Market's evolution 12 of September to 16 of September 2016

Market's evolution 12 of September to 16 of September 2016

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Stock markets closed in negative territory due to the growing doubts about the ability of Central Banks to boost growth levels.

In this context, we emphasize the statements made by the German finance minister who warned of an sluggish in German growth rates for the second half of the year. In the same vein, the British Chamber of Commerce decided to cut growth forecasts up to +1,8% for 2016, adding that the UK will fall into a recession in 2017. Also, the discussion of a possible bailout in Portugal was reopened again according to the high budget deficit and the insufficient capitalization in the Portuguese banking.

Macroeconomic data released was not helpful since there has been a decline in confidence in the European economy, and a drop of -1,1% in production levels. Similarly, we haven’t noticed blips in price levels and labor costs yet.

Within this background, the Bank of England decided to keep benchmark rates unchanged at +0,25% and the QE program unchanged after the Monetary Policy Committee that took place.

The evolution of European markets has been generally negative, since setbacks made were up to -4,34% in the Spanish selective IBEX 35 (now trading around the 8.633) and -3,86% in the STOXX50, what led the index to lose the psychological level of 3.000. As for currency, the common currency gained ground to the sterling; a +1,35% (now trading around the 0,8578 EUR/GBP), while the dollar gained ground to the euro, marking advances of 0,70% (and closing at levels of the 1,1153 EUR/USD).

From the United States, we have been following closely the US elections, which is increasingly attracting more prominence in the international arena. Similarly did the disparate statements by members of the Fed referring to future rate decisions. Leaving aside the distant views of members of the Federal Reserve, the reality is that despite maintaining the minimum level of low unemployment, sales does not seem to evolve as expected and there are no signs of blips in price levels.

However, the week ended with widespread advances; being of +2,31% in the Nasdaq Composite (now at levels of 5.244), while the S&P500 closed around the 2.139.

However, more optimistic data for Japan after posting higher levels of growth than expected for the second quarter (at +0,2%) and a rebound in the leading indicator of Japan's economy. Similarly, developments in China were positive after having soften the fall in exports (being the fall in August of -2.8% from the -4% expected) and set new blips in service leading indicators up to 52,1 (data indicating expansive levels).

Stock markets, however, closed with cuts of -2,63% dropping to the 16.519 in the case of the Nikkei225.

As for commodities, the loser of the week has been the barrel of Brent with cuts of -4,67% after the lower growth forecast posted for oil demand for this year (now trading levels and 45 USD/Brent).