Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the indices of the Old Continent rehearsed with modest gains. The volumes are expected to be below average due to the holiday in Germany. Today, the German stock exchange will be closed, celebrating the “Unification Day”. On 3 October 1990 the German Democratic Republic was unified with the Federal Republic of Germany. The good performance of the US banking sector is expected to have a positive impact on its European counterparts. The reason for this performance is the same: the generalized rise in yields on both sides of the Atlantic. In the European case, this factor is compounded by economic growth higher than that estimated by economists, the higher demand for credit from this growth and the decrease in bad credit. The retreat of oil in the American and Asian markets could induce an underperformance of the respective sector.
US markets closed higher, with the Dow Jones, S&P and Nasdaq Composite reaching new highs. The volume was lower than the average observed in September. When an index reaches a new high, it usually attracts the buyer interest of several (mostly private) investors, stimulated by the coverage that this feat generates. This buyer interest manifests itself in two ways: through the direct purchase of shares and the subscription of funds. At the present stage, subscriptions are not meeting this standard. In fact, in the last two weeks it was observed the redemption of stock funds, in the amount of 10 500 M.USD. Economic data also contributed to positive sentiment without generating any apprehension about inflation and interest rates. The Institute of Supply Management (ISM) index, which measures industrial activity in the US, reached 60.8 in September, comfortably surpassing 57.5. Among the various components of this index, prices are currently one of the most closely monitored. The price level increased from 63.0 to 71.5. The ISM index is one of the tools most used by fund managers and economists when analyzing the US economy. Investment in construction increased by 0.50% in August, with the states of Florida and Texas not having been hit by the passage of several hurricanes. Yesterday, two members of the Fed said that the Central Bank should adopt a patient stance and should wait for inflation to reach the 2% target before raising the benchmark rate again.
With Chinese and Korean markets closed, other Asian stock markets closed higher. Good economic data in China and Japan as well as good Wall Street performance have contributed to a positive sentiment among Asian investors.