Stock Markets – Closing Note - 15 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stock markets ended slightly higher, with most sectors
on positive ground. After a very negative week, investors remain wary of geopolitical tensions, but are looking forward to the US earnings season that is expected to bring some confidence back. The telecommunications companies headed the gains, while the industrial sector was the protagonist of the biggest losses. In Germany, the stock market closed with a gain of 0.80%, although the results of the Bavarian elections yesterday confirmed the fears of investors. The CSU suffered a historic defeat reaching only 37% (compared to 48% of the last election), failing to reach a majority, thus forming a coalition. Meanwhile, the price of oil was watched more closely in the face of the current US-Saudi feud over the disappearance of a Saudi journalist. The European oil sector ended up bullish.
Wall Street traded lower, further accentuating losses from last week. In the technology sector, the falls of Apple and Netflix conditioned the performance of the Nasdaq index. Shares of Netflix were influenced by the price cut by an analyst, Raymond James, while Apple was hurt by the fact that Goldman Sachs had said that the Cupertino company’s results could fall this year as a result of the slowdown in demand in China. In terms of results, Bank of America reported better-than-expected quarterly results and revenues. However, the action lost ground. On the macroeconomic front, retail sales for September increased by 0.10%, below the estimated 0.60%. If we exclude auto sales, this indicator decreased by 0.10%, compared to forecasts of a 0.40% increase.
Stock Markets – Closing Note - 16 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stock markets experienced a very positive day, with some sectors showing gains of more than 2%. The focus was mainly on the dispute between the United States and Saudi Arabia (following the assassination of the Saudi journalist in Turkey). The producers of raw materials presented a relative underperformance. One day after his government presented a controversial State Budget to the European Commission, the Milan Stock Exchange was the best performer of the day. However, it is important to underline that transalpine banking securities have been underperformance vis-à-vis other sectors.
Wall Street traded bullish, with investors cheered by the release of some quarterly results. The results of Morgan Stanley and Goldman Sachs outperformed forecasts, while BlackRock surprised by the positive outlook but fell short in terms of revenue. Outside the financial sector, we highlight Johnson & Johnson whose results were above expectations. In terms of economic indicators, industrial production during the month of September increased by 0.30%, compared to forecasts of 0.20%.
Stock Markets – Closing Note - 17 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stock markets closed lower, especially in southern Europe - Spain and Italy. The car industry was one of the worst performers, after it was reported that car sales in the European Union fell (23.40%) for the first time in 6 months. Volkswagen, Fiat and Renault titles led the losses. Also in sharp decline were the food and oil sectors. In Madrid, the stocks of DIA again showed a significant drop (-13%). In contrast, the technology sector, with ASML rising 3.47%, after its quarterly results surpassed expectations. In Amsterdam, Akzo Nobel also saw a considerable gain after the coating company announced that the profit from its main operations increased by 8%. Fresenius Medical Care shares fell more than 16% after the company cut its sales forecasts and prospects to 2018 in the face of a weaker performance at its US unit. In terms of economic indicators, the final reading of inflation for the Euro Zone during the month of September was in line with forecasts (2.10%). In its core version, which excludes the most volatile items, this indicator reached 0.90%.
On the day of publication of the minutes of the FED meeting and reaction to published business results, the US market opened in negative territory. The minutes of the FED meeting are a tool widely used by debt market players to gauge the sentiment prevailing within the Central Bank and what are the most sensitive issues for its members. The future of US monetary policy will depend essentially on two issues. The first is to know the level of interest rates from which monetary policy ceases to be accommodative and becomes neutral. The second concerns the Central Bank’s dilemma whether monetary policy should remain in a neutral state or if it is to be tightened in the face of strong economic acceleration. Another document that can move the financial markets is what the US Treasury will publish regarding the foreign exchange market. In the business field, IBM shares fell 6.46% after yesterday after closing its quarterly results, which showed a drop in revenue higher than expected, due to the slowdown in software sales. Revenues reached 18760 M.USD, compared to estimates of 19,100 M.USD. The recurring EPS hit them 3.42 USD, against the expected 3.40 USD. On the contrary, Netflix presented its quarterly accounts, having registered a record number in the increase of the number of subscribers. The EPS was 0.89 USD, against the expected 0.68 USD. Revenues were in line with estimates. Thus, the shares of this company had a valuation of 4.53%. After closing, it will be Alcoa’s turn to present its quarterly results.
Stock Markets – Closing Note - 18 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stock markets closed mostly lower, in a session marked by the presentation and consequent reaction to the published business results. At the same time, attention was focused on the current impasse in the Brexit issue. The DJSToxx Banks was penalized by strong selling pressure that hit Italian and Spanish banks. Transalpine bank bonds reflected the widening of the spread between Italian and German yields, which has hit the highs since 2013. The main Spanish banks were heavily penalized, with losses ranging from 2% to 6.50% on the day the Supreme Spanish Court ruled that it should be the banking institutions, not the client, to pay the stamp duty associated with registering a mortgage by changing the standard that has been followed so far. The media sector remained prominent, with France’s Publicis rising about 3.75%, after the world’s 3rd largest advertising company reported that net revenue increased 1.30% in the third quarter. In the retail sector, Carrefour led the gains, after having posted higher sales in the third quarter, referring to the strong performance of its main markets, French and Brazilian. Unilever said today that its sales growth was 3.80% in the quarter, with the increase since the beginning of the year at 2.90%. Total revenues amounted to 12500 M.USD, representing an annual decline of 4.80% due to a negative exchange rate effect and the sale of some of its businesses, which included brands such as Becel and ProActiv. Its shares fell 0.80%. Among technology, SAP% decreased 6.04%. The German company raised its outlook to 2018, after having seen solid growth in its cloud business. Ericsson posted a quarterly net profit that exceeded the estimates by a significant margin, standing at 2750 M.SEK, compared to the estimates of 630 M.SEK. Sales increased 8.90% to 53810 MSEK, also above expected 50280 M.SEK.
US indices were trading lower, reflecting a decline in major tech stocks and rising yields. Alcoa rose 8%, after yesterday after closing its quarterly results, which were above expectations, due to the rise in aluminum oxide prices. Excluding non-recurring items, Alcoa recorded a EPS of 0.63 USD, compared to the estimates of 0.50 USD. Revenues rose 14.40% to 3390 M.USD, above the expected 3310 M.USD. After the closing of the session will be known the results of American Express.
Stock Markets – Closing Note - 19 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European indices traded lower. Investors had to divide their attention across multiple fronts. At the external level, China’s economic data penalized the European export sector. In the third quarter, the Chinese economy grew 6.50%, below the 6.60%, which is the lowest quarterly growth since 2009. At the domestic level, the weakness of the banking sector, more precisely that of southern Europe, stood out. In Italy, friction between the two parties in the governing coalition was driving the spread between Italian and German interest rates to a new high in the last five years. This spread is a risk barometer of the economic and financial situation of the country and an increase penalizes the stocks of this country and with greater incidence the bank bonds. However, at the end of the day the most conciliatory words of European Commissioner Moscovici regarding the Italian situation triggered a rally in Italian banking stocks and a stabilization of the spread.
US stocks were recovering some of the losses suffered yesterday. Encouraging this rise were the good results presented by some companies such as Procter & Gamble, Honeywell, American Express and Schlumberger. At the macroeconomic level, home sales reached 5.15 million units (annualized) compared to the estimated 5.29 million.
Stock Markets – Closing Note - 22 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets ended the day in low. The rise of the Chinese stock exchanges and the first reaction of the bond market to the reduction of the rating of Italy gave an initial boost to the stock indices. The 4.50% rise in the Shanghai stock market enabled commodity producers and the auto industry to rank among the best performers. Fiat advanced 3% as a result of the news that it sold its hi-tech unit Magneti Marelli to a company owned by the private equity fund KKR for 6200 M. €. On Friday after closing, Moody’s downgraded Italian debt from Baa2 to Baa3 with a stable outlook. This is the last degree of the investment category and indicates a moderate credit risk. In an early stage, the market reacted positively, with Italian yields and its spread declining against the Germans. However, in the second part of the session, Italian bonds lost all ground gained in the morning, spreading their weakness to other European assets. Despite the conciliatory tone of the letter sent by Finance Minister Giovanni Tria to the European Commission, the Italian Government reiterated that it will not change the State Budget already presented. The Earnings Season remains one of the main themes of the week. Ryanair posted a considerable gain, despite having reported a profit for the second fiscal quarter below expectations. The company also announced that it has made significant progress in preventing further strikes. On the contrary, Philips fell more than 6% after its quarterly results fell short of forecasts. Shares of the Day suffered heavy losses (-25%) on the day the company revealed that it reviewed the accounts for 2017 and accounted for minus 20 M. € in revenues.
American indices traded without a common trend. The Dow Jones and S & P were being penalized by the correction of the banking and oil sectors. Nasdaq was trading higher, benefiting from the appreciation of the shares of major technology companies. This week, Microsoft, Google, Amazon, among other companies will report their quarterly accounts.
Stock Markets – Closing Note - 23 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
Today there were strong losses for European stock exchanges, with investors sentiment influenced by the weakness of the Chinese stock markets and the situation in Italy. Influencing investor sentiment has been the disappointing business results that have marked the last few days. The letter sent to Brussels by the Italian Ministry of Finance was released. In a conciliatory way in which it recognizes some correctness of the objections of the European Commission, the Italian Government has reiterated that it will not alter its Budget. As a result, the market was still waiting for further developments, with the Italian stock market ending up with a 0.70% drop and Italian 10-year yields up 8 basis points (0.08%) compared to yesterday. On the other hand, the poor performance shown by the Asian stock markets also penalized the markets, mainly the producers of raw materials, a sector very sensitive to the economic cycle of this country. Another sector that closed today with heavy losses was the technological one, due to a sharp fall of an Austrian chip maker, AMS. This company disappointed investors by presenting their outlook for the fourth quarter. In Frankfurt, Bayer fell 9.69% following confirmation in the US of the conviction of its subsidiary Monsanto for hiding the danger of Roundup, its herbicide with glyphosate. In the automotive sector, BMW has said it will call for overhauling 1.6 million diesel-powered vehicles worldwide due to problems in the exhaust gas cooling circuit. Renault reported its quarterly sales. Revenues amounted to 11500 M. € compared to the 12,200 M. € that analysts, on average, estimated. Renault cut its projections for the growth of the Chinese car market (2% compared to the previous 5%).
Geopolitical tensions around Saudi Arabia and some disappointing results were hampering the Wall Street session. Before the opening of the session, the results of McDonald’s, 3M’s and Caterpillar’s were known. 3M reported lower-than-expected earnings and revenues while Caterpillar disappointed investors by reiterating its projections for the rest of the year.
Stock Markets – Closing Note - 24 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets closed with losses in a session that initially had been influenced by the recoveries of the US stock exchanges the day before and the Chinese stock exchanges during the Asian session. Even so, volatility once again dominated the day, as some of the risks that characterize the current economic situation continued to be present. Thus, in the last hour of trading, the European indices lost all the gains made in the morning. The economic and financial situation in Italy has been marked, following the European Commission’s disapproval of the Italian Budget for 2019, by an exchange of words between Rome and Brussels. This tension created a selling pressure on Italian assets and the Euro. Investors are now awaiting Standard & Poor’s rating of the Italian debt rating, scheduled for Friday. The trend of the session was still influenced by the results reported by European companies before the opening. Barclays posted a better-than-expected result: quarterly profit before taxes increased from 1110 M.GBP in the same period in 2017 to 1460 M.GBP, compared to the expected 1330 M.GBP. Deutsche Bank said third-quarter profit fell 65% to 229 M. €, due to a decline in trading income, although it surpassed the estimates (229 M.€ vs. 149 M.€). Total revenues fell 9% to 6,200 M.€, practically in line with estimates. The bank reiterated its objectives for the coming quarter. STMicroelectronics reported an increase in sales and profit in the third quarter. Net revenues increased 11.20% over the previous quarter to 2520 M.USD, slightly above the company’s target and operating profit increased 38% to 398 M.USD. The company said it expects fourth-quarter revenue to grow about 5.70% over the previous quarter.
The three main indices traded bearish. The Nasdaq and smaller S&P were being penalized for weakness in technology stocks. Today and tomorrow, companies like Microsoft, Google and Amazon will report their quarterly accounts. Dow Jones’ losses were being mitigated in relative terms by the good performance of Boeing, a company considered a barometer of trade tensions between the US and China.
Stock Markets – Closing Note - 25 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The opening of the European session was pressured by the heavy losses suffered by the American indexes yesterday. Subsequently, European markets were able to build a gradual recovery. Somewhat hesitantly, investors began to buy the stocks that had posted the biggest losses in the last week. This was also due to the absence of developments in the tense relations between Italy and the European Commission, which induced Italian 10-year yields to fall from 0.10% from 3.60% to 3.50%. This downward movement of these interest rates favored Italian banking stocks, which served as a catalyst for the rest of the European sector. The Earnings Season was relegated to the background. UBS announced that in the 3rd quarter it achieved a profit of 1200 M. CHF and an operating result of 7300 M.CHF. These two items exceeded analysts’ forecasts. Daimler reported an EPS of 1.58€ less than the estimated 1.89€. Revenues amounted to 40210 M€ compared to 39330M€. The CEO of the company defended that in the fourth quarter is expected to see a recovery of activity. The ECB meeting was in line with the expectations of investors, and this institution reiterated the statement from the previous meeting. With regard to the political-budgetary situation in Italy, Mario Draghi was confident that an agreement between Brussels and Rome would be reached.
After the 4% drop yesterday, the US indices traded with a valuation that oscillated between the 1% of the Dow Jones and the 2.50% of Nasdaq. In addition to this recovery represents a technical reaction to yesterday’s decline, the US indexes were reflecting the good results of Microsoft. The company reported EPS of USD 1.14 and revenues of USD 29080. These numbers compare with the 0.96 USD and 27880 M.USD forecast respectively. Microsoft was up 5.80%.
Stock Markets – Closing Note - 26 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The results released by the North American Amazon and Alphabet penalized the sentiment of investors and, consequently, the European indexes that finished this last session of the week with strong losses. Several sectors reported losses of more than 2%. In fact, the day was marked by the reaction of investors to various business results known on both sides of the Atlantic. In the automotive sector, Valeo recorded a strong devaluation (-21.02%), after the automobile manufacturer downgraded its estimates, based on the slowdown of the Chinese economy. Total fell 1.52%. The French oil company reported a 48% increase in quarterly net profit, due to the increase in oil prices, to 3960 M.USD (slightly above forecasts). Revenues increased 27% to 54720 M.USD. Caixabank rose 0.43%. The bank announced that in the 3rd quarter it reached a net profit of 470 M. €. Net interest income stood at 1240 M. € and the CET1 (fully loaded) capital ratio was 11.40%. In Milan, ENI also appreciated (0.99%) after reporting that quarterly profit increased, due to higher oil prices and lower tax burden. Adjusted net income stood at € 1,390m, compared to € 1020m forecast. Meanwhile, investors are waiting for Standard & Poor’s to announce the Italian debt rating. Currently, this agency attributes to Italy a rating of BBB, which corresponds to an adequate capacity to repay the debt contracted but in the future may deteriorate. This rating is two levels above the speculative or junk level.
The US market has returned to negative territory today, with the disappointing results of major technology companies masking published economic indicators. Alphabet and Amazon fell about 3% and 8%, respectively, after yesterday after the closing the two companies made known their quarterly results. The other companies in the FAANG group were also penalized. In terms of economic indicators, the Commerce Department reported that the US economy grew 3.50% over the previous year, up from the 3.30% expected by economists. In addition, private consumption (which contributes more than two-thirds to economic activity) increased by 4%, the May increase since the fourth quarter of 2014), above the expected 3.30%. GDP-related inflation stood at 1.70%, compared with 2.10% expected by economists. On the other hand, the consumer confidence index measured by the University of Michigan reached 98.6 in October, against the expected 99.0.
Stock Markets – Closing Note - 29 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
After a week of heavy losses, the first day of the week was positive for European stock markets. The decision by the Standard & Poor’s agency to reduce only the outlook (perspective) of Italy’s debt rather than its rating attenuates the risks associated with Italian fiscal policy in the short term. Italian banks today recorded considerable appreciations (over 3.60%). The automobile sector was responsible for part of the gains, having registered a valuation around the 2.90%. Companies like Volkswagen and Daimler rose more than 5 percent, boosted by Bloomberg news that China will reduce the tax burden associated with buying cars by 50 percent. Banks also lived a positive day, benefiting from some results. HSBC appreciated 5.80%, after having reported a profit before tax of 5922 M.USD (28% compared to the same quarter of 2017) and a banking product of 13798 M.USD (6.32%). These results, which surpassed the forecasts, were due in part to an aggressive but efficient cost cut.
The US market started its session on the rise, fueled by the news about IBM and the performance of the banking industry. IBM declined 3.16% after the company announced that it launched a takeover bid for Red Hat for 34,000 M.USD ($ 190 per share compared to Friday’s price of $ 116.68). Red Hat is one of the world’s leading experts in enterprise software, particularly in the hybrid cloud concept (based on a person’s or company’s own cloud interaction with a publicly accessible cloud). However, gains were however hampered by the negative behavior of some technology companies such as Amazon and Netflix. On the macroeconomic front, in September, household income increased by 0.20%, compared to the estimated 0.40%, while spending rose 0.40% in line with expectations. Inflation associated with consumption stood at 2%, also according to economists’ projections.
Stock Markets – Closing Note - 30 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets reversed to negative terrain in the afternoon, with virtually all sectors in negative territory. Leading losses were the producers of raw materials as well as businesses related to travel and leisure. Lufthansa reported quarterly results lower than forecasts, leading to significant losses (-7.76%). BNP Paribas shares fell 2.80% after the bank’s quarterly accounts showed that trading income remains under pressure. On the contrary, the BP oil company appreciated around 2% after reporting quarterly profit more than doubled in the three months ending September. Volkswagen also gained ground, after reporting a quarterly profit of 2700 M.€ (145% on the homologous quarter of 2017) compared to the estimated 2290 M.€. In addition to the business results, attention was also focused on US-China trade relations, after it was reported that the Trump Administration was considering increasing the tariffs of 257,000 M.USD of Chinese products that had not yet undergone a worsening of the customs fee if the next meeting between the American President and the Chinese President (scheduled for November G20) is inconclusive. Regarding the macroeconomic scenario, inflation in Germany was published in October, which has risen more than expected, putting inflation at the highest level of the last decade, at 2.50%. At the same time, it was announced that in the third quarter the Eurozone grew 1.70%, the slowest pace since the end of 2014.
General Electric’s results have disappointed the market, with the stock retracted to the lowest since July 2009. The company has announced a dividend reduction of $ 0.01 per share and said it will split the power unit into two new units. IBM also lost ground after UBS lowered its target price from $ 180 to $ 150. Meanwhile, Apple shares rose 0.28 percent on the day the Cupertino company introduced a new version of the Mac Mini, which it calls “the longest ever upgrade” of the device. In terms of economic indicators, and on the real estate market, house prices increased by 5.49% year-on-year, the lowest annual growth in the last 20 months. Estimates pointed to 5.80%. Consumer confidence in October, as measured by the Conference Board, reached 137.9, the high of the last 18 years, compared to the expected 135.9.
Stock Markets – Closing Note - 31 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stock markets ended higher in a session in which several sectors of activity closed with valuations above 2%. Of note are the gains of raw material producers, oil companies and the technology sector. As for the reaction of investors to the published results, Sanofi rose 4.67%, after the French pharmaceutical announced higher than expected profits and improved guidance. Also in Paris, L’Oreal appreciated 6.87%, after having released quarterly sales higher than those presented last year. In Madrid, Repsol reported results in line with the estimate and Fitch improved the company’s outlook from Stable to Positive, while Telefonica posted higher-than-expected earnings improved its outlook for results for 2018. Both companies recorded considerable appreciations. On the macroeconomic front, inflation in the Eurozone accelerated to 2.20% in October from 2.10% in the previous month and expected by economists.
Wall Street traded higher, recovering part of the losses recorded during the month of October. General Motors and Yum! Brands were favored by their superior results. Coca-Cola also reported quarterly results above expectations, but its shares were now slightly losing. In the technology sector, Facebook was up more than 3.50%, after yesterday after closing reported its results and have informed that its margins should stop decreasing after 2019. Today’s session was also boosted by employment data. The ADP Employment Report revealed that 227,000 jobs were created in the private sector, up from 187,000 expected. Also revealed was the Chicago PMI economic activity index which stood at 58.4, below the estimated 60.0.
Stock Markets – Closing Note - 1 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The main European indexes were divided between gains and losses, pressured by the sharp fall in oil prices in the international markets. Despite this, they managed to close mostly and slightly higher, continuing a certain recovery after having experienced the worst month since January 2016 in October.
Interest rates in euro countries are rising, with the exception of Italy, in a scenario marked by uncertainty surrounding Brexit. The 10-year Italian debt rate is easing 5.2 basis points to 3.376%, moving away from the 3.6% peak reached when the European Commission cut Italy’s budget.
On Wall Street, one could assist to an upward inflection. This after the US president assured this Thursday on Twitter that negotiations with China are “on track”.
Stock Markets – Closing Note - 2 Nov
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The positive sentiment triggered by the expectation of an agreement between the US and China encouraged investors in this last session of the week. The day was also marked by investors’ reaction to Apple’s results. Companies such as STMicroelectronics and Infineon, suppliers to the Cupertino multinational, were ultimately more influenced by positive sentiment in the markets than by Apple’s behavior. In addition, the banking sector has also been in the spotlight, the day the European regulator will release the results of stress tests. More particularly, the results of Italian banks should be more scrutinized (since the beginning of the year, Italian banks’ shares have lost 22% and 34% since their April high). At the end of today’s session, Unicredit, Intensa Sanpaolo, BPM Banking and Unione Banche Italiane ended up with considerable gains.
The North American market opened up, favored by the expectation around the G20 meeting that will take place in Buenos Aires between November 30 and December 1. Donald Trump announced yesterday by tweet that he had talked on the phone with his Chinese counterpart and that the negotiations between the respective countries “are going very well”. This telephone conversation precedes the aforementioned bilateral meeting. However, moods were fading after news today that members of the government have said that there is still no indication of an agreement between the two countries and that it may take longer to be achieved. Thus, at the close of European markets, the Wall Street trend was already negative. On the other hand, initial optimism was also fueled by employment data. The US Department of Labor revealed that during the month of October 250,000 were created, above the estimated 200,000. The unemployment rate stood at 3.70%, the lowest level of the last 49 years. In addition, wage growth accelerated from the previous 2.80% to 3.10%, the largest increase since April 2009. In the business plan, today’s highlight goes to Apple that was devalued, after yesterday after closing the company has reported the results. Revenue and EPS outperformed analysts’ forecasts, but Outlook (outlook) for the fourth quarter (usually the highest-grossing quarter of sales since it includes the Holiday Season) fell short of expectations. Apple expects next-quarter revenues to be between 89,000 M.USD and 93,000 M.USD, compared to 92700 estimated by analyst consensus. In addition, the company reported that it will stop reporting on the number of iPhones sales, a fact that was closely monitored by analysts, so the reaction to this announcement was not the best.
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.
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.
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.
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.
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.
