Market's evolution 19 of October to 23 of October 2015
Monday, 26 of October 2015
Immersed in the publication of the corporate results in the US, during the last week several European companies started to disclose their quarterly earnings. As catalyst of the market acted the ECB meeting that took place on Thursday and the publication of macro data, of which we highlight the leading indicators of production.
Mario Draghi's statements after the ECB meeting, had a positive effect on financial markets equity after announcing that it is possible to carry out an expansion of the QE in case necessary. He also mentioned that the forecasts for the euro area recovery remain positive despite the weak external demand and the deteriorating growth and inflation. Rates remained unchanged and there were no changes in the program of quantitative easing although equity markets began to discount future increases.
In the US, there were a large number of companies that beat earnings forecasts made by the consensus of analysts following recent cuts of the same. The possibility of rises of the interest rates remained as a present issue in the markets and the point of view of the analysts are increasingly diverse. As for economic data, we must highlight the good manufacturing data published for October, it showed further declines in requests for unemployment and increases in sales of previously owned homes. These good data could favorably affect the decision of interest rates taken by the FED.
In Japan, published data concerning industrial activity and trade balance were below expectations, which could indicate a deterioration in the level of activity in the manufacturing sector. Despite this, in Japanese securities markets progress was made after deducting the government could carry out new stimulus measures for the economy.
China remains concerned about the slowing economy and although there was an improvement in the quarterly GDP estimates and respect the previous data, the index of industrial production continued showing the decline in activity in the region.
In the equity market we stand out Ferrari’s debut on the stock market and good corporate results in the US. There were rallies in the major global selectives which reached advances up to a +6,60% in the case of German Dax which closed at levels of the 10.794. In the US, the progress was more moderate between +2% for the S&P500 and +4% in the selective Nasdaq100.
The setbacks observed in the euro correspond to Draghi's dovish statements which were interpreted in the markets as a sign of further quantitative easing. This had a negative effect, affecting the price of the EUR and causing declines of a -3% for the EUR/USD.
In the commodities market it’s important to take into account the reduction in the target price provided by the World Bank for the oil to 52 USD/Brent from 57 USD/Brent. The trend for raw materials remained negative and suffered cuts of -5% in its price closing at 48 USD/Brent.