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. In the current global uncertainty scenario, which concerns fears of political-military differences between the US and North Korea, as well as the expectations surrounding the presidential election in France on Sunday, investors follow the business results that are being disclosed in Europe and in USA. US Secretary of State Rex Tillerson said yesterday that the US admits the possibility of putting North Korea back on the list of terrorist sponsors, from which the Pyongyang regime came out in 2008. The press also reported that Rex Tillerson will lead a Security Council meeting on North Korea’s nuclear program on April 28. In the business field, Unilever reported a 6.10% increase in its sales for the first quarter of the year to 13300 M. €, above the 12500 M. € recorded in the same period last year, due to the increase in its prices. If we remove the impact of exchange rate volatility, sales increased 2.90%, thus exceeding estimates of a 2% growth. On the other hand, Rio Tinto reported that iron production in Australia decreased by 3% over the same period last year due to the weather conditions that affected its mines. However, despite the fall in iron prices, the company maintained its outlook in annual terms.
The US market was yesterday pressured by IBM’s results and falling oil prices. The Dow Jones and S & P500 indexes ended negative. Among the 11 sectors of activity represented in the S & P500, 7 finished lower, with the financial sector ending up 0.30%, despite having managed to lead gains during the session, due to the results of Morgan Stanley. For the 20th consecutive quarter, IBM announced a 2.80% decline in first quarter turnover over the same period of 2016 to 18,000 M.USD (vs. 18,400 M.USD expected) due to weak demand for connected services Information technologies. The recurring EPS reached USD 2.38, above the forecast USD 2.35. Stocks fell 4.96%. In turn, the financial sector was positively influenced by the higher-than-expected results released by Morgan Stanley. The fall in the price of oil penalized its sector and the market as a whole after the Energy Department revealed that oil inventories fell by 1.03 million barrels last week, in line with expectations. Gasoline reserves increased by 1.5 million barrels, compared to an estimated drop of 1.6 million barrels. Meanwhile, the Federal Reserve has unveiled its Beige Book, in which it announced that the country’s growth was “modest to moderate” between mid-February and the end of March. This report, published eight times a year, agregating data from 12 Delegations of the Federal Reserve, mention a general improvement in national economic indicators, with consumers spending more and retail sales and car sales going up moderately. The tourism and energy sectors are also stronger. However, the report notes that entrepreneurs have been less optimistic about the short-term outlook compared to the previous Beige Book. As far as inflation is concerned, it was modest, with prices rising “only slightly”, according to the same document.
Asian markets ended with modest gains as investors reacted to corporate earnings on Wall Street and after the price of oil rebounded from the low seen in the last two weeks, explained by the release of inventories of this raw material in the US. At the same time, tensions between the US and the Korean Peninsula continue to influence investors’ sentiment.