Dax30 | FTSE100 | SP500 - Market Notes

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Stock Markets – Closing Note - 5 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Most European markets ended the week higher. The gains from the oil, utilities and commodities sectors contrasted with the losses of the technology sector. The banking sector closed with a slight loss. In Milan, the major banks ended up low, despite the good news revealed by the stress tests carried out on 4 banking institutions in the country. All of them reported capital ratios higher than those required in the extreme scenario: Intesa Sanpaolo reached a ratio of 10.64%, Unicredit 9.34%, UBI Banca 7.42% and Banco BPM 6.67%. The results of these tests further attenuate the risk that the economic and budgetary situation in Italy generates in the context of European stock markets. In terms of economic indicators, the ISM index for the non-manufacturing sector stood at 60.3, above the expected 59.0.

On the eve of midterm elections in the United States, Wall Street traded in different directions. In the financial sector, Berkshire Hathaway led the gains, in response to the good results reported. Other institutions also contributed to the gains of the session, such as Citigroup and Bank of America. Oil prices rose in international markets on the day the United States activated a new package of sanctions on Iran - which meant ending oil purchases in this Arab country as a way of punishing Tehran for breaches of the nuclear deal.

 

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Stock Markets – Closing Note - 6 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Most European Indexes slightly declined today. The investor focus was on the US (due to the mid-term elections) as well as on the published business results. The telecommunications industry led the losses, in contrast to the banking, retail and automotive sectors that were among the best performers. In Madrid, Siemens Gamesa showed a considerable appreciation (14%), after reaching its annual objectives. However, the company cautioned that commodity prices and emerging market volatility could penalize margins by 2019. Adecco and Deutsche Post also reacted positively to the presentation of the respective accounts. However, the uncertainty associated with Brexit and the relations between Brussels and Italy continued to weigh on investors' decisions. In terms of economic indicators, the PMI economic activity index in the Euro Zone stood at 53.1 in October, compared to 52.7 expected by economists, while the same indicator for the services sector reached 53.7, up from the estimated 53.3.

In mid-term elections, the US market was trading higher. The sentiment was expected with respect to the outcome of the mentionted elections, but the question of trade relations between the US and China was still present. Chinese Vice President Wang Qishan said Monday that China is ready to start negotiations and work with the US to resolve trade disputes. Reuters informed that senior representatives of the two countries are due to meet in Washington earlier this Friday. In sectoral terms, the industrial and technological sectors led the gains.

 

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Stock Markets – Closing Note - 7 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Today was mainly about reactions to the results of the US elections. Several sectors closed with valuations above 1%, especially the banks and the oil sector (curiously despite the drop in the price of oil). In Madrid, the banking sector performed very well in response to the Supreme Court's decision to pay the stamp duty burden associated with mortgages: contrary to the decision taken in October, the Supreme Court now determines that it will be the customers, not the banks, to bear these charges. In Frankfurt, Adidas lost ground despite raising its profit outlook for the year.

The result of the midterm elections was being welcomed by the US stock market: the Democrats managed to have a majority in the House of Representatives, while Republicans strengthened their position in the Senate. Stocks from well-known companies such as Caterpillar, Goldman Sachs, Amazon and Alphabet traded on a rising trend. In the meantime, the FED meeting will begin today, the outcome of which will only be known tomorrow. After raising the benchmark interest rate at last September's meeting, the Federal Reserve is expected to keep the range of 2.00% -2.25% and will reiterate its intention to continue tightening monetary policy in the coming quarters, an attitude supported by the most recent economic indicators.

 

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Stock Markets – Closing Note - 8 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets closed higher, in a session where the focus was on business results. However, the mood was restrained after the European Commission and IMF perspectives for the Eurozone were known. The European Commission expects the GDP of this region to grow 2.10% this year, but by 2019 and 2020 it should fall back to 1.90% and 1.70%, respectively. In turn, the IMF also lowered its forecasts for the European economy, reducing its growth estimates from 2.80% in 2017 to 2.30% in 2018 and 1.90% in 2019. The banking sector was one of the best performers in response to the good results published by Commerzbank and Société Générale, which exceeded the estimates. Commerzbank reported that its third-quarter results declined, partly due to extraordinary gains that were recorded in the same period of the previous year. Thus, profit fell from € 476m to € 218m (vs. € 202m expected) and revenues fell from € 2510m to € 2190m (vs. € 2180m). The bank reiterated its annual profit outlook. Société Générale reported a 32% increase in quarterly profit to € 1230 M., which surpassed the estimates. In Italy, BPM rose 2.86%, after announcing that it is analyzing the market conditions in order to be able to sell 8600 M. € bad credit. On the contrary, Unicredit fell by about 4%. The Italian bank revealed that losses from its investments hurt its quarterly profits. Net income decreased to 29 M. €, from 2820 M. € in 2017, when the result was driven by a capital gain from the sale of the Pioneer Investments unit. In Frankfurt, Siemens gained ground. The company has announced that it will raise its dividend even though profit has fallen to 681 M. € from the expected 737 M. € due to the high costs associated with the restructuring of one of its units.

Following the reactions to the election results, Wall Street traded with contained variations as investors awaited the outcome of the Fed meeting. Today's meeting should be of an interim nature. In fact, this month's meeting will represent a bridge between the September meeting (when the central bank raised the central rate by 0.25%) and the December meeting (when it will presumably make a further increase). As no press conference is scheduled, investors' attention will be drawn to the statement of the meeting. In this field, the FED message should not change significantly from the previous meeting. The Central Bank continues to have a positive view of the economy, based on internal consumption and the dynamism of the labor market, which will eventually bring inflation within the limits recommended by this institution. Faced with this reality, the FED should continue to increase, gradually, interest rates. In the business plan, Qualcomm lost more than 7%, after providing sales forecasts for the last quarter of the year below the analysts' estimates.

 

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Stock Markets – Closing Note - 9 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European stock markets closed lower on Friday as investors reacted to comments made yesterday by the US Federal Reserve and political developments in Italy and Brexit. In addition, reactions to published results were also observed. Raw material producers, a sector very exposed to the Chinese economy, led the losses, penalized by the sentiment that was mirrored in the behavior of the Asian stock markets today. Banks have also lost ground, with UBS being hampered by news that the US government is accusing Switzerland's biggest bank of defrauding investors of selling mortgage-backed assets that led to the global financial crisis in 2008. By its time, BBVA was also under a lot of pressure because the Mexican government intends to eliminate some of the commissions charged to clients. The Italian banks presented different behavior on a day marked by a high expectation of the meeting between Eurogroup President Mario Centeno and Italian Finance Minister Giovanni Tria after the European Commission published economic forecasts that differ from those of Rome. Allianz has advanced more than 2%. The insurer reported quarterly profits of 1940 M. € (24% on the same quarter of 2017) more than the estimated 1880 M. €. The insurer was comfortable with this year's goals. Still in Frankfurt, Thyssenkrupp fell about 9% after lowering its profit estimates for the second time this year.

In this last session of a week very rich in events (from the mid-term elections to the FED meeting), the US market was trading lower. Today, leading the losses were the energy and technology sectors. The price of oil fell in international markets, having broken the US $ 60 per barrel barrier for the first time since March. This downward trend that has been taking place in recent times comes at a time when an increase in the global supply of this raw material is expected to be faster than expected. It should be recalled that in October the price of this raw material reached its highest levels because of fears that US sanctions against Iran (which came into force this week) limited the market leading to a shortage in certain regions. However, other major producers such as Saudi Arabia, Russia and shale oil companies in the US have steadily increased production, more than offsetting the decline in Iranian barrels.

 

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Stock Markets – Closing Note - 12 Nov

European stock markets reversed to negative ground, driven by the behavior of the technological, automotive and industrial sectors. The technology companies were influenced in part by the performance of the US counterparts, more specifically by the news from Apple. Its sector fell 3.50%. In Frankfurt, SAP lost 5.65%, having agreed to acquire Qualtrics for 8 M.USD. Infineon depreciated by concerns about reduced demand. Conversely, it was the oil sector. Over the weekend Saudi Arabia announced a cut in production for December in response to the recent drop in prices. BP and Royal Dutch rose 1.18% and 0.34%, respectively. In Milan, the highlight goes to Telecom Italia that benefited from the news of an eventual merger with rival Open Fiber.

The behavior of Apple's stocks dictated part of the course of the North American market. In fact, Cupertino's stock fell more than 4.50%, after Lumentum Holdings, which manufactures technology for facial recognition for iPhones, has narrowed its outlook for the second fiscal quarter of 2019. This negative performance was detrimental the performance of the entire industry, including Alphabet and Amazon. On the other hand, in addition to the fears associated with global economic growth, the appreciation of the Dollar also pressured the stock market.

 

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Stock Markets – Closing Note - 13 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

Today's session was marked by slight gains. The telecommunications companies were among the best performers, with Vodafone leading the gains, after having presented its results. The British company has announced that it will keep the dividend unchanged, thus stopping a cycle of continuous increases. The reason for this decision is the need to contain the debt after the acquisition of Liberty Global for 22 000 M.USD. The banking sector was also one of the good performers, with some Italian banks standing out. On the contrary, the oil sector recorded significant losses, reflecting the fall in the price of oil that reacted to the statements of the President of the United States. At the macroeconomic level, the annual rate of inflation in Germany reached 2.50% in October, the highest level in more than 10 years, mainly due to the rise in the prices of oil products.

Wall Street traded higher, with the tech sector recovering some of the lost ground yesterday. In addition, the news of renewed talks between the US and China on the trade issues involving the two countries also helped to support the positive sentiment. Meanwhile, oil prices fell below $ 70 a barrel, a day after Donald Trump said he hoped OPEC would not cut production of this commodity in order to raise prices.

 

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Stock Markets – Closing Note - 14 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets ended lower, prompted by the trend reversal on Wall Street. The Italian market closed down after the Italian government announced that it would maintain its economic growth and deficit forecasts for 2019, despite the demands of the European Commission to review its budget. On the macroeconomic front, Eurozone GDP grew 1.70% in the third quarter, according to the second Eurostat estimate released today. This number was in line with economists' estimates.

Wall Street traded lower, retreating from early gains. At stake was the further decline in Apple shares (due to a cut in its recommendation by an investment house) and the devaluation of the banking sector. Oil prices rebounded after Reuters reported that OPEC plans to cut oil production by as much as 1.4 million barrels a day. In terms of economic indicators, the consumer price index rose 0.30% in October, in line with forecasts, driven by rising gas prices, second-hand cars and housing. If we exclude the most volatile components, this indicator was 0.20% in monthly terms and 2.10% in annual terms (compared to estimates of 2.20%).

 

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Stock Markets – Closing Note - 15 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets have declined, pressed by the current political situation in the UK. After a pre-agreement was reached yesterday between the United Kingdom and the European Union on Brexit, several British ministers today presented their resignation. The British Pound depreciated about 1.50% against the Dollar. The car sector ended up with a loss of more than 1%, after it was reported that European car sales fell by 7.40% in October. Instead, commodity producers showed overperformance after Reuters reported that China had sent a written response to the US regarding possible progress in the trade relations of the two countries.

The US market traded on a downward trajectory. In the Dow Jones index, shares of Amazon and Walmart led the losses. The retailer reported positive quarterly results that however were not able to offset the negative impact caused by Warren Buffett's reduced stake in the company. Walmart reported a profit that surpassed the estimates (driven by online sales), but revenue fell short of forecasts. EPS reached USD 1.08 and revenues USD 124890. In the technology sector, Cisco posted a significant gain after having posted profit and revenue above expectations. Revenues increased 7.70%. In terms of economic indicators, retail sales increased 0.80% in October, above the expected 0.50%. If we exclude auto sales, this indicator rose 0.70%, compared to the 0.50% forecast. On the labor market, the number of weekly applications for unemployment benefits increased in 2000 to 216 000 compared to the expected 213 000.

 

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Stock Markets – Closing Note - 16 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The issue of Brexit and the ensuing political instability that has arisen in recent days have once again influenced investor sentiment. Investors will continue to structure their expectations according to the evolution of events. Yesterday is a convincing proof of the speed of events. The session started under good auspices after Theresa May managed to bring together within her cabinet and her party a consensus that would increase the likelihood of the agreement reached with the European Union being approved in Parliament. Subsequently, the massive dismissal of six executive ministers forced investors to recalculate these probabilities. In this context, the London Stock Exchange finished in low, although with a contained devaluation. This behavior was justified by the positive performance of the mining companies, which also favored the sector of raw material producers and made it the best performer in sectorial terms. Oil prices rose on international markets, fueled by expectations of OPEC production cuts, although production of this raw material at record US levels has limited the upward trajectory. In macroeconomic terms, Eurostat today reported that consumer prices in the Eurozone increased 2.20% in October this year. This is the highest growth in consumer prices since December 2012.

The US market traded lower, with the technology sector ranking the 2nd worst performer in the S&P 500 index. Nvidia shares fell more than 17 percent after showing disappointing revenue and prospects. In the macroeconomic level, industrial production in October registered an increase of 0.10%, below the expected 0.20%.

 

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Stock Markets – Closing Note - 19 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In the begining of the week, uncertainty surrounding Brexit was once again influencing European markets. In addition, the news about Renault more specifically conditioned their stocks and the sector as a whole. President of Renault, CEO Carlos Ghosn, was arrested on suspicion of having reported a lower salary than he actually received in Japan for his duties at Nissan. Carlos Ghosn will be fired from the Japanese manufacturer. Renault shares fell 8.43%. Once again, the producers of raw materials presented a relative overperformance, thus helping the performance of the British market, where some mining companies negotiate.

Wall Street traded lower, under pressure from Apple and semiconductor companies. Apple's shares were down 3.40 percent after the Wall Street Journal reported that the company cut production of its latest iPhones earlier this year. The technology sector was also penalized by the news that Chinese authorities have alleged "significant evidence" of Samsung's antitrust, SK Hynix and Micron Technology's violation of antitrust rules. Shares of Micron and Advanced Micro Devices were down more than 3 percent. In terms of indicators, the sentiment index of builders stood at 60 in November, compared to 67 expected by economists.

 

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Stock Markets – Closing Note - 20 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The Nasdaq's strong losses during yesterday's session spread to Asian markets and European stock markets. Although the technology sector accounts for only 6% of the DJStoxx600 (compared to the 25% it represents in the S&P500), today it has depreciated more than 2%. Two other sectors that were heavily pressured were banking and commodity producers. In Frankfurt, Deutsche Bank was penalized for the ongoing investigation into allegations of involvement in the money laundering scandal of Danske Bank. Still in the banking sector Société Générale declined 2.13%, after the news that the bank paid a fine of 1340 M.USD to the American authorities for not respecting the sanctions imposed by this country to Iran, Sudan and Cuba. In London, the mining companies reported significant losses, thus harming the producers of raw materials. Brexit's latest development concerns the inability of the internal opposition to Theresa May to issue a motion of censure to the Prime Minister. In the oil markets, crude has once again accumulated losses, falling by more than 4% today. Investors recently expected OPEC (Saudi Arabia-led) to cut output in order to stabilize the drop in oil prices, which has lost 25 percent since early October.

The selling pressure that hit Wall Street yesterday, and more specifically the technology sector, remained in today's session: the major companies in the industry, namely the well-known FAANG. In recent days, market sentiment over major tech stocks has been shaken by a Wall Street Journal report that Apple has cut back production of its latest iPhones earlier this year. Apple declined today by about 2.50%, while Amazon, Facebook and Netflix were down more than 2.50%. Chipmakers also traded with sharp losses. In retail, Target disappointed the market by reporting declining margins and increased sales, joining the long list of retailers that gave the market little cheering news before the so-called holiday season. In terms of economic indicators, homes at the start of construction increased 1.50% in October, compared to an estimated growth of 1.80% by economists. On the other hand, the number of building permits decreased less than expected (-0.60% vs. -0.80%).

 

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Stock Markets – Closing Note - 21 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

After significant losses at yesterday's session, today's session was positive for European stock exchanges. Several sectors closed with valuations above 1%. One of these was the banking sector, with Italian institutions making gains, with news that Italian Prime Minister Matteo Salvini may be preparing to revise the State Budget. As expected, the European Commission rejected the revised budget proposal submitted by the Italian Government and could formally initiate the sanctions process. Still in the political field, the UK's Prime Minister, Theresa May, is meeting in Brussels with the President of the European Commission, Jean-Claude Juncker. May will continue negotiations on the departure of the United Kingdom from the European Union. In the US, oil prices rose, a performance favored by data from the US Petroleum Institute, which shows that US crude reserves unexpectedly fell last week. However, today it was the turn of the Energy Information Administration of this country to have reported that oil reserves increased for the ninth consecutive week. Boosting the car sector, notably Renault, was recovering after the scandal over the arrest of CEO Carlos Ghosn.

Wall Street traded bullish, with much of the tech companies recovering from recent losses. Still, after the strong selling pressure that shook the technology sector yesterday, news was still worrying. Foxconn, Apple's largest supplier, today announced a cost-cutting plan, including a reduction in the number of employees, anticipating a 2019 "very difficult and competitive" year. On the macroeconomic level, there were several data known today, since tomorrow is a holiday (Thanksgiving). Orders for durable goods during the month of October fell 4.40%, compared with an expected decrease of only 2.60%. If we exclude transport orders, this indicator increased by 0.10%, below the expected 0.40%. Meanwhile, the advanced indicators of the economy during the same month were in line with expectations (0.10%). On the other hand, the number of weekly applications for unemployment benefits stood at 224 000, compared to the expected 215 000. On the real estate market, sales of used homes rose more than expected (1.40% vs. 1%) and the consumer confidence index, measured by the University of Michigan, reached 97.50, below the estimated 98.30. However, in terms of monetary policy, Reuters advanced that the MNI news agency said the Federal Reserve is planning to pause interest rates by the spring of next year.

 

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Stock Markets – Closing Note - 22 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European markets closed lower, losing part of the gains they conquered yesterday. The celebration of the Thanksgiving holiday in the US withdrew some liquidity to today's session, which showed below average volumes. The sectors that contributed the most to today's flexion were mining and telecommunications. The fall of the banking sector has been softened by the rise of transalpine banks. After the European Commission rejected the Italian State Budget, local investors seem to believe that the government of Rome is taking a more conciliatory stance, despite the statements of some of its members.

The US market is closed today to commemorate the Thanksgiving day.

 

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Stock Markets – Closing Note - 23 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

The European indices closed with contained valuations. In its opening hours, the European session was characterized by a resilience to the significant drop in Chinese stock markets (which accumulated losses of more than 2%). The volume traded was below average due to the reduced session in New York. Perhaps the European markets would have been able to achieve more significant gains had it not been for the sharp falls in the mining and oil sectors. Oil traded at the lows last year, with Brent reaching 60USD/barrel. To reinforce the recent downward trend has now been the news that Saudi Arabia's production is at its maximum and that US oil reserves have been increasing. The decline in oil was spreading the trend of other industrial raw materials. On the positive side, the stocks associated with tourism and pharmaceuticals emerged. At the macroeconomic level, the PMI indices, related to economic activity and services, were bending relative to October. The November readings were also below expectations, confirming the decline in economic growth in the Euro Zone.

US stocks were trading at a loss. The session today is shorter, ending at 6 PM GMT. The main hallmark of the session, in addition to the drop in oil prices, was the overperformance of stocks more focused on the domestic economy (customized by the Russell2000 index), which contrasted with selling pressure on top technology stocks.

 

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Stock Markets – Closing Note - 26 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

European indexes closed with valuations above 1%. The deal reached over the weekend for Brexit, the latest news from Italy and the rise in crude oil were the main catalysts of this rise. The understanding reached between the European Union and the UK over the weekend softened the nervousness among investors. British stocks and pound sterling traded higher. However, on the horizon lies the challenge that Prime Minister Theresa May will face: to bring together an internal consensus capable of securing Parliament's approval of the agreement drawn up over the weekend. The Italian market was the best performer of the day. To galvanize the transalpine investors and to reflect their European peers was the news reported by the local press. According to this source, Deputy Prime Minister Matteo Salvini, who has led the tough wing of the Government in its relationship with Brussels, has opened the possibility of the 2019 Budget to undergo some tinkering in order to reassure international investors. The increase in crude oil led to the appreciation of its sector as well as that of the miner, with which it has a high correlation. At the macroeconomic level, the IFO index, which measures the sentiment of German entrepreneurs, fell from 102.6 in November to 102.0, a level also below the forecast of 102.3.

US markets were trading higher, with volumes recovering after the festive period late last week. The catalyst for the climb was the first numbers of the shopping season (or holiday season) and its positive effects in the technological sector as well as the recovery of crude. Although definitive figures are not yet available, on Black Friday, online purchases amounted to 6200 M.USD, which represents a 24% increase over the same day of 2017.