Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The session should be influenced by the evolution of the process of approving the tax reform in the USA, which in the last hours was the result of some surprises. In the debt market, the sharp rise in yields in the US in the last two days (one of the biggest this year) is expected to induce a similar move in Europe. A rise in European countries’ sovereign debt rates should relegate the most sensitive yields to an underperformance. Technically and in a short-term perspective, we will remember that while the DAX stays above 13200, the odds of a rally are higher than the occurrence of a correction.
US indexes closed lower, in a session marked by the realization of some profit takinhg. This move had its epicenter in Apple shares. Nomura’s recommendation to reduce in Apple served as a motivation for a number of investors to realize some profit takinhg, not only in this stock but also in the technology sector as a whole. Analysts at the Japanese bank argue that the share price may already have discounted the entire sales cycle of the iPhone X. Thus, the recommendation for Apple has been reduced from Buy to Neutral and was the first cut in a recommendation for Apple in the last 6 months. The weakness in Apple shares (-1.10%) affected not only the shares of companies that are suppliers of the Cupertino company but also other technology titles. Subsequently, the flow of sales also reached other sectors, with a special focus on those most geared to the domestic economy, which are the ones that have been valued most, since they benefit most from the effects of the tax reform. However, the process of approving the tax reform continues to have a troubled course, with some convoluted contours. The House of Representatives approved the proposed measures with 227 votes in favor and 203 in opposition, with 12 Republican congressmen voting against the reform. After the initial festivities, it was revealed that the vote on three measures of the tax package did not meet all procedural requirements to become laws. That being so, the vote will have to be repeated, most likely today. Also in a “lightning” vote, the Senate approved the tax reform in a tighter vote, which received 51 favorable votes and 48 votes against. The tax reform that was approved in the Senate differs in some points from the almost approved in the House of Representatives, reason why this last organ will have to harmonize with the proposal of the Republican senators. Although not yet formally scheduled, the House of Representatives vote is expected to be held today. If approved (and if there is no turning back), the next few days will be signed by President Trump, becoming law.
The Asian session was relatively quiet after the volatility that marked the recent sessions. The day was essentially marked by news from companies like Subaru. The car manufacturer has assumed some deficiencies in the quality control of the vehicles it produces. Shares of Subaru fell 7.24%.