Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices were testing positive. Although political developments dominate the current situation of the European stock markets, there are some specific factors that may influence more particular sectors and stocks. The growing tension between the UK (supported by a number of European countries) and Russia may begin to negatively affect the stocks of companies with heavy exposure to this this country. The government of London has accused Russia of having murdered three Russian citizens in English territory and is studying, with other European countries, the imposition of new economic and diplomatic sanctions. The US government has announced new sanctions on Russia, a move that has been a bit surprising since the Trump Administration has always shown some sympathy for Russia. Russia has vowed to retaliate in response to any sanctions imposed on it. The European sectors most exposed to the Russian economy are oil, automotive, beverages and luxury goods.
US markets closed lower, with the exception of the Dow Jones that benefited from the good performance of UnitedHealth. Investors spent much of the day trying to gauge what the next Trump Presidency’s customs policy steps would be. The intention to impose new customs duties is visible, but how these taxes will materialize still constitutes a source of uncertainty. The stocks most sensitive to a hypothetical trade war with China began to be the target of investor sales. The best example in this field is that of Boeing, which corrected in the last three sessions 4.30%. As well as being a company well exposed to the global economy, Boeing may be the ideal target for countries that want to retaliate against the US for their protectionist measures. Generally, Boeing orders come from international tendering processes for the award of a number of aircraft. The number of these companies participating in these tenders is low, with Boeing and Airbus often being the only ones to participate. Thus, one way for some countries to penalize the US is to choose Airbus and other airlines over Boeing, since the Government of those countries is often the one who makes the final decision. Today’s session will look similar to yesterday’s session, with investors looking for information that would allow them to reshape their expectations for the future of US trade policy.
Asian markets ended the last day of the week with moderate losses. Fears about possible US protectionist measures continued to dominate investors’ decisions. Even if Washington’s customs measures are concentrated in China, it is important to stress that China is the main trading partner of many Southeast Asian countries. Thus, US customs tariffs may reach these countries indirectly.