Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European markets were trading higher after Wall Street’s new highs and investors waiting for economic indicators and business results to be released. The good performance of the US indices has had a much more timid reflection on the European markets. While new record highs have been reached on Wall Street, the vast majority of the Old Continent’s indexes have not been able to surpass the highs reached in December 2016. The only exception is the DAX. Although the German index shows an underperformance vis-à-vis its US counterparts, the DAX managed to break the December high, contrary to other European markets. Contributing to this good performance was the DAX’s greater sensitivity to the weakness of the Euro and to the good performance of the pharmaceutical and utilities sectors in recent weeks (well represented in the DAX), also due to the fact that the German market is considered in the European context, as a Refuge in the face of the uncertainty in the political scenario and finally the fact that the German economy continues to be one of the most dynamic within the Eurozone, as the most recent PMI reading of January confirmed. Today will be filled by a number of economic indicators, of which inflation in the Euro Zone stands out during the month of January. According to estimates, this indicator will have accelerated from 1.10% to 1.80%, due to a favorable statistical effect due to the fact that in January 2016 (base period) oil has reached a minimum.
After closing on Monday, the US market began the week with renewed historic highs on the part of major stock indexes. The day was essentially marked by the presentation of results from two large retailers. Home Depot rose more than 1%, after having presented results above the estimates, in addition to raising its dividend and announcing a program of repurchase of own shares in the amount of 15,000 M.USD. In turn, Wal-Mart advanced 3.09%, after having presented a profit that surpassed the forecasts (EPS 1.30 USD vs 1.29 USD) and future perspectives in line with the estimates. The retailer also increased its dividend by 2% to 2.04 USD per share. Oil has shown an upward trajectory in international markets. At stake were statements by OPEC Secretary General Mohammad Barkindo, who predicts a fall in oil inventories this year. In addition, Mohammad Barkindo reported that January production data from the most recent monthly report show compliance by countries that have agreed to cut production above 90%. Last Thursday, the American indexes reached the remarkable series of 7 consecutive positive sessions. This series proves that the recent rally, started after the November presidential election, resembled an almost vertical line. As a matter of curiosity, the largest series of consecutive positive sessions occurred between March and April of 1971, which resulted in 14 positive sessions, which anticipated for a few days a correction of 15% that lasted until November of that year. Today’s focus will be on the publication of the minutes of the last Fed meeting, as well as on sales of used homes, which are expected to have increased in January after a significant decline in December. At the last meeting of the Fed, the Federal Reserve opted to leave interest rates unchanged without giving any indication of the timing of the normalization of monetary policy, that is, of rising interest rates.
Asian markets ended with contained variations in face of continued uncertainty over Donald Trump’s policies. Shares of Toshiba rose 22% following news that the company has appealed to potential buyers of its chip unit, to evaluate it at least for 17600 M.USD.