Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indexes rehearsed without major fluctuations. One of the best sectors in recent weeks has been the miner. Led by copper (which reached a high of the last 3 years yesterday), the price of various industrial metals has registered strong valuations. These gains are underpinned by strong demand from China, with the country’s economy showing signs that will match the government’s target of growing between 6.50% and 7% by 2017. Another factor for the metals rally is the weakness of the Dollar, as well as the increased exposure of hedge funds to this type of asset. Copper is the most representative metal. In addition to having multiple industrial uses and being used as collateral in lending in China, copper is nicknamed in the financial markets by Dr.Copper because its cycles anticipate the cycles of the global economy. This strong appreciation of industrial metals is also benefiting the chemical sector, since there is a very significant correlation between the two sectors under normal conditions. Now the question is whether these metals ‘valuations have a visible impact on investors’ inflation expectations and by reflection will cause yields to rise.
US markets closed higher. The indices were driven by the outlook for good results. This optimism around the quarterly accounts that the companies will publish was well evident in the appreciation of Apple and Netflix. Apple shares rose 1.80 percent after KeyBanc Capital analysts predicted the company will report results in 2018 that will significantly outperform current forecasts. One should remember that Apple was involved by a negative feeling after the presentation of its new products in September. In the weeks that followed, several hedge funds and other investors with short-term strategies established selling positions in this asset, causing a spiral of sales. Netflix was another share that stood out in the technological field. Another factor that has supported the rally of the main indexes is of a more technical nature. The fact that the main indexes are breaking successive highs and the media coverage that this has deserved in the financial media has captured the attention of many private investors. These savers either directly invest or subscribe to shareholder funds. These subscriptions oblige fund managers to apply the liquidity they have received, fueling upward momentum. On the other hand, other investors whose performance is based on benchmarks are also induced to increase their exposure to the stock market. All these aspects create a positive dynamic that favors the current positive trend.
Asian markets closed with contained gains. The Nikkei, which has been the index that has been most stressed in the current conjuncture, managed to reach the 10th consecutive positive session. At the sector level, technological and mining shares were highlighted. During the Asian session, copper and other metals continued to attract buyer interest from global investors.