Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The opening of European markets should be slightly higher, given a certain calm in terms of geopolitical tensions. The BBC, citing North Korean media, revealed yesterday that North Korean leader Kim Jong-un has reviewed the military plan to fire missiles to the American island of Guam in the Pacific Ocean but will wait to see What the Americans are doing, in an apparent slowdown in the provocative tone of recent weeks. In terms of business results, the figures for Carlsberg and Admiral Group are now known. On the macroeconomic front, GDP will be published in the Euro Zone for the 2nd quarter.
The US market ended yesterday’s session with very contained variations. The retail sector was in evidence and was among the worst performers, with the SPDR S & P Retail ETF registered a devaluation of 2.70%. The results were lower than expected by Advance Auto Parts and Dick’s Sporting Goods (the latter lost 23%). But the highlight was for Home Depot stocks that were the main driver of the Dow Jones index by losing 2.70 percent even after the company raised its outlook for the year for the second time this year after reporting better results than estimated. In terms of economic indicators, retail sales increased by 0.60% in July (vs. 0.40% expected), and if we exclude auto sales this indicator rose by 0.50%. On the other hand, retail sales for the month of June were revised upwards from a 0.20% drop to an increase of 0.30%. Wall Street is centered on the Fed’s earnings season and monetary policy and the tension on the Korean Peninsula does not seem to be a factor that changes investors’ priorities. In this context, the minutes of the last meeting of the FED, held on 25 and 26 July, will be published today. In this event, the Federal Reserve kept the fed-funds interest rate range unchanged at 1.00% -1.25% and signaled that the balance-sheet normalization process will soon begin. The first step will most likely be the reduction of asset purchases with the money coming from repayment of maturing bonds. To justify this decision is the positive view the FED has of the economy. With the economy operating at full employment, with the creation of jobs being labeled “solid” even with the 4.40% unemployment rate, with consumption and investment growing, the Central Bank believes that are gathered the conditions to reduce its balance sheet (amounting to 4 500 000 M.USD). According to CNBC, with these economic data published yesterday, expectations for a rise in interest rates in December increased to 54% from 37% the previous day.
Most Asian markets ended up as investors react to their published business results and to the appreciation of the Dollar. However, the Japanese market was pushed by stocks of automakers that nullified gains in the technology sector.