Market's evolution 10 of October to 14 of October 2016

Market's evolution 10 of October to 14 of October 2016


The new company results season captured the attention of investors in the US during the last week, as well as the publication of the FOMC’s minutes.

In the writing, the organization referred to the strength of the labor market and the low unemployment levels. The members from the FED began to warn of a change in the strategy carried out so far in order to avoid an overheating of the economy. So in recent polls, the probability of a rate hike rose up to the 80%. As far as other economic factors, we highlight the upturn in producer prices and retail sales (+0,3% and +0,5% respectively from previous data of + 0% and -0,2%).

At the close of the US trading floors, the cuts were widespread of -1,48% in the Nasdaq Composite (at levels of 5.214) and -0,96% in the S&P500 (now around the 2.132).

No relevant factors to highlight in Europe. The main focus remained in the UK waiting to see the evolution of his departure from the European Union and to anticipate the consequences that it could have. By the moment, the rating agency Standard & Poor's announced on Friday evening that the pound could stop appearing as a reserve currency; a factor that could be detrimental to their debt levels due to a depreciation of the currency. Consequently, members from the BOE talked down this matter announcing that they saw no limit on the levels of monetary policy.

In the background, a restructuring of the Greek debt discussion reappeared, for which the European Union called for the full participation of the IMF, which will present an analysis of the country's debt before Christmas.

Regarding macroeconomic evolution was positive as well. Exports in Germany went up by a +5,4% and levels of wholesale prices stood at +0,4% from the +0,3% forecasted.

The European indices closed flat being the IBEX 35 the selective that starred the biggest increase (+1,67%) up to 8.767. The STOXX50 remained at levels of 3.025 (+0,80%), while the DAX did around the 10.580.

Unlike in the United States, in Japan new expansionary measures are expected to be implemented after the recent statements made by Kuroda. Price levels continued with the downward pressure (-3,2%). As far as for China is concerned, a rise in price levels surprised the market, easing deflationary expectations worldwide. However, the Hang Seng ended the week with cuts of -2,60%

At the sectoral level, we include further falls of -4,6% in the shares belonging to the biotechnology sector and the health sector -3%. In contrast, Utilities were the only sector that closed in positive with increases of +1%.

As for commodities, a barrel of Brent remained below resistance levels located at 52 USD/Brent. The reason is found in doubts about the final production levels after Iran, Iraq, Nigeria and Libya decided not freeze their production levels.

Regarding the currency, dollar advances (2%), so that the pair stood at levels of 1,0969 EUR/USD anticipating further rate hikes in the United States.