Stock Markets – Daily Note – 07Apr

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 lower. Today’s session will be marked by growing geopolitical fears, after the US Defense Department announced that the United States launched a military offensive against Syria at dawn tonight. According to the statement, 59 missiles were fired at the air base from which it is suspected that the chemical attack was launched last Tuesday. On the other hand, the focus will also be on the Eurozone finance ministers meeting in Malta, whose dominant theme will be the situation in Greece, as well as the disclosure of the US employment report. The ECB considers that inflation still depends on the very expansive monetary policy. It should be recalled that in February, inflation in the Euro Zone was set at 2%, mainly due to the evolution of fuel prices, but slowed again to 1.50% in March. Yesterday Mario Draghi confirmed that the ECB will continue to buy public debt and By the end of the year or for a longer period, until the sustained inflation adjustment, whose target objective is 2%. The ECB has purchased debt securities from Eurozone countries at a rate of € 80,000 per month, but from this month until the end of the program (expected for the end of the year) the pace of 60 000 M. € per month.

The US stock market closed with slight gains, retreating from the highs reached during the session, after President Donal Trump has said that if China does not advance is willing to act alone in North Korea. In addition, Donald Trump and Treasury Secretary Rex Tillerson also said they intend to withdraw Bashar Assad’s power in Syria. Meanwhile, a meeting between the President of the United States and his Chinese counterpart has begun yesterday, and it will continue to attract attention. In terms of economic indicators, the number of weekly applications for unemployment benefits has fallen to 234 000, below the expected 250 000, confirming once again the current robustness of the labor market. The value of the previous week was revised upwards from 258 000 to 259 000 applications and the number forecast by analysts for last week’s figure stood at 250 000. Today the employment report for the month of March will be known today. Should again be positive, although it should underline a slowdown in the very consistent trend of job creation in the last year, with a monthly average reading above 200 000. After two extra months (with an average of 236 000 jobs Created for March, only 180 000 are expected, partly because of the difficulty of maintaining such behavior, but also because of the snowstorm that struck the east coast during the past month. April is a month marked by a seasonally negative period for American equities. By April 15, Americans will have to pay their IRS and many turn to the sale of shares or the rescue of investment funds to fund that charge. In the last 20 years, from the beginning of the month to that day, American markets have managed to achieve a positive return only 30% of the time. This is just an empirical data, does not mean that the American indices will repeat this pattern this year. The important thing to keep in mind is that in the next two weeks selling pressure can be seen.

US stock markets ended higher, influenced by rising oil prices and the depreciation of the Yen.