Stock Markets – Daily Note – 31 Aug

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 with slight gains. Favoring the market is expected to be the closure of Wall Street and some Asian markets, as well as news that the US National Hurricane Center has reported that Hurricane Harvey has lost intensity and has turned into a tropical depression. However, the political sphere and macroeconomic scenario of the Eurozone will be two important points of the session. Today is the last day of the 3rd round of talks on Brexit, with investors waiting for some statement on developments concerning this issue. The publication of inflation in the Euro Zone will be one of the central points of the day, because of the impact it has on the common currency. Economists anticipate that price levels in August accelerated from 1.30% in July to 1.40% inflation, easing pressure on the ECB to normalize its monetary policy. In exchange terms, the higher the inflation, the greater the positive impact on the Euro. On the contrary, a lower reading of inflation may lead, with all other factors being equal, to a devaluation of the common currency. However, since August has a calming effect and a consequent decrease in volumes traded, the reaction of investors to a news or event is more pronounced as it is exacerbated by the lack of liquidity. If this is the case, the reaction of the exchange market to events or the publication of economic indicators (such as inflation) will be more extreme and, by reflection, their impact on the stock markets will be greater.

The US market ended up higher, with the S&P500 recording the fourth consecutive session of gains, favored by published economic indicators. The session was somewhat volatile as a result of developments in tensions between the US and North Korea, with the focus also being on Donald Trump’s speech on tax reform. With regard to economic indicators, according to the ADP employment report, 237 000 jobs were created in the private sector during August, significantly above the 185 000 estimated by economists. On the other hand, according to data presented today by the Department of Commerce, the growth of the US economy in the second quarter was revised upwards to the fastest pace of the last two years, due to an increase in the consumption of goods and services, Including car purchases. Thus, GDP in the second quarter increased 3% year-on-year, compared to 2.60% in the previous quarter and 2.70% in the first quarter, while consumer spending, which represents a large part of the economy, increased by 3.30%, Against 3.00% Expected), the highest increase since the second quarter of 2016 and after the 2.80% previously revised. In turn, annual inflation linked to GDP slowed from 2% in the first quarter to 1.60%. Some more relevant economic indicators will be published today, including incomes and household expenses for the month of July. Economists’ forecasts point to spending accelerating over the past month from 0.10 percent in June to 0.40 percent. Also the yields will have transmitted a positive signal, since they should have increased 0.40% in July, after having not changed in the previous month. It will also be important to monitor the publication of consumer inflation, since this is the Fed’s preferred inflation measure. Estimates indicate that this indicator (excluding the most volatile goods) registered a monthly increase of 0.10%. It should be recalled that at this point the prevailing view of the Fed is that the slowdown in inflation is explained by temporary factors, although the data for the coming months will prove to be important for measuring the timing of interest rate increases.

Asian markets ended in different directions. The Dollar extended gains against the Yen, peaking in about two weeks. Investors reacted to published data on the Chinese and Japanese economies. The PMI index for manufacturing activity in China rose to 51.70 in August, surpassing the estimates of 51.30, while the same indicator for services fell to 53.40, the lowest since May Of 2016. In Japan, industrial production fell 0.80% in July from the previous month, compared to forecasts of a decrease of only 0.50%.

Stock Markets – Daily Note – 30 Aug

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 on positive ground, as investors followed the stance on Wall Street and Asian markets. Attentions seem to be shifting away from the aggravation of geopolitical tensions to other issues, with developments related to Brexit. Today is the third day of negotiations between the UK and the European Union. In the business field, to highlight the results of the French Carrefour, so the retail sector should attract attention.

With the worsening geopolitical situation, the US market initially traded down, with investors opting for assets considered as a refuge. The tension between the United States and North Korea was high, after the Trump administration responded in a statement to the provocations made by Pyongyang with the launch of a missile that overflew Japan. The US government even went so far as to say that ” All the options are on the table “. In this sequence, the gold price reached the maximum since September 2016. Also in the debt market this feeling of uncertainty was felt, with yields of 10-year OTs retracted to the lowest since November 11, just days before the election By Donald Trump. However, the market was able to recover, with stock indexes ending with slight gains. In macroeconomic terms, the S & P Case-Shiller index, relative to house prices in the 20 largest metropolitan areas, rose by 5.65% in June, slightly above the 5.60% estimated by economists. On the other hand, the Consumer Confidence Index, reported by the Conference Board, stood at 122.9 in August, up from the expected 120.7. Meanwhile, as investors continue to assess the potential impact of Hurricane Harvey, particularly with regard to the effect on oil prices, inventories of this raw material by the US Department of Energy will be published today. The publication of the ADP employment report may also influence the opening of Wall Street. Regarding GDP for the second quarter, economists estimate that this indicator reflects an expansion of economic activity in the order of 2.70%, which includes an upward revision of private consumption to 3%.

As on Wall Street, Asian markets eventually recovered and ended slightly. Investors have again turned their attention to riskier assets, after yesterday their preference fell, as in other world markets, on assets of greater refuge, following the launch of the Korean ballistic missile on Japan. North.

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Stock Markets – Daily Note – 28 Aug

Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In pre-opening, European markets were trading slightly lower. The focus on this first day of the week should focus on the third round of the first phase of negotiations of the terms to effect Brexit, which should end on 31 August. At the same time, the behavior of oil prices will be another topic of the day. The sentiment remains uncertain after the latest news reports that Hurricane Harvey in the US, more specifically Texas, over the weekend has led to the temporary closure of some refineries. The volume of trading will be lower than usual, since the London Stock Exchange will be closed. Meanwhile, investors may now react to the intervention of Mario Draghi, President of the ECB, in Jackson Hole last Friday, as it only took place after the closing of the European stock markets. Draghi did not allude to the conduct of monetary policy, but made reference to the recovery of global economies, leading the Euro to the maximum level against the Dollar since January 2015. On the other hand, he said that protectionism policies could constitute a “serious risk” To the growth of the global economy, despite adding that the global economic recovery seems to be firm.

The US market ended higher on Friday. The day was marked by the Conference of Central Banks in Jackson Hole, but more specifically by the interventions of the Presidents of the FED, Janet Yellen, and the ECB, Mario Draghi. These speeches were long awaited, but neither offered any significant signal on the conduct of their respective monetary policies. Janet Yellen focused her speech on banking regulation and improvements in the US economy, while Mario Draghi focused more on his concern about protectionism. Thus, in the last session of last week, telecommunications and energy companies led the gains, while the technological and pharmaceutical sectors fell back. In terms of economic indicators, orders for durable goods during July registered the biggest drop in the last three years, thus reversing the strong increase observed in June (6.40%). This indicator showed a monthly decrease of 6.80%, due to the strong drop in aeronautical material orders. Still, forecasts predicted a decline of 6.90%. If we exclude transport orders, orders for durable goods increased by 0.50%.

Most markets closed on positive ground, although they showed some signs of less animosity as a result of recent news reports on Hurricane Harvey in the US and its implications on the price of oil, and with investors reacting to statements by the Presidents of Central Banks In Jackson Hole.

Stock Markets – Daily Note – 25 Aug

Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In pre-opening, equity markets were trading slighly higher. Today will be the Jackson Hole Central Bank Symposium, whose theme is related to the promotion of a dynamic global economy (“Fostering a Dynamic Global Economy”). The intervention of Janet Yellen is scheduled for 13h00, while the speech of Mario Draghi will only be heard at 18h00. Issues related to how to promote and improve economic growth will naturally be discussed, but certainly inflation will be one of the key themes of this conference. Today, optimism about strong global economic growth is counterbalanced by fears of current low levels of inflation that persist. US inflation fell to 1.40% in June (according to the Fed’s preferred average to calculate this indicator), while the consumer price index in the Euro Zone is currently at 1.30%, compared to the 2% target By both entities. The monetary policy outlook on both sides of the Atlantic is now focused on the gradual removal of the ECB’s current expansionary measures and on the normalization of the balance sheet by the FED, after the Central Bank has begun the cycle of rising interest rates. However, according to analysts, the words of the FED President will focus primarily on financial stability, while the intervention of the ECB President will have the theme of the conference as a backdrop, eventually disappointing who would be waiting for Draghi to send Some signal to the market about its monetary policy program and more specifically the start of tapering. To remember that it was in 2014 that in a presentation made during this conference that Mario Draghi promised to use “all available instruments necessary” to avoid a fall in inflation, thus setting the stage for an asset purchase program that followed in the footsteps of the Fed. Concerning the ECB, the minutes of the ECB meeting on 20 July last revealed that in recent months markets have been anticipating that the ECB, like the US Federal Reserve, will start its long monetary policy. At that meeting, in addition to having decided to maintain current benchmark interest rates, the ECB also chose to keep unchanged EUR 60 billion in monthly asset purchases. However, analysts and financial market players expect a tapering plan to be phased out in relation to the 7 September meeting. In the referred minutes, the concern of the heads of the Central Bank was also visible with the possibility of a significant appreciation of the Euro, which conditions the competitiveness of the region.

Stock Markets – Daily Note – 24 Aug

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 with slight gains. The focus will now be on the start of the Central Bank Symposium in Jackson Hole, whose theme is related to the promotion of a dynamic global economy (“Fostering a Dynamic Global Economy”). The “eyes will be on” in some speeches, but certainly the speeches of Janet Yellen, President of the US Federal Reserve, and Mario Draghi, President of the ECB, are the most awaited, with investors hoping to Words of these two officials responsible for some sign on the conduct of monetary policy on both sides of the Atlantic. These two interventions are only planned for tomorrow. In a speech delivered yesterday in Lindau, Germany, Mario Draghi gave no indication of the next steps in terms of monetary policy, only emphasizing that the recent financial crisis forced economists to readjust the existing economic models. Draghi advocated the independence of Central Banks to achieve better economic results and added that even after zero interest rates are set, Central Banks continue to have the weapons to maintain price stability, provided they are willing to use unconventional measures to Do it.

After the rally on Tuesday, the US market ended yesterday low, showing some nervousness, reflecting the prudence that investors have chosen to take in anticipation of the Jackson Hole Conference, as well as the latest words of Donald Trump. The event comes just weeks before the Fed’s next meeting scheduled for September 20, and its strong note comes as Ben Bernanke, the former Federal Reserve Chairman, announced during this conference important changes in the pace of its monetary policy . However, it is important to note that the impact of this meeting is often overestimated, so the Jackson Hole meeting can not be seen as the stage the Fed uses to explain its monetary policy. As it was pointed out, Donald Trump’s intervention on the construction of a wall on the Mexican border conditioned investors’ sentiment. With negotiations for the public debt limit approaching, Trump threatened to leave the Federal Government stalled if it could not secure funding for its plan to build a wall on the Mexican border, a centerpiece of its electoral campaign. The US Congress has until September 30 to approve a financing agreement, with Trump being able to veto a budget that does not include such resources for the wall, causing a possible shutdown of federal activities: automatic cuts that suspend some of the Normal functions of the federal government, which include the closing of services and the suspension of some employment contracts. In addition, Trump has admitted the possibility of ending NAFTA – the North American Free Trade Agreement – which involves Mexico and Canada. In terms of economic indicators, sales of new homes during the month of July decreased by 9.40% to 571 000, compared to a null change of 610 000. On the other hand, the Markit indices confirmed a good performance of economic activity: PMI rose from 54.60 in July to 56.00 in August, with the main thrust being from the services sector, which rose from 54.70 to 56.90, while manufacturing PMI fell from 53.30 to 52.50. In the commodities market, the price of oil reacted positively to the publication of the weekly inventories of this raw material, which showed a decrease of crude oil and gasoline reserves.

Asian stock markets ended in different directions. Despite the behavior of the markets were the political issues in the US as well as the expectations regarding the Jackson Hole Conference.

Stock Markets – Daily Note – 23 Aug

Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In pre-opening, European markets traded in different directions, after gains yesterday on both sides of the Atlantic. The expectation regarding the start of the Central Bank Symposium in Jakson Hole scheduled for tomorrow should be one of the main drivers of the session. In addition, Mario Draghi’s intervention in Lindau (Germany) will be closely monitored and may lead to some volatility in the markets. On the other hand, the price of oil will be a variable to monitor in today’s session. Before the opening of the European markets, the price of this raw material fell in the international markets, due to fears of an excessive supply triggered by the increase of production in Libya and the increase of inventories of gasoline in the USA released yesterday by the American Petroleum Institute. Today will be the turn of the US Department of Energy to present the weekly variations of oil and gas reserves in the US. The PMI indicators for the Euro Zone will be published today. The first estimate for the index of economic activity during the month of August should not show a relevant variation, and the same indicator for the manufacturing sector should have registered a decrease for the second consecutive month, while the one related to the services sector will have presented a slight increase.

The US market closed higher, and the lack of liquidity accentuated the movements of the main indices. The Dow Jones and S&P500 indexes posted the second day of gains, while the Nasdaq index overperformed and halted a three-day series of losses, such as the ETF Technology Select Sector SPDR. The Dow Jones had the highest gain since April 25, with shares of Caterpillar, Cisco Systems and Boeing leading the gains. With regard to the S&P500, the technology, pharmaceuticals and raw materials sectors were the main catalysts. This year has been very positive for the North American market, but this August the enthusiasm has faded: the S&P500 has accumulated an appreciation of about 9% since the beginning of the year, but in August it lost 0.70%. At yesterday’s session, buyer interest was renewed by expectations of compliance with the advanced tax reform by Donald Trump. In the business field, Macy’s has appreciated 4.56%, after announcing a restructuring that covers the reduction of 100 jobs but that implies a saving of 30 M.USD per year, as well as the hiring of the current vice president of eBay to America. In terms of economic indicators for today, sales of new houses are expected to be published for July, which should have remained unchanged from the previous month, in line with recent data on building confidence and investment in the sector of construction.

Asian markets closed without significant variations, thus not revealing the strength demonstrated by the North American (mainly technological) and European (supported by the gains from the mining sector). Investors are already starting to position themselves for the Central Bank Conference starting tomorrow in Jackson Hole.