European markets began to trade without a definite trend. In macroeconomic terms, to underline that at 8.30, Mario Draghi will attend an event in Frankfurt. Although it is not fully expected that he will address the issues related to the monetary policy of the institution it chairs, Mario Draghi’s intervention is always closely scrutinized by the financial markets. At the sectoral level, the oil stocks could be one of the highlights of the session. Yesterday, DJStoxx Oil & Gas suffered sharp losses after the Norwegian sovereign fund informed it would withdraw its oil stocks from its benchmark. Norge Bank is the largest sovereign fund in the world, managing around 1 000 000 M.USD. The fund is fueled by oil revenues and aims to generate returns (through investment in financial assets) for future generations, when oil exploration is gradually losing ground. The good performance of Nasdaq could boost the respective sector in Europe, as several European shares are suppliers of American technology companies. However, the hypothetical good performance of European technology stocks is not in itself a sufficiently strong catalyst to boost the market as a whole, accounting for only 6% of the DJSToxx600.
American markets have achieved sharp gains. The main drivers of the rise were the approval in the House of Representatives of the proposed tax reform and the recent declines that have attracted many buyers to the market. The House of Representatives approved a proposal that provides for a reduction in IRC from 35% to 20%, reduction of IRS from 7 to 4, and the implementation of various tax benefits that increase disposable income for families. The good results from Cisco and Wal Mart informally ended this earnings season. About 93% of the companies that make up the S&P500 have already reported their quarterly accounts, with 74% outpacing profit estimates and 66% forecasting sales. During the third quarter, the profits of these companies grew 6.10% and revenues 5.80%. In terms of economic indicators, the number of weekly applications for unemployment benefits stood at 249 000, compared to the expected 235 000. On the other hand, Philadelphia’s FED economic activity index reached 22,70 in November, compared to an estimated 25.00, while industrial production increased by 0.90% in October, compared to the expected 0.50%.
Asian stocks reacted moderately to the strong gains accumulated by the US markets during yesterday’s session, despite the high correlation between Asian and American indices. Even so, the good performance of the Nasdaq led the Korean and Taiwan stocks to overperformance.