Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In pre-opening, European indices were trading higher. The evolution of yields and crude oil should be the main variables conditioning the session today. Oil prices are expected to be influenced by the end of the deadline given by a number of Arab countries, led by Saudi Arabia, to Qatar to accept a number of conditions. If Qatar does in fact refute the required conditions then other countries are likely to impose new political and economic sanctions, worsening instability in the region. Qatar is an oil producer but its importance at the regional level is that it is the largest exporter of natural gas in the Gulf, and its reserves (which it shares with Iran) are one of the largest in the world. In the Asian session, oil traded higher, entering the zone of resistance formed by the 48.33 / 49.15 levels.
After Thursday’s losses, the US markets failed to start a recovery. This incapacity already shows some reluctance by investors to interpret the recent decline in indexes as a buying opportunity. In fact, in the last year, the market declines were an excellent buying opportunity, so the reluctance we have described may signal a change in investor sentiment, at least in the short term. Since the beginning of the year, the Dow Jones and S & P have gained around 8%, which was the best biannual performance since 2013. The oil sector benefited from the resilience of crude oil to turbulence and volatility that affected others Assets such as equities, gold and bonds. The banking sector mirrored the rise in yields and, more relevant, the increase in the spread between long-term and short-term rates. The ETF of this sector appreciated 3.80% during the week. In the negative, the technological and biotechnology sectors continued to be the target of capital gains. The sectors most sensitive to interest rates were penalized by the sharp rise in yields in the last three sessions. Today, the session will be shorter on Wall Street, ending at 6:00 pm GMT. Tomorrow, Independence Day is celebrated, with American markets closed.
Asian markets closed with contained variance, despite the positive news coming from the Chinese economy. In June, the Caixin PMI index reached 50.4, above the estimated 49.4 and 50.0, which separates a cycle of expansion from a contraction cycle. Unlike the official PMI index prepared by the state authorities, the Caixin PMI index, calculated by a private institution, is compiled through surveys of small and medium private enterprises. These companies are more representative of the more dynamic areas of the Chinese economy than the large state-owned enterprises, which are at the heart of the official PMI index.