Anchor resume from 7 to 14 of July 2017
Saturday, 15 of July 2017
The second quarter earnings season on the US stock markets has been started with pleasant surprises. Among them, we highlight the BPAs published by the financial services company JP Morgan after publishing earnings per share of 1,82 USD, surpassing the forecasts of 1,57 USD. During the next week we will closely follow the focus of business results, since they will have a direct effect on the markets. Blackrock, Netflix and Unilever are some of the references we will have during the week, we remember that the expected profit spikes are at +7%.
All the eyes have been focused on Janet Yellen throughout the week. Her appearance on Wednesday before the US Congress grabbed market attention, pending for further details on the FED's downsizing or upcoming rate hikes. In fact, the effect of her words had a direct impact in the markets. The IRRs turned lower, while the selective ones made new advances after the president of the Federal Reserve adopted a more moderated tone in its comments.
"The Fed continues to expect that the evolution of the economy will justify the gradual increase in the long-term federal funds rate," or "The Fed does not need to go much further to achieve neutrality" were some examples where investors lowered Expectations about the normalization of rates in the economy.
On the contrary, the news that pointed to Donald Trump for having obtained aid from Russia to win the elections with damaging information of Hillary Clinton weighed the markets down. Nor was the macroeconomic data too positive; Retail sales continued to contract at -0.2% during the month of June compared to the +0.1% expected, and consumer prices continued to show no new inflationary signs after reaching + 0% in relation to the +0,1% expected.
In the Euro Zone, economic developments continued to show improvements with monthly production rates up by +1.3% compared to forecasts of + .1% and a rebound in German exports of +1,4%. The monthly consumer price index was forecasted to be at +0.2%. Also, as pointed out in the monthly report of the German Ministry of Economy, both private consumption, construction and foreign trade are expected to be the main drivers for accelerating growth.
However, the latest rebound in Italian public debt to record highs of +2.28 biillion Euros raised concerns in the region. So we will be attentive to the evolution and possible comments made by economic partners of the region.
Another focus of attention was placed in the negotiations of the United Kingdom with the Eurozone since it was not possible to reach an approach between the different positions. The European Union provided a bill to the UK, which the Foreign Minister called extortionate to the large sum of money proposed to demand the English country. As for some of the credit rating agencies like Moody's, they announced ratings cuts if in the end the Brexit takes a hard tone. Standard & Poor's, for its part, ruled out the possibility that the BOE normalizes rates before 2019 in anticipation of an economic slowdown caused by the Brexit process.
From Asia the week took a somewhat calmer record in the face of the scarcity of references, even so, the data published was not exactly positive. Industrial production rates in Japan continued to contract at -3.6% from the expected -3.3%, while production prices remained at +0%, so the Yen continued to increase declines To the Euro.
As for commodity markets, Barrel of Brent saw slight gains ahead of the OPEC survey, which predicts increases in global oil demand by 2018. Daily demand for barrels of Crude will rise to 1.26 million barrels compared to 1.27 million barrels in 2017.