Anchor Resume 23 to 27 of January 2017

Anchor Resume 23 to 27 of January 2017


Again, were the statements and policies announced by the US President Donald Trump the motor of the market during the last sessions. The elected president decided to sign an executive order that prohibits to travel from 7 Muslim-majority countries such as Iran, Iraq and Syria to the United States. We had as well the meeting with Theresa May during Friday, very attentive to the agreements that could reach or the comments made in reference to Brexit. Finally, as expected, both showed confidence about reaching bilateral trade agreements and Trump was optimistic about the benefits to Brexit for the United Kingdom.

The speech of the American president maintained the nationalistic tone, which increased the fear of a commercial war at world-wide level. The last one was the announcement of the exit from the TPP (Trans-Pacific Agreement of Economic Cooperation) and the annulment of the meeting with the Mexican president before the refusal of the country to pay the wall. In response, Donald Trump announced that a 20% tariff would be imposed on all products from Mexico.

The markets applauded the latest developments, so the Dow Jones managed to break the 20.000 barrier to a new all-time high after advancing + 1.34%. As for the rest of the selectives, new advances were also noted; the technological Nasdaq Composite near the +2% and the S&P500 +1%, closing at 5.660 and 2.294 respectively.

As for the publication of results, those surprised positively with an average of the EPS of +4,65% and with 72% of the companies surpassing forecasts.

From Europe, every time there are more members from the ECB in favor of reducing the bond purchase program. Regarding the publication of macroeconomic data, despite the fact that the most recent data on economic activity was lower than expected, the expansionary rates remained at 54,3 current vs. the 54,5 expected.

We knew as well the decision of the Supreme Court on the effectiveness of Brexit, which decided to delegate to Parliament that election, which pushed down the pound. However, the weekly closure has been positive for the English currency, now trading around the 0.8533 EUR/GBP.

Regarding Equity securities, at the beginning of the week we identified a strong pull in the Spanish Ibex-35 index supported by the good results published by the Banco Santander. However, the trend was reversed due to the negative effect of provisions related to floor clauses in the accounts published by Banco Sabadell. The weekly balance was mixed, with moderate gains in the Ibex-35, which closed around the 9.504 (+1,32%) and the DAX-30 (now around 11.814 with an increase of +1,58% ), While the CAC-40 closed flat with slight cuts around the 4,839 (-0,22%).

We expect that the headlines of the US president to continue to directly affect the Asian continent. The yen closed the week at 115,06 EUR/JPY without significant changes. The selectives made advances of +2% in the Hang Seng (now at 23.360) and +1,72% in the Nikkei-225 (closing around 19.467), benefited by the recent rebound in exports (of +5,5% compared to the +1,1% expected), which benefited the trade balance. Likewise, we identified improvements in the leading index of the Japanese economy.

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Jan 30

Anchor Research

Markets from 23 to 27 of January 2017