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 slightly lower. In this first session of the week, political events should dictate the direction of European stock exchanges. A month after the presidential elections that elected Emmanuel Macron as president, another ballot was held yesterday in France to choose the composition of Parliament. The movement behind Macron was the great winner of this first round, in elections marked by a strong abstention (with about 51%). According to the most recent projections, the Republican March movement gained 32%, at a distance of about 11 points from the Republicans (conservative right). The far-right National Front party of Marine Le Pen reached 14% of the vote. After yesterday’s results, these fears are expected to decline significantly. In Italy, the first round of local elections was held. Although these elections have a limited correlation with voting intentions in legislative elections, investors do not miss extrapolations. The specter of early elections has recently caused a sharp rise in Italian yields. With the events of this weekend, it is expected that there will be a decrease in Italian state yields. Meanwhile, in England, Theresa May’s Defense nominee denied that there was a Government agreement with the Northern Ireland unionists and removed a coalition scenario with that political force, underscoring the differences in some matters between the two parties. Faced with this apparent failure, Labor leader Corbyn has increased the pressure on Theresa May, arguing that he is capable of forming a governing coalition.
The US stock exchange closed in different directions, with the Dow Jones index being the only one closing on positive territory, both on Friday and on a weekly basis. This index reached a new intraday high and a new maximum at the end of the session. The session was marked by inter-sectoral rotation, with fund managers aggressively reducing their exposure to the technology sector (thereby making significant capital gains) and increasing their exposure to sectors that had recently suffered heavy devaluations such as Banking and oil companies, which have a substantial weight in the Dow Jones. The session was also marked by the strong volatility observed by some stocks, notably those of Amazon that fell 8% and later recovered and ended with a loss of around 3%. Some analysts have called this a “flash crash”, although it has not called into question the upward movement that has characterized the technology sector since the beginning of the year. Other companies in this industry that showed a similar trend were Apple, Advanced Micro Devices and Applied Materials. The Nasdaq Composite ended up reflecting this performance as, after reaching a new record high at the beginning of the session, it registered a temporary fall of 3.20% and closed down around 1.80%. According to the WSJ Market Data Group this was the biggest trend reversal since February 16, when it fell 3.65%.
Asian stock markets ended the session today with investors showing some caution after the results of the UK election and expectations of the Fed meeting scheduled for this week.