Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices rehearsed with limited gains. The start of the session should be relatively quiet due to the scarcity of news. In recent days, the Euro has been recovering after the correction which begun two weeks ago, when the common currency broke the technical support of the 1.18 against the Dollar. Now the question is whether the recent rise in the Euro signals the end of this correction or whether it was merely a break. It is important to stress that all these issues do not invalidate the fundamental trend, which is positive for the common currency. Despite the weight that foreign markets have in many European companies, the economy of the Old Continent has not yet resented the appreciation of the common currency. Not even the German economy, which is very foreign trade oriented, has shown signs of slowing down. The most recent economic data such as industrial production, orders to industry and the ever-relevant IFO (entrepreneurs’ sentiment) have continued to show strong dynamism. Today, the Government of Berlin will announce its projections for the German economy.
US markets rallied again, with the Dow Jones high on the back of the appreciation of Wal-Mart shares. The session was dominated almost exclusively by specific company news. Wal-Mart announced a share buyback plan totaling 20,000 M.USD and announced it expects US online sales to grow 40% in the fiscal year ending January 2019. Projections for strong growth in the US -commerce presents a clear challenge to companies like Amazon. Although the earnings season approach has merited increasing media coverage, the future of US monetary policy remains a ubiquitous theme on Wall Street. Last week, through the statements of the various members of the Fed, the division within the Central Bank on this topic became clear. During this week, investors will have to follow a new series of interventions from FED members as well as today’s publication of the minutes of the last meeting of the Central Bank. In this context, the economic indicators will, as the employment report has shown, be of limited use in benchmarking the next steps of the FED. Also today, President Trump will be in Pennsylvania where he will look at the tax reform plan. At the end of last week, the Republican initiative in this matter suffered a serious setback due to the exchange of accusations between President Trump and Tennessee Senator Bob Corker. This senator is a prominent figure on Capitol Hill and has a notable influence on some factions of the Republican Party.
Asian markets closed with gains contained but were enough for several indexes in the region to reach the highs of this decade. In Japan, the Nikkei has reached levels not reached since 1996. In this country, it was published that industrial machinery orders rose 3.40% in August, comfortably surpassing forecasts of 1.10%.