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. The day should be essentially marked by investors’ reaction to the published results, at a time when the positive effects of the election results in France are still felt, reinforcing a scenario of greater confidence in the stability of the Eurozone. At the same time, on both sides of the Atlantic, expectations about a possible announcement by Donald Trump about the tax reform are rising. Regarding the Earnings Season, the results of Banco Santander were known, with net income for the first quarter reaching 1870 M. €, above the estimated 1730 M. €, with the Core Tier 1 (fully-loaded) ratio increasing From 10.55% in December to 10.66%. The Bank reported that net income increased in 9 of its top 10 markets. In turn, Credit Suisse announced a capital increase of about 4,000 M.CHF and reported that it abandoned plans to disperse a minority stake in the Swiss bank unit. The bank reported a net profit of 596 M.CHF for the first quarter. In the automotive sector, Daimler has raised its outlook for annual profit after its net profit for the first quarter has doubled to € 2710 M. (EPS of € 2.53, up from € 2.22 expected). Peugeot reported that Peugeot’s revenues grew 4.90% in the first quarter to 13600 M. €, as sales of new cars with higher margin helped offset the exchange pressure. Attention will also be focused on the accounts for the first three months of the year from Deutsche Bank, Bayer, Basf and GlaxoSmithKline.
The business results released and the reflection of the French elections allowed a positive closure to the North American market. The Nasdaq Composite index broke the 6,000-point barrier for the first time, 40 percent of which is influenced by five major companies (Amazon, Facebook, Netflix, Alphabet and Apple). In turn, the Dow Jones has temporarily outperformed 21,000 points, with Caterpillar and McDonald’s being the biggest catalyst for gains. In the S & P500 index, commodity producers led the valuations. Caterpillar reported EPS of 1.28 USD and sales of 9822 M.USD, compared to forecasts of USD 0.62 and USD 9271, respectively. McDonald’s posted an EPS of 1.47 USD (vs. 1.33 USD expected) and revenues of 5680 M.USD (vs. 5530 M.USD forecast). 3M showed EPS of USD 2.16 and revenues of USD 7685, compared to USD 2.06 and USD 7472 expected. In recent sessions, the price of oil has been penalized by increased production in the US. Today, the US Department of Energy will unveil the weekly inventories of oil and gasoline. In terms of economic indicators, the S & P Case-Shiller house price index rose 5.80% in February, above the expected 5.70%. Still on the real estate market, sales of new homes increased 5.80% to 621,000 in March, a level higher than predicted. On the other hand, the consumer confidence index stood at 120.3 in April. However, after weeks of delays, President Donald Trump is expected to announce a tax reform that, according to administration sources, may include a cut in corporate income tax to 15 percent, from the current 35 percent.
Asian markets ended on a positive note following gains on Wall Street as a result of public results and expectations of a possible US tax reform announcement.