Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets negotiated in negative territory. The reversal of the trend on Wall Street should weigh on European openness. In the Asian markets, oil continued the downward trend of yesterday, with modest losses (-0.20%). The oil sector and, to a lesser extent, the mining sector are expected to undergo initial selling pressure. The loss of momentum on the Nasdaq should also have negative implications for European technology actions. Yesterday after reaching 12953, the DAX receded.
US markets closed lower as oil weaker and cool the enthusiasm that had marked Friday’s session. Yesterday, oil declined 2.19%, with fears of a growing production to be exacerbated by the fact that Libyan production has reached its maximum since the fall of the Gaddafi regime. Another factor to justify yesterday’s decline was hedge fund sales especially when oil traded in New York broke $ 43 / barrel. If oil declines significantly then investors’ inflation expectations will be lower. This data, together with the slowdown shown by the US economy, has explained the yield drop in the US, as well as the conviction that the Fed will not significantly increase interest rates until the end of the year. The decline in yields has reduced the profitability of US banks, penalizing their shares that were the main engine of Trump Rally during the first quarter of 2017. Although the correlation between oil and Nasdaq is insignificant, The buyer’s enthusiasm buoyed up the recovery of this sector on Friday.
After a long wait, Chinese equities will finally be part of the MSCI Emerging Markets Index. Thus, 222 listed companies in China will integrate this index which is the benchmark for many international fund managers. It is important to note that China already had a weight (26%) in the MSCI Emerging Markets through companies listed on the Hong Kong stock exchange. Now this weight will increase to about 43%. The inclusion of Chinese equities implies that fund managers will have to acquire about 340,000 M.USD of Chinese equities, an effort that will be made in the coming years as the process of including Chinese companies in the MSCI index will be quite gradual in order to Turbulence in the market. The MSCI Emerging Market Index has an ETF that replicates it and is available for trading on our website. Despite this decision, the Chinese stock exchanges ended without major swings, while the other markets were negatively conditioned by Wall Street’s weakness.