another theme of the day was the agreement that OPEC reached with some non-cartel producers. Thus, 11 producing countries decided to join OPEC and reduce production by 558 thousand barrels / day. The largest slice is taken over by Russia that will cut its daily output by 300,000 barrels.
US markets closed higher, with top indexes reaching new highs. Boosting stocks were essentially those sectors that had experienced an underperformance during the Trump Rally. These sectors include non-cyclical consumption and some more sensitive to interest rates such as real estate. This type of pattern is recurrent when the indices reach sharp gains in a reduced period of time, bringing the attention of institutional investors to the sectors that did not follow the upward movement in full. In macroeconomic terms, the upbeat sentiment that has cheered the stock market seems to be affecting American consumers. In the preliminary reading for December, consumer confidence as measured by the University of Michigan reached 98.0 against the 93.8 observed in November, peaking at the highest level since January 2015.
Most Asian markets closed higher, with the exception of Chinese stock exchanges. The Shanghai and Shenzhen markets were penalized by the regulator’s decision to limit the purchase of shares by insurers. In Japan, industrial machinery orders for October fell by 5.60%, prolonging the fall observed in September (-8.60%).