Market's evolution 11 of April to 15 of April 2016
Monday, 18 of April 2016
With the view set at the meeting that took place last Sunday at Doha, Friday's session closed with slight corrections in the equity markets and the crude. Finally, there were no agreements, so that today’s session started with major cuts (-5%) in the price of Brent.
Since the European Union continued showing signs of weakness in the economy; countries like Spain kept violating the agreed requirements on deficit to GDP, Greece again in eye of the storm due to the proximity of debt maturities and the omission of the required conditions, as well as the cuts of growth forecasts in Germany (among others). Those are some of the factors that could threaten the continuity of the group in a context characterized by the inability to create inflation, weak growth, and the growing disagreement among member countries.
In the United States during this week the season of publication of quarterly results was started with Alcoa disappointing the market after posting lower results than those anticipated by the consensus. However, the outlook announced surprised upwards. As for the vision reflected by the Fed after the publication of the Beige Book, reporting positive growth differentiating some of the districts and the positive effect of consumption was highlighted, improving the manufacturing sector and the rise in wages was highlighted. In contrast, among the weekly macroeconomic data we have noticed declines in both retail sales and price levels.
New signs of improvement in the Chinese economy following the rise of +6,8% in industrial production as well as the great improving made of the export levels which have presented a growth of +11,5% from the previous data. Conversely, data about Chinese debt levels would be worrying since the financial sector’s debt would amount a total of +260% of GDP of the country.
In the equity markets, the good tone was widespread, especially in Europe and Asia. Meanwhile in Asia the Nikkei225 rallied +6,50% and closed around the 16.850, in Europe however, the rallies were of +5% in the IBEX 35 (now at 8.850 levels) in the DAX and the EUROSTOXX50 (closing at 10.050 and 3.050 respectively).
In the United States, advances made were approximately of +1,7% weighed down by weak macro data releases. The selective technological Nasdaq Composite closed at 4.938 levels, while the S&P500 did around the 2.080, below the resistance located in the 2.092.
The price of Brent fluctuated throughout the week featuring high levels of volatility in anticipation of a new agreement following the meeting in Doha. Conversely, it failed to establish a pact to reduce production, so the markets opened this morning with important cuts.
As for currency, both the euro and the pound they rebounded from lows recovering some lost ground in recent weeks. The EUR/USD stood at 1,128 levels while the EUR/GBP did around the 0,794.