Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In pre-opening markets, European markets were trading lower, under pressure from geopolitical uncertainty, as investors await the business results and economic indicators that are being published. Theresa May’s decision to call for elections in early June surprised investors yesterday, who only expected the elections to be held in 2020, as previously advocated by the British Prime Minister. This decision could increase political uncertainty in Europe and is another obstacle that the rally of the markets of the Old Continent will have to overcome. In fact, these elections will follow the presidential elections in France (23 April and 7 May) and precede the parliamentary elections in France (11 and 18 June) and Germany (24 September).
The US market ended in a slump following the disappointing results released by Goldman Sachs and investors vigilant about tensions between the country and North Korea as well as the prospect of the presidential election in France. Goldman Sachs disappointed the market as it posted an 80 percent increase in first-quarter profit but fell short of analysts’ estimates. Gains in the investment banking area were offset by the drop in trading revenues. EPS hit 5.15 USD, below the expected 5.31 USD. This was the first quarter since 2015 in which Goldman Sachs’ results fell short of estimates and the first time since the first quarter last year that revenues were lower than forecasts. On the contrary, Bank of America reported its results for the first quarter of the year, which reached or surpassed practically all the items in the report. EPS stood at 0.41 USD, above the expected 0.35 USD, representing a 40% increase over the same period last year, while revenues reached 22,200 USD, up from 21,611 M.USD Financial margin was in line with the estimates. The bank also reported that the credit area grew 6% during the first three months of the year. In 2016, Bank of America shares rose more than 60%, boosted by higher interest rate outlooks and weaker US regulation. However, since the beginning of the year, the title only appreciated about 3%, having lost 9% last month. In turn, Johnson & Johnson also reported its results, which assumed a mixed character that drove its shares to a drop of more than 3%. In terms of economic indicators, industrial production increased by 0.50% in March, in line with estimates. In the real estate market, the start of construction of new single-family homes fell by 6.80% in March, while construction permits obtained increased by 3.60% in the same period.
Most of the Asian markets ended in negative territory, influenced by the fall of the producers of raw materials and of the financial sector. As with the other stock markets, investors are worried and expectant about tensions between the US and North Korea, as well as the approaching election in France.