Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets negotiated in positive territory. After the week of escalating tension between the US and North Korea rose to unprecedented levels, geopolitical fears on this first day of the week seem to have eased. According to the latest news, Secretary of State for Defense Jim Mattis and US Secretary of State Rex Tillerson will have reported that the Trump Administration continues to seek diplomatic resolutions with Pyongyang. Still, investors should continue to monitor developments in relation to the situation on the Korean Peninsula. In this regard, in addition to the trend of the “Safe Haven”, investors will monitor the behavior of the South Korean currency, the Won. Traditionally, the week of August 15 is the second least traded of the year, only preceded by the Christmas week. However, given the geopolitical situation and given the level of alertness of investors, the decrease in volume may be less significant than in previous years. In terms of economic indicators, industrial production in the Euro Zone should be published.
The US market closed last Friday’s session on positive territory, as tensions between the United States and North Korea escalated. The market recovered from losses from the previous days, driven by the strong risk aversion fueled by the most recent statements by the US President. Leading the earnings of the S & P500 index were companies related to information technology. However, last week this index registered the second worst performance of the year, losing about 1.40%. For its part, Apple was the most positive contributor to Dow Jones earnings, with the week being the second-worst week of the year. The Nasdaq Composite showed a relative overperformance, having recorded the third worst week of the year. While concerns about tensions with North Korea persisted, investors were also mindful of economic data. Inflation, as measured by the consumer price index, increased by 0.10% in July, below the estimated 0.20%. In annual terms, inflation stood at 1.70%, in line with that anticipated. Even if the most volatile goods were excluded, inflation did not exceed 1.70%. In recent months, inflation has remained stubbornly below the 2% desired by the Fed. The Central Bank has argued that the effects that have pushed inflation are fleeting, something recent readings have challenged even with the economy operating at full employment. In microeconomic terms, retailer J.C. Penney’s depreciated 17%, after reporting a quarterly loss higher than expected.
Asian stock markets rebounded after three losing sessions, backed by Wall Street’s close on Friday. In addition to monitoring the situation on the Korean Peninsula, investors reacted to the release of economic data in China. Industrial production for July increased by 6.40% yoy, compared to forecasts of 7.20%, while retail sales increased by 10.40% in the same month compared to the forecast of 10.80%. Investment increased by 8.30% in the first 7 months of the year, with economists anticipating a 8.60% change. Consequently, the price of oil fell, in the face of fears about prospects for demand for this raw material.