Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening European markets were trading slightly higher. This week will again be shorter due to the celebration of the New Year. Today, the trading volume, which is traditionally lower, will also be conditioned by the closure of the London stock exchange (“Boxing Day”). In business terms, the news are not relevant at the beginning of week. An highlight to the Swiss banking sector, after having informed Reuters that four Swiss banks will pay more than 178 M.USD to the US Justice Department to avoid possible charges for helping tax evasion to US citizens.
Just four days before the end of the year, investors will be alert to some economic data to be released in the US and Europe. In the last stock market session before Christmas the market closed with slight losses, but the rally recorded in the previous three days allowed for a positive locking in weekly terms. Last Thursday, 9 of the 10 sectors ended lower, with the energy sector to lead declines even with the rise of oil price. With many stock markets closed and with many investors absent this time of year liquidity was naturally low. The S & P 500 recorded an increase of 2.80% in the three and a half days before Christmas, in what was the best week since November. During this period, before the rise in oil prices, the energy sector rose 4.60%, thus recording the best performance since October. Many investors and analysts point to a stronger “Santa Claus rally”, a period that includes the last five sessions of the year and the first two of the new year. Over the past 29 years, the S & P had a positive performance 26 times, with an average gain of 1.74%. Last week, some of the economic data released cheered investors, accentuating a certain optimism regarding the prospects for economic growth, following the rise in key interest rates. Household expenditure increased 0.30% in November, the same variation in earnings and inflation associated with consumption grew 1.3%, in line with estimates. In turn, consumer confidence measured by the University of Michigan, rose to 92.6, the highest level since July. The number of weekly claims for unemployment benefits fell by 5,000 to 267,000, so keeping up close to the minimum level in decades (255 000). The economists estimated that this indicator had set in 270 000. With a very light agenda of economic indicators for the next days, the spotlight will be focused on Consumer Confidence (Tuesday) and Pending Home Sales (on Wednesday).
The Japanese market ended unchanged, with rising oil prices boosting the stock market indexes, against figures for industrial production and retail disappointing analysts and investors. Industrial production in the country in November declined for the first time in three months. A 1% drop came after increasing 1.40% in October, surpassing the 0.40% drop expected by economists. On the other hand, retail sales in the country suffered a decrease of 1% in November, the first decline in two months. These data thus put more pressure on the Bank of Japan and the Government to give more stimulus to the economy. The stock market index Nikkei forwards to register a gain of more than 7% in the year, in line with what happened in 2014, in a context of a currency (Yen) most undervalued and consequently higher corporate earnings. In China, the Shanghai index closed in negative territory today, with the banking sector leading losses after data on industrial production in China below the forecasts.