Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices did not present a positive trend. The mining sector should continue to be highlighted. Copper hit highest yesterday for the last three and a half years. Sustaining the rise in this raw material are, on a more structural level, positive prospects for the world economy. In fact, the current macroeconomic environment has some unique characteristics. The current phase is marked by a unison of the major economic regions, something that was not observed more than two decades ago. Thus, this whole cycle is guided by a high correlation between the main economies, with the growth of one to stimulate and reinforce the expansion of the others. The world economy and copper have a peculiar relationship. If on the one hand the former influences the quotation of the second, on the other hand, the copper cycles anticipate the economic cycles, making copper a good barometer of the world economy, deserving in financial markets the nickname of Dr. Copper. Another reason for the recent rise in copper, of a more cyclical nature, was the publication of a sharp rise in Chinese imports of this metal. In this country, copper is not only a widely used raw material but also a guarantee for commercial transactions or for borrowing. Thus, this second function of this metal represents, especially in periods of economic expansion, another source of buyer interest.
The American markets closed without major fluctuations. Yesterday’s session was the second least traded of this year, only preceded by the reduced Black Friday session. The main mark of the day was the intersectoral rotation. The decline in yields has attracted buyer interest in the real estate and utilities sectors. On the other hand, there was some profit taking in the oil sector, which yesterday had a clear overperformance vis-à-vis the S&P. After the price of oil rose due to the explosion of a pipeline in Libya, the publication of the inventories of crude oil and gasoline in the USA today will be closely monitored. In terms of economic indicators, the Consumer Confidence Index, as measured by the Conference Board, declined in December after reaching a 17-year high in the previous month. Thus, this indicator decreased in December from 128.60 in November to 122.10, compared to the expected 128.0. On the other hand, and in relation to the real estate market, the number of real estate purchase and sale contracts increased by 0.80% in November compared to the same month of the previous year, which represents the first increase since June of this year. However, compared to the previous month, the increase was only 0.20%, against an expected fall of 0.40%. Today the session should be equally calm. Most likely institutional investors should adjust their portfolios by the end of the year. In addition, it can not be ruled out that some investors carry out, for tax reasons, capital losses in shares where they incur losses.
Most of the Asian markets closed higher, with mining stocks standing out due to the strong appreciation of copper. The Nikkei was the only index to close with losses, which was explained by the decline of the shares of the energy sector that yesterday had led the rise. Bank securities were another sector that penalized the Japanese market.