CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Market evolution

___MarketEvolution5

October 4, 2019

Asia’s shares show weakness ahead of US employment report

Asian equities remained relatively weak on Friday, October 4, as investors await the release of September’s Non-Farm Payrolls data.

Hong Kong’s Hang Seng index dropped 0.54% amid reports that the city government is willing to discuss a possible emergency regulation to ban masks worn by protesters. The besieged city has been shaken during weeks of protests that have degenerated into violence.

In Japan, the Nikkei 225 recovered from its previous downfall. In South Korea, the Kospi rose slightly as the shares of Samsung Electronics and chip maker SK Hynix each increased by at least 1%.

Australia’s S&P/ASX 200 was up 0.42%, with the shares of biotech company CSL up 2.97%. Australian retail sales in August were lower than expected, but higher than the previous month.

The ISM nonmanufacturing index, which is a key measure of the services sector, was below expectations on Thursday. This followed the poor ISM manufacturing index, which shows that the sector is in contraction. While the latest economic data reflects a downtrend, it is possible that eventually the economy will not go into recession if the Fed reacts in time.

The Fed is scheduled to meet later this month. Last month, the central bank cut rates for the second time in 2019. For now, the bad news is good because with it further rate cuts are expected.

Market views on whether the Fed needs to cut interest rates are divided. The dollar won’t fall sharply as not everyone thinks the Fed will cut interest rates this month.

The dollar declined after a U.S. services sector survey raised concerns about the pressure of U.S. trade disputes with China and other countries. Against the Yen, the Dollar weakened.

The euro, which had been negatively influenced by concerns that Germany might fall into recession, rose and broadened its recovery.

The British pound has risen to its weekly high against to the dollar. Traders remain unsure whether Johnson’s proposal on the Irish border can be transformed into a final divorce settlement, given contradictory messages from both sides.

Oil futures rose during Friday’s Asian session, but are on their way to a big weekly loss for fear that slower global economic growth will hurt fuel demand. Saudi Arabia has announced that it has already fully restored oil production after the recent attacks.

The weakness of the U.S. services sector and data on employment growth add to concerns about a prolonged trade war. As a result, concerns about global oil demand continue to grow.

Gold rose during Asian trading hours for the fourth consecutive session. It does so as U.S. economic data fueled fears of slow growth and investors wait to see if employment data consolidates the Federal Reserve’s expectation of interest rate cuts. Weaker than expected Non-Farm Payroll data will support gold and the momentum is likely to be quite strong.

European markets are expected to open Friday’s trading session higher.

___MarketEvolution7 Technology stocks led the way

U.S. indices rise recovering from sharp decline.

U.S. equities rose on Thursday, October 3, recovering some of the losses after a sharp two-day decline. They do so amid rising expectations that the Federal Reserve will cut interest rates later this month.

Technology stocks led the way. Facebook rose 2.7%, while Alphabet and Amazon gained 1% and 0.7% respectively. Apple closed with a rise of 0.9%.

The S&P 500 has fallen 1.7% so far this week, while the Dow has lost 2.3%. The Nasdaq is headed for a 0.9% weekly decline. However, this could change on Friday, after the US government releases the latest monthly employment report.

Wall Street began Thursday’s session amid an active start to the quarter. The Dow lost more than 800 points in the first two sessions of the quarter after ISM released its weakest manufacturing reading in more than 10 years, triggering concerns of an economic downturn. However, the Fed is scheduled to meet later this month.

Last month, the central bank cut rates for the second time in 2019. For now, the bad news is good because with it further rate cuts are expected.

Optimism has suddenly vanished

After a timid initial rebound attempt on Thursday, October 3, another bad macro data in the U.S., in this case the ISM service sector, rekindles the doubts of investors who do not find arguments for purchases.

The last quarter of the year began with a bullish sign. But optimism has suddenly vanished. Tuesday’s downturns from the worst U.S. manufacturing activity in more than a decade gave way on Thursday to a full sales gale. The setback came to exceed 3% in Europe.

On the eve of the resumption of trade negotiations between the United States and China, markets have been shaken by the possibility that the United States will also impose tariffs of up to 7.5 billion dollars on Europe in retaliation for subsidies to Airbus.

The threat of tariffs to Europe further clouds already weak economic forecasts and reinforces fears of a recession. In addition, the possible motion of censure on Donald Trump and, above all, the countdown on Brexit clouds the forecasts.

After the ultimatum launched by Boris Johnson, Juncker opens up to negotiate his plan for Brexit, but sees some problematic points.

___ContexGen_04oct

UK urges European Union to be flexible and creative

British Brexit Minister Stephen Barclay has defended Boris Johnson’s proposals for exit from the European Union.

At the same time he called on the EU to negotiate with the London Executive.

According to Barclay, it is now up to the European Union to respond and demonstrate whether it can be flexible. The British are now ready to negotiate the details with Brussels.

Britain has put forward serious proposals and clearly needs to have a negotiation to move forward.

The British minister recalled that, for there to be an extension of Brexit that possibility would have to have the backing of all 27 EU members.

Eurozone private sector close to stagnation

The private sector economy in the euro area fell in September to close to stagnation.

Weakness remained centred on the manufacturing sector and the latest data showing that the industrial sector experienced the largest drop in output in almost seven years.

In contrast, the services sector saw a further increase in activity, according to the PMI index released on Thursday.

By country, in Germany the data was in contraction territory, for the first time since April 2013. It was the only country to record a drop in activity compared to August.

However, growth was relatively weak in the rest of the countries surveyed. Italy and France recorded only slight increases in total economic activity, while growth weakened in both Ireland and Spain.

Exports have declined over the last twelve months and the September decline was the strongest since composite export data were first published just over five years ago.

Although total activity levels have changed little, and new orders have fallen, employment growth continued in September.

World Trade Organization authorizes sanctions against Europe

The WTO authorizes the United States to impose tariffs on Europe of $7.5 billion, in compensation for the illegal subsidies that, for years, have been received by the aircraft manufacturer Airbus.

The World Trade Organisation is taking a stand in a long-running dispute that has been going on for 15 years and whose decision adds new uncertainties to the trade war that has been destabilising markets for months.

The European Union has already given assurances that it will act accordingly.

The WTO also ruled at the end of March that the subsidies to Boeing are contrary to international law and will decide at the beginning of next year on the tariffs that Brussels intends to impose in compensation, which will be about 10,000 million dollars.

The US has announced that it will start applying tariffs from 18 October, although on 14 October it will meet with EU negotiators. The levies will be 10% for airplanes and 25% for agricultural products among others.

U.S. private payrolls

The September private payroll report shows that the pace of recruitment is slowing.

The private sector created more jobs than expected in September, but the pace slowed amid growing signs that the labour market is deteriorating, according to a report released Wednesday by ADP.

Companies hired 135,000 workers in September, slightly more than expected. It’s a drop from 157,000 in August.

Due to the fragile economic situation, the situation is becoming critical and what happens in the coming weeks and months will determine whether there is an economic recession in 2020.

Companies with fewer than 50 employees were the slowest to win in hiring, with only 30,000 employees. Large companies, with at least 500 workers, created 67,000 new jobs. Medium-sized companies added 39,000.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution0

October 7, 2019

Asian markets mixed awaiting resumption of trade negotiations

On Monday, October 7, Asian markets were traded in a mixed manner, while investors expected a new round of U.S.-China trade negotiations to begin later this week.

Japan’s Nikkei 225 fell slightly, erasing previous gains. South Korean Kospi traded slightly higher, with Hyundai Motor shares gaining 1.19%. In Australia, the S&P/ASX 200 rose 0.6% as all sectors rose. The movement in Australia was moderate, as some parts of the country are closed for Labour Day holidays. Hong Kong and China markets are closed on Monday for holidays.

U.S. equity markets closed strongly on Friday, October 4, as the latest employment report met expectations. The U.S. economy added 136,000 jobs in September and the unemployment rate fell to 3.5% which is the lowest level in 50 years.

The Yen rose slightly and the Yuan fell on Monday as investors nervously awaited U.S.-China talks. Prior to this week’s trade talks, reports have come in that Chinese officials are increasingly hesitant to seek a trade deal. Risk appetite declined markedly after that news.

The Japanese yen remains strong and is considered a safe haven, given Japan’s status as the world’s largest creditor. As the dollar loses momentum, the euro rises slightly, recovering from a two-and-a-half year low at the beginning of last week.

The pound has varied little amid the uncertainty about the Brexit that keeps many investors on the sidelines. Within weeks of the UK’s planned exit from the European Union on October 31, the British prime minister is looking for significant changes in the way the controversial issue of the Irish border is addressed.

Oil prices fell on Monday, amplifying last week’s heavy losses. Traders fear that the global economic slowdown will affect future growth in oil demand. On the supply side, a faster-than-expected resumption of Saudi Arabian production also exerted downward pressure on oil prices, although the situation in the Middle East remains tense. The headwinds outweigh current oil supply concerns, despite tensions in the Middle East and a reduction in reserve capacity.

Demand for safe havens continues. During Monday’s Asian trading session gold advanced strongly, while investors were cautious about the China-U.S. trade talks after Beijing reported that it is probably not very receptive to a trade agreement with the United States.

European markets are expected to open up Monday’s session.

___MarketEvolution10 Employment report met expectations

Dow rebounds by more than 350 points after employment report.

U.S. equity markets closed strongly on Friday, October 4, as the latest employment report met expectations.

The U.S. economy added 136,000 jobs in September and the unemployment rate fell to 3.5% which is the lowest level in 50 years.

Friday’s employment report was strong enough to allay fears of recession, but lacklustre enough to keep the Fed on track to cut rates again later this month.

Technology was the best sector in the S&P 500, gaining 1.7%, while Apple was up 2.8%. The technology giant’s shares skyrocketed after it was announced that the Company is increasing iPhone 11 production by 10%.

Friday’s gains cut weekly losses on the Dow and the S&P 500, but the two indices remained down for the third consecutive week. Both the Dow and the S&P 500 lost at least 0.3% weekly.

European stock markets were quoted without trend until the publication of employment data

On Friday, October 4, the threat of new tariffs remained in the background due to the importance that the publication of macro data and news on Brexit is acquiring in the last few days.

The US economy has so far shown greater resistance to the slowdown, but the latest signs of slowdown have triggered fears of a recession. The market has begun to discount the possibility of an additional interest rate cut by the Federal Reserve.

However, this possibility has been reduced after the employment data. According to the September report, the U.S. economy created 136,000 jobs, slightly below the 145,000 expected. However, the biggest surprise has been the drop in the unemployment rate to 3.5% which represents the 50-year lows.

It was also known that the British government will ask the European Union for an extension of the exit deadline, scheduled for 31 October, if on the 19th of this month it has not managed to negotiate a withdrawal agreement.

___ContexGen_07oct

Hourly earnings avert danger of inflation in the U.S.

Although the headline may seem worse than expected, it is not really like that, because it is for very little and the revisions of previous months amply compensate.

The sharp drop in workers’ incomes is very important, which suggests that inflation is going to be weaker than previously thought.

The drop in the unemployment figure is striking, much better than expected. This makes it clear that the figure is not bad.

It is a good figure for the stock markets and especially for bonds. For the dollar is not bad either.

Non-agricultural job creation was +136,000 when +140,000 were expected. The revisions of the previous two months rose by +45,000 jobs.

The unemployment rate of 3.5% is much lower than the expected 3.7%.

The average income of workers varies by 0%, when it was expected to be +0.3%. This predicts falling inflation.

Pulling up the markets

This was due to a lower-than-expected unemployment figure.

Revisions in previous months offset the current figure and workers’ incomes are well below expectations.

This is not a great figure, because the figure for job creation has not been very high lately, but it is a better figure than expected.

In addition, many analysts were commenting that, because of the indicators previously known from the ISM, the employment figure could be much worse.

Will the ECB be even more accommodating under Lagarde?

The future president of the European Central Bank, Christine Lagarde, will take over the monetary authority from November.

She will face a truly complex situation. Issues such as Brexit, the economic slowdown, the recession in Germany, the commercial battle with the United States, the weakness of the banking sector, instability on the stock markets and the financial markets will have their weight in the management to follow.

Mrs Lagarde’s profile is markedly political and can be seen by investors as an incentive to expect her to act in support of the financial markets.

Lagarde has defended on several occasions the benefits of zero interest rates, or negative ones, and has also clearly reiterated that he considers fiscal relaxation to be a primary need in Europe.

On 4 September, before the European Parliament, she anticipated the main guidelines that she will follow during her term of office: the challenges that justify the ECB’s current policy have not disappeared. A highly accommodating policy is justified for an extended period. The ECB needs to listen to and understand the markets.

The massive intervention of central bankers in the markets has promoted the creation of a debt exchange that offers negative interest rates and although the authorities try to expose the benefits of negative rates, the truth is different.

Negative rates generate a sense of unrealistic stability and security, distort risk assessment, damage margins, ordinary business and bank accounts. In addition, they encourage the creation of Zombie companies, confiscate the retribution to savings, reduce the purchasing capacity of pensioners and reduce consumption capacity.

Boris Johnson will ask for an extension if there is no agreement by October 19

The British government has confirmed that its prime minister will ask the European Union for an extension of Brexit if he has not managed to conclude an agreement by 19 October.

He has done so in a document presented in a Scottish court, which recognises the Prime Minister’s commitment to send a letter to Brussels to extend the deadline for the UK’s departure from the community club.

According to that document, it would do so if it did not manage to bring its positions closer to those of the EU-27 before the European Union summit, which will be held on 17 and 18 October.

Johnson has presented this week his proposal on the border with Ireland, in search of an agreement with Brussels that avoids the hard Brexit.

Until now he maintained that the United Kingdom would leave the European Union on 31 October no matter what. However, legislation passed by the British Parliament a few weeks ago, which obliged Johnson to request an extension if there was no agreement by the middle of this month, appears to have borne fruit.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

1 Like

___MarketEvolution1

October 8, 2019

Asian markets move ahead of U.S.-China trade talks

Asian markets rose on Tuesday, October 8, with the main indices of Japan, South Korea, China and Hong Kong trading higher.

Chinese markets reopened after a week-long holiday. The Shanghai composite rose 0.54%. The Nikkei 225 in Japan rose 1.03%. South Korea’s Kospi index rose by 1.03%, while Samsung shares rose by 1.05%. In Hong Kong the Hang Seng index rose by 0.98%. Australia’s ASX 200 index recorded a 0.5% gain, with most sectors advancing.

On Monday, October 7, U.S. equities fell slightly, with investors waiting for the U.S.-China trade talks to begin later this week. Any real change or progress is unlikely, but if the talks are positive they will be a catalyst for the market.

The dollar was unchanged from a basket of major currencies as traders await U.S.-China trade talks. Indications of a solution to the prolonged trade war are expected, even though the chances of reaching an agreement seem slim.

Hedge funds have added massive US dollar positions, which rose in the last week to a nine-week high. Renewed concern over the trade war put pressure on trade-oriented currencies such as the Australian dollar.

The pound fell against the dollar as investors are increasingly concerned that Britain and the European Union are no closer to reaching an agreement on the Brexit.

Oil prices ended on Monday without major changes. Oil futures contracts ended last week with a decline of more than 5% after disappointing manufacturing data from the U.S. and China, and amid fears of recession in global economies.

On the supply side, anti-government riots have affected Iraq, the second largest producer of the Organization of Petroleum Exporting Countries. The riots helped raise oil prices by 1% earlier in the day. Iraq’s oil exports of 3.43 million barrels per day from Basra terminals could be disrupted if instability continues.

Gold fell, but remained within a narrow range. It does so as investors were wary of the US Federal Reserve minutes and this week’s trade talks. Last week was quite bullish for gold.

European markets are expected to open mixed on Tuesday.

___MarketEvolution8 Trade war is beginning to be very negative

Stock market falls as traders doubt trade agreement.

All indications are that Chinese officials are increasingly reluctant to accept President Trump’s wide-ranging trade agreement.

On Monday, October 7, U.S. stocks fell slightly, with investors waiting for U.S.-China trade talks to begin later this week. Any real change or progress is unlikely, but if the talks are positive they will be a catalyst for the market.

Wall Street entered Monday’s session after the Dow and the S&P 500 had their third consecutive weekly decline, after a series of disappointing U.S. economic data suggested that the trade war is beginning to be very negative for the economy.

The main European indices have noted outstanding increases

On Monday, October 7, the German DAX gained 0.6%. The French CAC has risen by 0.5% and the Italian MIB by 0.7%.

The Portuguese PSI reacted to the election result with an advance of 0.3%, after the socialist victory in the elections held on Sunday. In it the current Prime Minister Costa was only ten seats away from achieving an absolute majority.

The European stock markets have started the week with generalized increases, encouraged by the resumption of trade negotiations between the United States and China. The first contacts are scheduled for October 10 and 11 in Washington and are preceded by the controversy that has unleashed the threat of new U.S. tariffs to Europe.

The European economy has once again given signs of concern that have led to a beginning of a bearish day for the continent’s squares. Industrial orders in Germany in August fell by 0.6%. This is twice what analysts expected and they again highlight the slowdown in growth.

___ContexGen_08oct

China reluctant to agree a comprehensive trade agreement and restart talks

Chinese officials are increasingly reluctant to reach a comprehensive trade agreement with the United States in negotiations to begin on Thursday.

Deputy Prime Minister Liu He, who will lead negotiations for China, told dignitaries that his offer to the United States will not include commitments on Chinese industrial policy reform or government subsidies. These were some of the main demands of the Trump administration.

The trade talks are taking place at the same time Trump faces an impeachment investigation. The White House says this is not affecting negotiations with China.

U.S. officials are planning some restrictions on U.S. investments in China, including possibly blocking all financial investments in Chinese companies.

Climate change protests in central London

Demonstrators blocked traffic through the government district of Westminster in London. They threaten two weeks of peaceful civil disobedience to call for urgent action to reduce carbon emissions.

‘Climate change denies our children a future unless we act now.’

Some activists hit or chained themselves to cars parked in the middle of the streets or to streetlights, making it difficult for police officers to stop them. However, police said they had arrested 135 activists from the Extinction Rebellion group.

The group expects 10,000 people to come to the capital from all over Britain to join the protest.

This demand is part of a coordinated international movement. On Monday there were similar protests in Berlin, Vienna, Amsterdam, Madrid and other cities around the world.

German industrial orders fall twice as much as expected

German industrial orders fell again last August as a result of weak domestic demand.

They showed a decline of 0.6% in comparison with July and 6.7% in comparison with the same month in 2018.

This decline is double what analysts expected. Last July, German manufacturing orders had fallen by 2.1% per month and 5% year-on-year.

Orders from the euro zone grew by 1.5% and those from other countries by 0.4% compared to July 2019.

Brussels insists Johnson’s plan for Brexit needs changes

The European Commission insisted that the plan to reach an agreement on Brexit, presented last week by the British Prime Minister, is not acceptable because it does not meet European requirements on Ireland.

The EU urges the UK to provide more details.

Solutions that work now are needed, not something based on untested arrangements that are renegotiated during the transitional period. There are still important questions about the UK’s Brexit proposals and more realism and clarity is needed.

The proposal put forward last week by Johnson does not currently meet the conditions laid down in the safeguard for Ireland, the purpose of which is to prevent the lifting of a border between Northern Ireland and the Republic of Ireland.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution2

October 9, 2019

Shares in Asia fall amid trade uncertainty

Asia’s shares were trading lower on Wednesday, October 9, amid growing uncertainty over U.S.-China trade negotiations.

Mainland Chinese equities fell at the end of the session. Hong Kong’s Hang Seng index fell 0.68%, while Chinese technology giant Tencent’s shares fell 1.24%. The Nikkei 225 in Japan lost 0.64%. South Korean markets were closed on Wednesday for holidays.

US equities fell on Tuesday, October 8, as hopes for progress in trade negotiations were dashed by a report saying Washington is making progress in its efforts to limit capital flows to China and by the inclusion of some of China’s top companies on the blacklist.

The United States also imposed visa restrictions on Chinese negotiators on Tuesday for detention or abuse of Muslim minorities. Beijing is now threatening to derail the already delicate trade negotiations.

The pound sterling recorded losses on Wednesday, after hitting a month-long low, when it was reported that talks between Britain and the European Union were on the verge of breaking down. In a phone call, German Chancellor Angela Merkel told British Prime Minister Boris Johnson that an agreement is highly unlikely.

The dollar weakened slightly due to rising trade tensions. The Japanese yen, the safe-haven currency, rose sharply.

Oil prices fell for the third consecutive time on Wednesday, as the prospect of a U.S.-China deal fades. This increases uncertainty about global economic growth and demand for oil. In addition, there has been a higher than expected growth in U.S. reserves.

Gold held steady as hopes of progress in U.S.-China trade negotiations undermined risk appetite. Markets are now watching for clues about the US Federal Reserve’s monetary easing. With the Fed’s latest measures, the inflow of funds to gold-backed ETFs is expected to continue. This will probably cause precious metal prices to rise.

European markets are expected to open Wednesday’s trading session lower.

___MarketEvolution8 Fragile investor sentiment

U.S. markets fall as tensions rise just before trade negotiations.

U.S. shares fell on Tuesday, October 8, as hopes for progress in trade negotiations were dashed by a report saying Washington is making progress in its efforts to limit capital flows to China and by the inclusion of some of China’s top companies on the blacklist.

The Dow Jones Industrial Average fell 0.87%. The S&P 500 fell 1.09%. The Nasdaq Composite fell 1.12%. Despite the declines, indices traded above last week’s lows.

The main sectors of the S&P 500 were trading lower and 28 of the 30 components of the Dow Jones index were in negative territory.

Developments influenced fragile investor sentiment. It weighed a report from the South China Morning Post stating that China had lowered its expectations and that the Chinese delegation could leave a day ahead of schedule.

European shares close down because of trade negotiations

European markets fell on Tuesday 8 October as hopes for a positive outcome in US-China trade talks fade.

The Stoxx 600 pan-European index fell 0.97% at the close and the construction, retail and travel sectors fell more than 1.7%. The main stock exchanges were quoted in red.

The pound depreciated sharply against the dollar on Tuesday morning after several British media reported that the Brexit talks were about to break down. In fact, there was a clash between Merkel and Tusk with Johnson.

Published data showed a surprising increase in German industrial production in August, suggesting that Europe’s largest economy could avoid a recession.

___ContexGen_09oct

Pound weakens quickly after Merkel-Johnson shock

The pound loses ground after news of the Angela Merkel-Boris Johnson standoff broke.

The German president has thrown a jug of cold water on hopes that the European Union will bow to London’s proposals to reformulate the Brexit agreement by October 31.

Merkel appears to have told Johnson that an agreement is overwhelmingly unlikely, leaving the process at a standstill.

The last glimmer of hope has faded and the chances of an orderly exit are fading, mainly because of the position on Ireland.

The future of Brexit remains profoundly uncertain

The President of the European Council, Donald Tusk, has addressed a harsh message to Johnson, through his personal Twitter account…

‘What’s at stake isn’t winning a blame game. The future of Europe and the future of the United Kingdom is at stake, as is the security and interests of our people. You don’t want a deal, you don’t want an extension, you don’t want to revoke, quo vadis?’

With only 23 days until the UK leaves the European Union, the future of Brexit remains profoundly uncertain. Both London and Brussels are looking for ways to avoid being the culprits in the event that Brexit is delayed or ends without an agreement.

European Union leaders reacted coldly to the British prime minister’s last-minute proposals to break the deadlock.

Johnson prepares for a collapse of the talks and would blame the leaders of Ireland and the European Union, according to a message from one of the prime minister’s officials.

It seems that continuing to negotiate is no longer helpful and the most likely outcome is that there will be no agreement.

According to the new law, passed by the British Parliament, in this situation the United Kingdom would have to ask for a postponement.

Germany’s industrial production unexpectedly rebounds in August

Germany’s industrial production grew in August compared to the previous month, exceeding market consensus expectations.

Excluding energy, it rose by 0.7%.

Intermediate goods production increased by 1% and capital goods production grew by 1.1%.

Production of consumer goods fell by 1.7% and activity in the construction sector fell by 1.5%.

In the annual comparison, German factory output fell by 4%, worsening by a tenth the year-on-year decline of 3.9% observed in July.

Japan’s exports and imports fall in August

Exports fell by 8.6% year-on-year to 6.08 trillion yen.

Imports fell by 12.7% to 6.03 trillion yen.

Japan recorded a current account surplus in August, marking its 62nd month followed by a surplus.

The Japanese trade balance had a surplus of 50.9 billion yen. It is a positive balance that contrasts with the deficit of 74,500 recorded in the previous month.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution3

October 10, 2019

Main Asian markets recover after new concessions to Huawei

The main Asian stock markets recovered from previous lows and traded higher on Thursday, October 10. They do so as investors watch developments on the commercial front.

The New York Times reported that the Trump Administration is willing to grant licenses allowing U.S. companies to sell non-sensitive supplies to Chinese giant Huawei.

Mainland China’s shares rose at the end of the session. Hong Kong’s Hang Seng index rose slightly. The Nikkei 225 in Japan also rose. In South Korea, Kospi lost 0.97% and Australia’s S&P/ASX 200 fell 0.22%.

On Wednesday, October 9, the U.S. stock market rose sharply after more details were released about this week’s trading talks. The good news is that the Chinese have not cancelled their visit yet.

The U.S. and China have made no progress between Monday and Tuesday in the trade talks. The Chinese delegation apparently plans to leave Washington on Thursday rather than Friday as previously planned.

Regarding the Federal Reserve minutes released Wednesday, the market may expect more interest rate cuts than the Fed can offer. The minutes showed that trade was the main concern. The issue got 28 mentions in the document and members repeatedly expressed concern about the impact tariffs are having on business.

The Chinese yuan, the currency most sensitive to trade warfare, reached its maximum of two weeks. It gained 0.3% in the middle of the session and raised the Australian dollar and the New Zealand dollar, which are currencies highly exposed to trade relations.

The Japanese yen, which had had a strong boost against the dollar, gave up its gains to end up down in the Asian session.

The pound rose against the dollar, although it remains close to its monthly low and is affected by uncertainty over the Brexit. Hopes for progress in the UK-EU negotiations have been dashed.

Oil prices fell in the Asian session on Thursday, due to concerns about lower demand for fuel. The trade dispute between the world’s two largest economies has disrupted global supply chains and slowed the growth of both countries, limiting the growth of their fuel consumption.

During Thursday’s Asian trading, gold reached a one-week high, while the expectation of a possible breakthrough in the negotiations has been diminished. This situation is benefiting the demand for gold bullion.

European markets are expected to open Thursday’s trading session higher.

___MarketEvolution7 Apple shares contributed to rises

U.S. Indices rise after China Is open to partial agreement.

U.S. equities rose sharply on Wednesday, October 9, after more details about this week’s trading talks were released.

The Dow Jones Industrial Average rose 0.4%. The S&P 500 rose 0.5% and the Nasdaq Composite rose 0.7%.

Apple shares contributed to these general increases, appreciating 0.6% after Canaccord Genuity raised its target price to $260 per share.

It is harder to imagine an S&P 500 at levels similar to those of October 2020 without a trade agreement, greater confidence in global economic growth and better corporate results.

European shares close tightly amid renewed optimism over trade negotiations

The European shares closed on Wednesday 9 October with rises, following the announcement that China is willing to discuss a partial trade agreement.

The Stoxx 600 pan-European index closed 0.4% higher as the automotive and technology sectors led the gains. All other sectors, except utilities and retail, were in a positive position.

UK Prime Minister Boris Johnson faces a possible mutiny within his own cabinet, fearing an exit from the European Union without an agreement.

The pound sterling skyrocketed on Wednesday, after it became known that the European Union is prepared to grant Northern Ireland the possibility of any trade agreement in the coming years. However, the rise came to a halt when the EU measure was rejected by the Democratic Unionist Party of Northern Ireland.

IMF warns that economic slowdown by trade war threatens an entire generation

The new director of the International Monetary Fund notes that the global economy has entered a phase of synchronized slowdown that may require a coordinated fiscal response.

‘Synchronized deceleration’. ‘Coordinated fiscal response’. ‘Trade war taking its toll’.

Kristalina Georgieva would probably have preferred to throw less grey messages in her first speech at the head of the International Monetary Fund. However, the scenario she faces as head of one of the world’s leading economic bodies does not leave much room for optimism.

Georgieva has assured that the synchronized slowdown affects nearly 90% of countries and will cause growth to fall this year at its lowest rate since the beginning of the decade.

Ireland’s Prime Minister finds it very difficult to reach agreement on Brexit

Irish Prime Minister Leo Varadkar admitted that he sees it as very difficult for the UK and the EU to reach an agreement on Brexit before 31st October.

Leo Varadkar stressed that there are large gaps between the two sides, although he acknowledged that he will work until the last moment to achieve a pact, although not at any price.

Negotiations between London and Brussels are now on the brink of collapse, after the British government admitted on Tuesday that it sees it as essentially impossible to reach an agreement in a negotiated form before 31 October.

OECD wants Google tax to be applied where there are users

The OECD proposes large digital companies, as well as those offering final services, pay part of their taxes in the countries where their users are located, even if they do not have a physical presence there.

This is one of the newest elements of the Organisation for Economic Co-operation and Development’s initiative, presented this Wednesday to establish fairer international tax rules that respect competition.

The alternatives focus on three blocks of countries: a block led by the United Kingdom and other European countries. Another bloc made up of the United States and China. The third bloc would include India, Colombia and other developing states.

Faced with the challenges posed by a digital economy, in which many companies do business without having a physical presence in each country, for the OECD what is fundamental is that States can demand the payment of taxes from the moment any company obtains income in their territory.

Eurogroup appoints Fabio Panetta to replace Benoît Coueré in ECB directive

Fabio Panetta, deputy governor of the Bank of Italy, has been nominated by the Eurogroup economics and finance ministers to replace Benoît Coueré of France on the executive board of the European Central Bank.

The nomination will be formally adopted by the Council of Economic Ministers of the entire European Union. The Heads of State and Government will have to confirm their appointment at the summit on 17 and 18 October next.

Before ratification, the ECB and the European Parliament will have to pronounce on their suitability for the post, although their opinion is not binding and the final decision depends on all countries.

With his appointment, Italy will manage to maintain a seat on the executive board of the European issuer after the departure of Mario Draghi.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution4

October 11, 2019

Asian markets advance amid trade optimism

Shares in Asia traded higher on Friday, October 11, amid positive developments in the U.S.-China trade war.

Mainland Chinese equities rose at mid-session. Hong Kong’s Hang Seng index rose by 2.19%. Australia’s S&P/ASX 200 traded 0.82% higher.

The Nikkei 225 in Japan appreciated by 1.11% and in South Korea the Kospi rose by 1.07%. Tokyo and Seoul are expected to meet on Friday in Geneva to discuss their dispute over Japan’s export controls on materials critical to South Korea’s technology sector.

American shares rose on Thursday, October 10, after Donald Trump said he would meet with Chinese Vice Premier Liu on Friday. This raises hopes that the two countries can make progress on the trade front.

Hopes for progress in U.S.-China trade talks and Europe’s optimistic comments on Brexit pushed the yen back as a safe-haven currency and revaluated the pound sterling and the euro. The Japanese yen fell against the dollar after falling 0.45% the day before.

The British pound hit a two-week high against the U.S. dollar and recorded its highest daily percentage gain in seven months. The pound also rose to a two-week high against the EUR. The euro also gained against the dollar. The Chinese yuan remained bullish, trading at 7.105 yuan per dollar, reaching a three-week high.

Oil prices rose in Friday’s Asian session, increasing gains from the previous session, after OPEC hinted that it will make more supply cuts and optimism about US-China talks. On Thursday, Mohammad Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries, said all options are on the table, including further supply cuts to balance oil markets. A decision will be taken at a meeting between OPEC and its partners in December.

Gold remained stable in Friday’s Asian session, moving in a narrow range as investors expect more clarity on global uncertainty. In addition, the dollar, which has become an alternative refuge during the trade war, has weakened against its rivals and this favours the purchase of gold.

European markets are expected to open up Friday’s trading session.

___MarketEvolution7 Trump’s tweet was the latest headline

The Dow rises more than 100 points after a Trump tweet.

American shares rose on Thursday, October 10, after Donald Trump said he would meet with Chinese Vice Premier Liu on Friday. This raises hopes that the two countries can make progress on the trade front.

Caterpillar was the best performing Dow with a 2.7% rise. Apple shares were up 1.4%. Morgan Stanley, Goldman Sachs and J.P. Morgan Chase each advanced more than 1%.

Trump’s tweet was the latest headline after a series of contradictory reports: ‘Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.’

European markets are watching the evolution of trade negotiations

European shares rose on Thursday, 10 October, in a very active session. There is a context of geopolitical tensions in the midst of the long history of negotiations between China and the United States.

The Stoxx 600 pan-European index traded slightly higher after fluctuating for much of the session. Commodities led the gains with a rise of 2.5%. Meanwhile, the health care sector was down 0.8%.

The meeting between UK and EU Brexit negotiators has been delayed until Friday, after the EU demanded more concessions from Boris Johnson if a last-minute deal is to be reached.

UK GDP data, released on Thursday, outperformed expectations and rose by 0.3% in the three months leading up to August. July growth was revised upwards from 0.3% to 0.4%. These figures put Britain on track to avoid a recession in the third quarter.

___ContexGen_11oct

The market expects more

According to the minutes of the last meeting, the market may expect more interest rate cuts than the Federal Reserve can offer.

The Fed’s minutes showed that only a few members supported more aid to the economy for future meetings.

It may be necessary for the Committee to seek a better alignment with market expectations regarding the trajectory of interest rates.

The minutes showed that trade is the main concern. The issue received 28 mentions in the document and members repeatedly expressed concern about the impact that tariffs are having on business.

Eurozone budget to set aside 20% of its funds to help countries in crisis

The eurozone budget, which the finance ministers agreed on early Thursday morning, will set aside a maximum of 20% of its funds to help countries face a crisis situation.

The remaining 80% of the funds will be distributed among the Nineteen, according to their population and taking into account the per capita GDP of each partner.

The Competitiveness and Convergence Budget will help euro countries implement structural reforms and investments that follow the eurogroup’s recommendations.

Each country will have to contribute 25% of the funds required for each project, but this percentage could be reduced by half in the case of severe economic circumstances.

The European Union reformulates its list of tax havens

The ministers of Economy and Finance of the European Union approved the removal of Costa Rica, Switzerland and the United Arab Emirates from their lists of tax havens.

The United Arab Emirates, as well as the Marshall Islands, will be removed from the blacklist after having approved the necessary reforms to implement the commitments they had made on their fiscal policies.

While the Emirates has complied with all the European Union’s requirements, the Marshall Islands will move to the so-called grey list, which includes countries that have yet to make changes.

In particular, the EU will monitor whether the island country complies with international requirements on transparency and exchange of tax information.

From this grey list come Switzerland, Costa Rica, Albania, Serbia and the Mauritius Islands, which have implemented all the reforms necessary to comply with the criteria of good fiscal governance before the established deadlines.

After the changes adopted, nine jurisdictions remain on the blacklist: American Samoa, Belize, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, the United States Virgin Islands and Vanuatu.

United States plans to license companies to sell products to Huawei

The U.S. government plans to soon issue licenses to U.S. companies to sell certain goods to the Chinese technology giant.

Huawei is the world’s largest telecommunications equipment manufacturer and a major player in next-generation mobile networks, known as 5G.

It is considered critical to China’s ambitions that the Company become a dominant player in 5G networks.

Earlier this year, the United States blacklisted the world’s largest telecommunications equipment manufacturer and restricted its ability to do business with U.S. companies.

Huawei has been accused of being a national security risk by Washington, which alleged that its equipment could be used to send secret data to China. The Company has repeatedly denied these allegations.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

1 Like

___MarketEvolution5

October 14, 2019

Asian markets were bullish as investor confidence improved

Asia-Pacific markets rose on Monday, October 14, as investor sentiment improved following last week’s high-level U.S.-China trade negotiations.

Mainland Chinese markets rose, with Shanghai composite on the rise by 1.38%. China’s import and export figures in September were worse than expected. Hong Kong’s Hang Seng index rose by 1.03%. In Australia, the ASX 200 index rose 0.62%, while the financial sub-index gained 0.75%. The country’s four largest banks advanced. The Tokyo market was closed on Monday as it was a public holiday, so trading volume is lower than usual.

In South Korea, the Kospi index rose by 1.35% with the main chip manufacturers, Samsung and SK Hynix, rising by 1.93% and 1.25% respectively. Last week, Samsung announced earnings forecasts for the third quarter at a slightly better level than observers predicted, leading some analysts to suggest that business conditions in the semiconductor sector may be slowly improving.

US equities rose on Friday, October 11, after the US president said that China and the US reached the first phase of a substantial trade agreement that delays the first tariff hikes.

On Monday, the U.S. dollar held near its two-and-a-half month high against the yen after Washington and Beijing announced progress toward a trade agreement. The pound sterling remained close to the three-month high against the dollar, hoping for Britain’s orderly exit from the European Union. The euro traded at $1.1025.

On Monday, oil prices barely changed amid renewed geopolitical tensions in the Middle East and while the US-China trade war improved investor sentiment. On Friday there was an attack on an Iranian oil tanker off the coast of Saudi Arabia in the Red Sea. Investigations are underway to determine whether the ship was hit by missiles, which could increase tensions between Tehran and Riyadh.

On Monday in Asia, gold fell for the third day in a row. Optimism about trade talks increased risk appetite, while a slight rise in the dollar also influenced prices. Gold is not moving on fundamentals, but rather on a commercial basis.

European markets are expected to open mixed on Monday.

___MarketEvolution10 China and United States reached an agreement

Dow jumps 300 points after Trump says there’s a phased trade agreement with China
U.S. equities rose on Friday, October 11, after the U.S. president said China and the United States reached the first phase of a substantial trade agreement that delays the first tariff increases.

Trump said after meeting with Liu He on Friday that the first phase of the trade agreement will be drafted in the next three weeks. The major indices peaked in the session with this comment and the Dow then climbed more than 500 points.

As part of this phase, China will buy between $40 billion and $50 billion in U.S. agricultural products. Trump also said the deal also includes currencies. In exchange, the United States agreed to postpone the tariff increases that were to take effect Tuesday.

Treasury Secretary Steven Mnuchin said both sides reached near-complete agreement on foreign exchange and financial services issues. The second phase of the agreement will begin immediately.

Shares such as Facebook, Amazon and Alphabet earned at least 0.5%. Bank of America and JP Morgan Chase each rose more than 1.6%. Apple jumped 3%.

European shares close with force after the agreements between China and the United States and optimism about Brexit

The Stoxx 600 pan-European index closed with a rise of more than 2% on Friday 11th October with an increase in bank shares of around 5%. Most sectors and all major stock exchanges were listed on positive territory.

The British pound gained nearly 2% against the dollar from the previous session after a European Union spokesman described the latest talks with the UK as constructive.

JP Morgan said on Friday that it had raised its chances of a Brexit deal to 50%.

___ContexGen_14oct

Struggle for IPOs could trigger another wave of sales

Founders, employees, and first investors who buy shares before a company goes public generally cannot sell between 90 and 180 days after the company is listed.

Uber, Pinterest, Zoom and others are approaching the maturity date, between mid-October and the end of the year.

An avalanche of sales could weigh on the initial public offerings that are already in difficulties. They could also dissuade other companies from entering public markets this year.

The shares of 30 companies, which were recently made public, are interesting to enter ‘short’ them as this phenomenon has an impact on the price of shares.

The real version of the commercial conversations

Reduced trade agreement, stalled talks and a fluid situation are just some of the conflicting reports that have emerged throughout the week with the official resumption of US-China trade talks.

For investors who read every headline in the news, things can be confusing. However, there are certain signs that investors should focus on in the coming days to see if the talks are moving forward.

First, there is the CNBC 'China Trade Index, which tracks the companies with the highest exposure to China’s revenues and the highest volume of imports from China.

Investors can monitor these stocks, which Wall Street analysts said have the most to gain or lose in the progress of operations. Their prices will be the first to move.

In addition, Goldman Sachs selected companies, members of the Russell 1000 Index, with a high exposure to China. They will also have to be followed.

These elements are far more reliable than the politicians’ war of declarations.

Apple helps with Hong Kong protests

Apple removed a Hong Kong map application from its App Store after Chinese state media said it endangered law enforcement officials in the face of pro-democracy protests in Hong Kong.

Apple said it eliminated mapping because it has been used in ways that endanger law enforcement and Hong Kong residents and has been used to attack and ambush police.

Apple also removed the Quartz application, citing content that is illegal in China. Quartz has been covering pro-democracy protests in Hong Kong extensively.

Apple said it had been in contact with Hong Kong’s Office of Cybersecurity and Technology Crime and added that Chinese authorities told it that the Quartz application did not comply with local laws.

This is not the first time Apple has had to respond to requests from the Chinese. Apple is concerned it may be allowing censorship and surveillance of the Internet by the Chinese government.

Despite major changes customization will dominate the financial advisory space in the future

Where is the future of financial advice headed? The answers always seem to be full of risks and uncertainties.

While the stock market has contributed greatly to helping the advisory industry recover from the financial crisis, technology, demographics and regulatory turmoil continue to challenge every corner of the industry.

What will happen when advisors’ clients transfer their wealth to children who want nothing to do with mom and dad’s financial advisor?

Why pay a counselor a fee when you can build a personalized, online investment portfolio for a fraction of the cost?

How will the industry manage when thousands of boomers’ advisors retire in the next decade?

Despite all the concerns that seem to plague the consulting business, one thing seems certain: the demand for financial advice is and will remain strong.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

1 Like

___MarketEvolution0

October 15, 2019

Asian markets showed a mixed tone as investors remain cautious about the partial trade agreement

Asia-Pacific markets were cautiously traded on Tuesday, October 15, after the previous day’s rally, as new doubts arise over the partial U.S.-China trade agreement.

Mainland Chinese markets fell early in the session. Pork prices in China rose by about 69% year-on-year in September due to continued shortages following an outbreak of African swine fever.

Hong Kong’s Hang Seng index traded almost unchanged. Australia’s ASX 200 fluctuated between gains and losses and changed little from the previous day’s levels. In South Korea, the Kospi index rose slightly. The Japanese Nikkei 225 rose by 1.76% on Tuesday, after Japanese markets closed on Monday for a holiday.

U.S. equities closed on Monday, October 14, with a slight decline, as new concerns about the U.S.-China trade agreement arose.

The U.S. dollar hit a two-and-a-half month high against the Japanese yen. Optimism about trade negotiations, and the possibility of an orderly exit of the British from Europe, make it possible that the global economic crisis does not extend as far as expected. The pound last traded at $1.2611 and remains stable.

The European currency remained stable against the U.S. dollar from Friday’s highs. The Chinese yuan remained relatively firm against the dollar, one day after reaching a two-month high.

The Australian dollar and New Zealand kiwi struggled to gain momentum, while traders remain uncertain about US-China negotiations, and Australian policymakers again signaled their willingness to cut interest rates if necessary.

Oil prices fell again on Tuesday, after having fallen sharply in the previous session. Weak Chinese economic data in September added to persistent concerns about the viability of the U.S.-China trade agreement. These doubts weigh on the weak sentiment of traders and doubts persist about global oil demand.

During Tuesday’s Asian session gold remained stable, while markets are now preparing for talks between Britain and the European Union, which will determine what Britain’s exit from the bloc will look like.

European markets are expected to open mixed on Tuesday.

___MarketEvolution8 China wants to have additional trade talks

U.S. stocks decline as doubts over trade agreement arise.

U.S. equities closed on Monday, October 14, with a slight fall, as new concerns about the U.S.-China trade agreement arose.

It appears that China wants to have additional trade talks before signing what President Trump called a very substantial agreement in its first phase on Friday. It is not clear whether the additional talks will take place in Beijing or Washington.

Monday’s moves followed the upturn in shares in the previous session.

Investors are also preparing for the start of the earnings season. Tuesday’s major bank reports will be released. Citigroup, Goldman Sachs, JP Morgan Chase and Wells Fargo plan to release their results first.

European shares close down because the details of the mini trade agreement are imprecise

European equities closed down on Monday, October 14, with traders following the evolution of a crucial week for Brexit. In addition, the details of the partial US-China trade agreement remained unclear.

The pan-European Stoxx 600 closed at around 0.5% and core equities fell more than 2%. Almost all sectors and major stock exchanges traded in negative territory.

Investors are monitoring a great week for Brexit. The Queen’s speech at the official opening of the British Parliament on Monday outlined the UK government’s plans.

The UK and the EU remain divided on customs issues and seek to reach an exit agreement before the October 31 deadline.

___ContexGen_15oct

According to Luis de Guindos the ECB’s low rates have benefited most households

The vice-president of the European Central Bank, Luis de Guindos, defended that the monetary policy deployed by the Agency in recent years has benefited the majority of households and has not contributed to an increase in inequality.

Guindos criticized the fact that the debate on the expansive stance of monetary policy is sometimes caricatured by interpreting savers as losers and winners as borrowers.

In his view, it is a simplistic reading because it ignores the other channels through which monetary policy affects household wealth, including its indirect impact on income and employment.

Guindos said an internal ECB study recognizes that low interest rates hurt savers by reducing the remuneration of savings, but considers that this effect is mitigated and rewarded by the indirect effect of the reactivation of the economy.

Morgan Stanley warns that tariff escalation remains a significant risk

Morgan Stanley says President Trump’s partial trade agreement with China is, at best, an uncertain agreement. In fact, there does not appear to be a viable way to reduce existing tariffs at this time.

The United States agreed to suspend a tariff increase of at least $250 billion on Chinese products set for Tuesday.

However, the tariff increase implemented in September was not reversed and plans for another increase just before the Christmas holidays remain in place.

Without a lasting mechanism to solve the problem another round of tariff increases cannot be ruled out.

There is still no viable way to reduce existing tariffs and tariff escalation remains a significant risk. This means that no significant upturn is expected to boost global growth expectations.

China’s exports and imports shrink sharply as tariffs are felt

The fall in Chinese exports accelerated in September, while imports contracted for the fifth consecutive month. This points to further weakness in the economy and underscores the need for greater stimulus as the trade war between China and the United States continues.

Analysts say it could take time for Chinese exports to recover, given the slowdown in global growth, despite timid signs of a thaw in tense trade relations between the world’s two largest economies.

Despite the mini-agreement reached, existing tariffs remain in force and officials on both sides said much more work was needed.

September’s exports fell by 3.2% over the previous year. It is the biggest drop since February.

Nobel Prize in Economics 2019

The 2019 Nobel Prize in Economics goes to the Indian Abhijit Banerjee, the French Esther Duflot and the American Michael Kremer.

The Bank of Sweden awards them for their studies on poverty reduction.

The award was officially created in 1968 as the ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’.

Effective action against poverty…

Abhijit Banerjee and Esther Duflo are two of the founders in 2003 of the Abdul Latif Jameel Poverty Action Laboratory (J-PAL).

Promote the application of so-called randomized trial methods, similar to those used in the testing of new drugs and vaccines, in the development of aid.

The aim is to reduce poverty by ensuring that policies against it are based on scientific evidence.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution1

October 16, 2019

Asia-Pacific stocks soar amid hopes for Brexit and while South Korea cuts interest rates

Asia-Pacific markets rose on Wednesday 16 October, following positive news about Brexit.

Mainland Chinese equities rose at the beginning of the session, with a 0.44% increase in Shanghai composite. Japan’s Nikkei 225 was up 1.56% early on. All sectors did well, with the best being the automotive, technology and retail sectors. Australia’s S&P/ASX 200 was up 1.07%. The financial sub-index here improved by 1.42%.

In South Korea, the Kospi rose by 0.61%. The Central Bank of South Korea cut its interest rates for the second time in three months, as expected, after its first cut in July.

U.S. equities traded sharply higher on Tuesday, October 15, as the corporate earnings season got off to a good start.

The pound dropped from its highest level in almost five months against the dollar, erasing some of the rally caused by signs that Britain is approaching an agreement to leave the European Union. The British pound also fell from its highest level in five months against the euro, with investors waiting for the UK-EU summit between Thursday and Friday.

In Asia the yuan falls, after Beijing complained about new US legislation that takes a hard line against repression of pro-democracy protests in Hong Kong.

The Japanese yen advanced slightly against the US dollar, surpassing its two-month lows. The yen also rose against the British pound and the Australian dollar.

Oil prices rose on Wednesday, following the evolution of equities. Investors hoped for a possible agreement on Brexit and signals from OPEC, and its allies, that there could be more restrictions on supply. However, progress remains limited due to persistent concerns about the global economic slowdown.

In Wednesday’s Asian session, gold rose sharply, after falling close to 1% in the previous session where it was unclear whether Britain would reach a good deal by October 31.

European markets are expected to open mixed on Wednesday.

___MarketEvolution8 Good start results season

Dow up 300 points as JP Morgan and UnitedHealth begin results season.

U.S. stocks rose sharply on Tuesday, October 15, as the corporate earnings season got off to a good start.

JP Morgan Chase stocks rose 3.3% after third-quarter numbers exceeded analysts’ expectations. The Company’s revenues also hit a record, driven by mortgage loans and car purchases, along with credit cards.

UnitedHealth, another Dow member, announced a quarterly gain that exceeded analysts’ expectations. The Company’s results were driven by increased pharmaceutical profits. UnitedHealth also improved its earnings outlook for the full year and its stocks were up 8.5%.

However, analysts expect the S&P 500 earnings to fall by 4.6% annually.

According to Ed Yardeni of Yardeni Research, these expectations may be too low as analysts tend to focus on the pessimistic side in the weeks leading up to the results season.

That attitude is quite a strategy, as then the actual results exceed expectations and the stock markets rise.

EU negotiator says agreement on Brexit remains possible and pound rises

European shares rose on Tuesday 15 October, after EU negotiator Michel Barnier said an agreement on Brexit is still possible this week.

The Stoxx 600 pan-European index rose by 1.2% at the end of the session. All sectors traded on positive territory.

Most major stock exchanges were trading higher and only the UK FTSE opposed the general trend.

Barnier said in Luxembourg that the teams are working hard. Meetings have been intense over the weekend and on Monday. Although the agreement will be difficult, it is still possible to reach it this week.

The British pound rose more than 1% against the dollar in the face of this news.

___ContexGen_16oct

China’s CPI has its biggest rise since 2013

China’s consumer price index rose 3% year-on-year in September. That’s two tenths more than in the previous two months.

The main protagonists of this year-on-year increase were food, which rose by 11.2%. Meat was the protagonist and rose 46.9% year-on-year.

Pork, one of the products most demanded by Chinese consumers, rose 69.3% as its production has been reduced by the epidemic of African swine fever.

The data offered are in line with the objectives of the Chinese government, which in March set an increase in inflation of around 3% as a target for this year.

Growing frustration among EU finance ministers

The German Finance Minister has said that the EU and the UK have a common responsibility to negotiate an agreement to achieve Britain’s orderly exit from Europe.

However, he insisted that any solution to end the impasse in the coming days must meet the criteria of the European Union.

Boris Johnson’s recent proposals are not acceptable if they have an effect on the single market and the customs union. Former British Prime Minister Theresa May is missed in these negotiations.

With less than a month to go before the Brexit deadline, the possibility of a disorderly exit remains an imminent threat that will affect, above all, several EU nations that have close trade relations with the UK.

British Pound reaches four-month high

The pound sterling rose sharply against the dollar, following comments by European negotiator Michel Barnier who said a legal draft divorce was being drafted.

Barnier also said that any agreement must work for everyone and it is time for good intentions to become a legal text.

In this way the pound sterling advanced strongly and reached $1.275 in the early afternoon.

The value of the shares of banks and homebuilders listed on the UK stock exchange also rose sharply.

eToro launches portfolio that invests according to investor sentiment on Twitter

The social investment platform eToro has launched a portfolio that invests according to investor sentiment on Twitter.

Named The TIE-LongOnly CopyPortfolio, it is algorithm-driven and is an import of a data analysis platform that evaluates 850 million tweets daily.

It studies the positive and negative tones of social network conversations.

The original strategy of The TIE-LongOnly portfolio, which was launched in October 2017, has generated an average annualized return of 123%.

In traditional markets, retail investors have historically lagged behind smart money. This puts individual investors at a great disadvantage.

Providing institutional-level tools to individual investors will level the playing field and democratize investment.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution2

October 17, 2019

Asia session Follows Uncertain Situation in U.S. and Europe

Shares in Hong Kong rose on Thursday, October 17, while those in the rest of Asia were mixed after a confusing situation in the U.S. and Europe.

The Hong Kong legislature held a question-and-answer session with the city leader. As Carrie Lam tried to speak, pro-democracy legislators shouted at her repeatedly before they were expelled from the Legislative Council Chamber. The meeting was briefly adjourned, before Lam re-entered the room in a second attempt to conduct the session as scheduled.

The Hang Seng index rose 0.65% as developers’ shares rose after city leader Carrie Lam on Wednesday announced measures to alleviate housing shortages and calm anti-government protests.

Mainland Chinese markets were mixed. The Japanese Nikkei 225 rose slightly. South Korean Kospi was down slightly. In Australia, the ASX 200 fell, while the materials sector was down 1.33%.

U.S. equities fell slightly on Wednesday, October 16, as weak retail sales data, coupled with persistent fears about the trade war, offset good business results.

The Chinese yuan weakened slightly to 7.0975 per US dollar. The U.S. dollar fell sharply after disappointing U.S.-China trade data was released. The British pound is weakening as Britain and the European Union strive for a last-minute Brexit deal. Now Sterling falls as Northern Irish party says it cannot support Brexit deal as things stand.

The Australian dollar rose against the U.S. dollar after data showed employment data improved. This reduced the chances of a possible monetary easing during the month of November.

Crude oil prices fell during Thursday’s Asian session after strong business results. Crude oil inventories in the United States soared by 10.5 million barrels in the week leading up to October 11, according to the weekly report from the American Petroleum Institute (API). Rising inventories come at the wrong time, just when markets are too focused on fears of a possible global decline in demand.

During Thursday’s Asian trading, gold lost ground, while traders refrained from making major bets on the lack of new developments on the commercial front. Gold has broken multiple resistance levels in recent times and now you see some correction. However, weak global data confirms concerns about the global economic slowdown, which is providing some support for the safe-haven metal.

European markets are expected to open mixed on Thursday.

___MarketEvolution7 Weak retail sales data

U.S. equities plummet as weak retail sales offset good corporate results.

U.S. equities fell slightly on Wednesday, October 16, as weak retail sales data, coupled with persistent fears of the trade war, offset good business results.

Retail sales unexpectedly fell 0.3% in September, marking their first decline in seven months. Cuts in motor vehicle spending and online shopping, among other factors, weighed on retail sales. With the U.S. consumer accounting for 68% of the economy, it is important that consumers continue to spend.

Weak data added to recent concerns about the possibility of a recession. Global economic data points to slower growth, while the U.S. manufacturing sector is already contracting.

At the heart of those concerns is the ongoing U.S.-China trade war, which is becoming increasingly uncertain.

European shares close unchanged as Brexit negotiations continue

European shares were negotiated without much change on Wednesday 16 October, while an agreement on Brexit seems imminent.

The pan-European Stoxx 600 has slightly reduced initial losses, ending the session only 0.05% below the flat line. Financial services were down 0.9% and car equities were up 1.6%.

Negotiations on Brexit were halted on Wednesday. This was the last day of talks before a crucial EU summit.

Some reports said that talks had stalled on a future trade agreement and competition clauses.
Irish Prime Minister Leo Varadkar confirmed that disagreements over Northern Ireland’s relationship with the bloc have yet to be resolved.

___ContexGen_17oct

Trade war outweighs results

Doubts about the trade truce between the United States and China continue to weigh on investors, who are not fully confident that a written pact will finally be signed in the coming weeks.

The protests in Hong Kong, for example, are another point of friction between the world’s two biggest powers.

One of the highlights of the day, September retail sales, was well below expectations. This reinforces the Federal Reserve’s forecast to lower interest rates at its end-of-month meeting. This would be the third consecutive cut made by the central bank, given the economic slowdown caused by the trade war.

In Europe, negotiations between Brussels and the United Kingdom continue. There is now a feeling that an agreement is possible, as Boris Johnson’s allies in Northern Ireland (DUP) have accepted the plan proposed by the British government.

IMF warns that corporate debt could skyrocket to $19 trillion

The International Monetary Fund has warned that vulnerabilities in the corporate sector are at high levels due to the increase in the debt burden and the deterioration in the ability to pay.

According to the IMF, should there be a substantial economic slowdown, even half the severity of the 2008 crisis, the debt of companies whose revenues are insufficient to cover interest payments could rise to $19 trillion.

This is equivalent to almost 40 per cent of the total corporate debt of the major economies and a higher percentage than during the crisis.

The IMF says that an accommodative monetary policy is necessary, but also warns of the risks of a prolonged period of low rates.

The Fund warns that vulnerabilities of non-bank financial institutions are high in 80% of systemically important economies. That percentage is similar to the level reached during the height of the global financial crisis.

Eurozone inflation falls two-tenths in September

The year-on-year inflation rate in the eurozone fell two tenths in September to 0.8% compared to the previous month.

A year earlier, inflation in euro countries stood at 2.1%.

With regard to the year-on-year inflation rate for the European Union as a whole, it also fell by two tenths in September to 1.2%, whereas a year earlier it had risen to 2.2%.

The weakest annual rates were recorded in Cyprus, Portugal and Greece.

On the other hand the highest rates were seen in Romania, Slovakia and Hungary.

U.S. retail sales unexpectedly decline

U.S. retail sales fell for the first time in seven months during September.

The U.S. Department of Commerce has said that retail sales fell 0.3% last month and households drastically reduced spending on building materials, online shopping and automobiles.

While this is by no means conclusive proof that consumers are hesitating in the current situation, it reinforces concerns that a reduction in spending will ultimately trigger a longer-lasting slowdown.

The strength of the US consumer has supported Trump, who has argued that the economy is strong despite the trade war with China.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

___MarketEvolution3

October 18, 2019

Mainland China’s stock falls as growth weakens more than expected

Mainland China’s stock falls on Friday, October 18, as growth weakens more than expected in the country.

Most Asia-Pacific markets fell on Friday morning as China released worse-than-expected gross domestic product figures. Its protracted trade dispute with the United States continues to affect growth.

Mainland Chinese markets fell after the release of the data. Australia’s S&P/ASX 200 fell 0.60%. All four major banks recorded losses: National Australia Bank fell 0.76%, Commonwealth Bank lost 1.02, ANZ fell 1.04% and Westpac fell 1.17%. In Japan, the Nikkei 225 resisted the general trend and rose. Meanwhile, the South Korean Kospi fell slightly.

American equities rose on Thursday, October 17, after good results from companies such as Netflix and Morgan Stanley. Investors also digested news that the European Union and the UK have reached an agreement on Brexit, although it is doubtful whether it will get enough support in the British Parliament.

The pound reached a five-month high against the dollar and the euro after the British prime minister and European Union leaders agreed to a new agreement for Britain to leave the bloc in an orderly fashion.

The yuan remained stable against the dollar, after data showed that China’s economy grew at the weakest pace in more than 27 years in the third quarter due to the costly trade war with the United States and weak industrial production. Friday’s data marked a new loss of momentum for the Chinese economy, which is likely to raise expectations that Beijing will have to take steps to avoid a more pronounced slowdown.

Oil prices fell on Friday after China, the world’s largest oil importer, recorded its weakest quarter of economic growth in nearly three decades. Growth in demand for crude tends to be highly correlated with economic growth. Refinery yields in September rose by 9.4% over the previous year.

Gold prices remained stable on Friday, after Britain managed to close a deal for its exit from the European Union. This increases investors’ appetite for risk, while a weak dollar also provides support for the precious metal.

European markets are expected to open Friday’s trading session lower.

___MarketEvolution7 Companies reporting exceeded expectations

U.S. stocks rise on strong Netflix and Morgan Stanley gains.

U.S. stocks rose on Thursday, October 17, after good results from companies such as Netflix and Morgan Stanley. Investors also digested news that the European Union and the UK have reached an agreement on the Brexit.

Netflix shares rose 2.5% after it posted earnings that exceeded analysts’ expectations. The Company reported a larger-than-expected increase in international paying subscribers, which mitigated a large loss of subscribers in the United States.

Morgan Stanley was also boosted by its quarterly figures, closing 1% higher. The bank’s results were driven by higher-than-expected trading and advisory revenues.

Overall, the performance season has got off to a good start. More than 78% of S&P 500 companies reporting exceeded analysts’ expectations.

European markets on hold as British lawmakers question agreement

The European shares abandoned their gains on Thursday 17 October as British lawmakers questioned the draft Brexit agreement between the UK and the European Union.

The pan-European Stoxx 600 closed slightly higher, with health care and financial services stocks at the forefront. Food and beverages suffered the largest losses.

The European stock index had initially risen by 0.7% after British Prime Minister Boris Johnson declared on Twitter that a new deal had been reached. This information was later confirmed by the President of the European Commission, Jean-Claude Juncker.

The pound reached a five-month high after the announcements, but dropped again late in the afternoon when doubts arose as to whether Johnson will be able to get the agreement approved in the vote in the British Parliament on Saturday.

The Democratic Unionist Party (DUP) key ally of Johnson’s government confirmed, in a statement on Thursday, that it will vote against the agreement.

On the other hand, the European Central Bank plans to fully implement a major stimulus package, despite disagreements in its Governing Council over the decision to make the measure public.

Agreement on Brexit to be ratified by Parliament on Saturday

After long days of negotiations, London and Brussels have reported that they have reached an agreement for the United Kingdom to leave the European Union amicably.

It is the least traumatic scenario of all those who shuffled after the decision of the British to leave the European club.

Jean-Claude Juncker, President of the European Commission, has indicated on Twitter that this is a fair and balanced agreement for the European Union and the United Kingdom.

True to his style of communication, he said that ‘where there is desire, there is agreement’.

The agreement comes after three years of tough negotiations.

According to Boris Johnson a great deal has been reached that allows the UK to take control again

Michel Barnier, the Brexit negotiator for the European Union, has assured us that it has been a very tough and long negotiation.

Brexit has been a school of patience’.

He also assured that some of the major points of friction had been resolved. He was certainly referring to Northern Ireland.

The rate of VAT to be applied in Northern Ireland and the situation of this territory in relation to the rest of Great Britain has been clarified.

Even if Johnson tries to convey a message of success he knows he has a serious problem

Representatives of the Unionist Party of Northern Ireland (DUP), partners in the conservative government, have stated that ‘as things stand they cannot support the Brexit agreement’.

Boris Johnson has had to make important concessions to achieve the deal with Brussels. These include accepting that Northern Ireland remain in the European common market and that it be regulated by the European Court of Justice.

According to the draft document, the SPD will not be able to veto any of the agreements between London and the EU in the next eight years.

These measures keep Northern Ireland close to the European Union. It was something that the SPD wanted to avoid at all costs. Its aim is to have the same regulation as the other regions in the UK.

There will therefore be no physical border between the Republic of Ireland and the Northern Ireland region. This was an obsession of European leaders, in an attempt to preserve peace in this area, after living for years in an almost warlike situation.

The role of the Labour Party will be key in the coming days

Jeremy Corbyn has announced that his party will ask for the agreement to be approved in a second referendum.

According to Corbyn, Johnson has negotiated an agreement that is even worse than the one negotiated by Theresa May and which was forcefully rejected by Parliament.

The best way to solve the Brexit issue is to give people a chance to say what they think.

All indications are that only if Labour MEPs support Johnson can the agreement be approved. This support could come in exchange for a second referendum.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

Market_evolution0
October 18, 2019

Mainland China’s stock falls as growth weakens more than expected

Mainland China’s stock falls on Friday, October 18, as growth weakens more than expected in the country.

Most Asia-Pacific markets fell on Friday morning as China released worse-than-expected gross domestic product figures. Its protracted trade dispute with the United States continues to affect growth.

Mainland Chinese markets fell after the release of the data. Australia’s S&P/ASX 200 fell 0.60%. All four major banks recorded losses: National Australia Bank fell 0.76%, Commonwealth Bank lost 1.02, ANZ fell 1.04% and Westpac fell 1.17%. In Japan, the Nikkei 225 resisted the general trend and rose. Meanwhile, the South Korean Kospi fell slightly.

Dow drops more than 200 points eliminating weekly gain

U.S. equities fell on Friday, October 18, amid weak data abroad and while Netflix led the decline in technology stocks.

Netflix shares fell more than 6% and were the worst performing among FANGs. Facebook fell 2.6% and Amazon 1.7%. Alphabet shares dropped slightly.

More than 70 S&P 500 companies reported third quarter earnings this week. Of those companies, 81% had better than expected results.

The Dow rose 0.80% during the week. The S&P 500 and Nasdaq Composite rose 0.9% and 1.2% respectively during the week.

European equities close down before a crucial weekend

European equities closed lower on Friday, October 18, as traders wait to see if the Brexit agreed in the British Parliament is approved.

The UK Prime Minister reached an agreement on Brexit which was unanimously endorsed by EU leaders. It must now fight to get British MEPs’ approval in a vote on Saturday.

The Democratic Unionist Party of Northern Ireland (DUP), the coalition partner of Johnson’s conservative party, has said it will vote against the agreement.

Some analysts project a minimal defeat, unless Johnson can get 37 votes from legislators outside their own ranks.

The Stoxx 600 pan-European index ended 1.15% down, with a 1.45% drop in car trade as a result of a Renault profit warning. Meanwhile, basic resources were up 0.33%.

Oil and Gold

Oil prices fell on Friday after China, the world’s largest oil importer, recorded its weakest quarter of economic growth in nearly three decades. Growth in demand for crude tends to be highly correlated with economic growth. Refinery yields in September rose by 9.4% over the previous year.

Gold prices remained stable on Friday, after Britain managed to close a deal for its exit from the European Union. This increases investors’ appetite for risk, while a weak dollar also provides support for the precious metal.

Tension in Europe

The European markets had to assimilate from the first hours the bad data of the gross domestic product that was given in China. It has been left at 6%, which is worse than the expected 6.1% and the previous 6.2%.

Initially it might not seem so bad, but we must bear in mind that it is the worst since 1992. This figure has once again reminded traders that the global economy is suffering greatly from the trade war.

The poor data also highlights poor industrial production in the U.S. and poor retail sales.

Another negative factor has been the fact that two major European companies have given very bad forecasts.

The first is the car manufacturer Renault, which has plummeted brutally to the lows since 2013 and has dragged the automotive sector into its downfall.

The other company that went badly was the food multinational Danone, which also collapsed and dragged the European food and beverage sector, which was the second worst sector of the day in Europe.

At the end of Friday’s session there were some statements by Mario Draghi in which he made it clear that in Europe several bubbles have formed in the financial markets.

On the other hand, operators have continued to ignore the news about possible agreements between Chinese and North Americans. For the moment, there are no facts on the table.

Brussels says it has no alternative but to respond to the United States with tariffs

The European Commission has regretted the entry into force of the tariffs announced by the United States against Europe.

The authorisation of the punishment of exports from the European Union came after the World Trade Organisation ruled at the beginning of October for the illegal subsidies received by the European aircraft manufacturer Airbus.

The imposition of these tariffs will mainly affect Germany, France, the United Kingdom and Spain.

The 25% levy came into force at 1 a.m., European time, on 18 October.

Imposing tariffs on each other is not in anyone’s long-term interest. In addition, it will inflict very significant damage on the supply chain, which is made up of the aviation sectors of the United States and the European Union.

It will also cause collateral damage to many other sectors already suffering under the current trade tensions.

The saga of Trump’s impeachment follows

White House chief of staff Mick Mulvaney, a former Republican congressman, has emerged as one of the leading figures on Trump’s deal with Ukraine.

Mulvaney linked Trump’s threats to the Ukrainian president with the suspension of aid to Hillary Clinton in the 2016 elections.

The Justice Department, and one of Trump’s personal lawyers, distanced themselves from his comments.

China to take countermeasures against the United States

It thus responds against an American bill which favours demonstrators in Hong Kong.
The US House of Representatives has passed the ‘Hong Kong Human Rights and Democracy Act’.

The bill calls on several government departments to consider whether recent political developments in Hong Kong require the United States to change the region’s special trade status.

If the bill eventually becomes law, it will not only harm Chinese interests and their relationship with the United States, but it will also seriously harm the interests of the United States.

The Chinese side now justifies enacting effective countermeasures to firmly safeguard China’s sovereignty, security and development interests.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

October 21, 2019

Asian markets were mixed amid new uncertainties about Brexit

Asia-Pacific markets were mixed on Monday 21 October, as Brexit’s performance over the weekend created more uncertainty about the UK’s imminent exit from the European Union.
In Japan, the Nikkei 225 rose slightly.

Mainland Chinese equities were traded down and the Shanghai composite fell by 0.51%. In Hong Kong, the Hang Seng index rose slightly.

The yen was very weak (CurrencyIndex 0%) early Monday morning.

Dow drops more than 200 points eliminating weekly gain

U.S. equities fell on Friday, October 18, amid weak data abroad and while Netflix led the decline in technology stocks.

Netflix shares fell more than 6% and were the worst performing among FANGs. Facebook fell 2.6% and Amazon 1.7%. Alphabet shares dropped slightly.

More than 70 S&P 500 companies reported third quarter earnings this week. Of those companies, 81% had better than expected results.

The Dow rose 0.80% during the week. The S&P 500 and Nasdaq Composite rose 0.9% and 1.2% respectively during the week.

The U.S. dollar was very weak (CurrencyIndex 0%) early Monday morning.

European equities close down before a crucial weekend

European equities closed lower on Friday, October 18, as traders wait to see if the Brexit agreed in the British Parliament is approved.

The UK Prime Minister reached an agreement on Brexit which was unanimously endorsed by EU leaders. It must now fight to get British MEPs’ approval in a vote on Saturday.

The Democratic Unionist Party of Northern Ireland (DUP), the coalition partner of Johnson’s conservative party, has said it will vote against the agreement.

Some analysts project a minimal defeat, unless Johnson can get 37 votes from legislators outside their own ranks.

The Stoxx 600 pan-European index ended 1.15% down, with a 1.45% drop in car trade as a result of a Renault profit warning. Meanwhile, basic resources were up 0.33%.

Breaking News: Britain has requested an extension of the October 31 deadline for leaving the European Union, after British lawmakers delayed voting on Saturday on the withdrawal agreement negotiated by Prime Minister Boris Johnson.

Although Johnson personally opposes an extension, the British government was forced to ask for it after British lawmakers delayed approval of Johnson’s withdrawal agreement and voted to activate a law that obliges Downing Street to ask Brussels to postpone the Brexit deadline.

That amendment implementing the ‘Benn Act’ was backed by 322 votes in favour and 306 against.

The euro was mixed (CurrencyIndex 50%) early Monday morning.

Oil prices fall due to poor demand outlook and supply concerns

Oil prices fell on Monday, October 21, amid continuing concerns about the global economic outlook and the impact on oil demand. Russia once again missed its target to reduce oil production last month. Commodity markets continue to struggle amid weak economic data.

The Organization of Petroleum Exporting Countries, Russia and other oil producers agreed in December to reduce supply by 1.2 million barrels per day. However, several countries, including Saudi Arabia, have complained that Russia has not fully complied with the agreement.

Brent futures were down (MarketEvolution) early Monday morning.

Gold did not undergo major changes, as investors were waiting for greater clarity in trade negotiations between the U.S. and China. They are also looking forward to the postponement of the crucial vote on Britain’s exit agreement from the European Union. So far, what has supported the price of gold are fears of a recession and investors are now waiting if this is going to be confirmed.

Gold futures were down (MarketEvolution) early Monday morning.

Tension in Europe

The European markets had to assimilate from the first hours the bad data of the gross domestic product that was given in China. It has been left at 6%, which is worse than the expected 6.1% and the previous 6.2%.

Initially it might not seem so bad, but we must bear in mind that it is the worst since 1992. This figure has once again reminded traders that the global economy is suffering greatly from the trade war.

The poor data also highlights poor industrial production in the U.S. and poor retail sales.

Another negative factor has been the fact that two major European companies have given very bad forecasts.

The first is the car manufacturer Renault, which has plummeted brutally to the lows since 2013 and has dragged the automotive sector into its downfall.

The other company that went badly was the food multinational Danone, which also collapsed and dragged the European food and beverage sector, which was the second worst sector of the day in Europe.

At the end of Friday’s session there were some statements by Mario Draghi in which he made it clear that in Europe several bubbles have formed in the financial markets.

On the other hand, operators have continued to ignore the news about possible agreements between Chinese and North Americans. For the moment, there are no facts on the table.

Brussels says it has no alternative but to respond to the United States with tariffs

The European Commission has regretted the entry into force of the tariffs announced by the United States against Europe.

The authorisation of the punishment of exports from the European Union came after the World Trade Organisation ruled at the beginning of October for the illegal subsidies received by the European aircraft manufacturer Airbus.

The imposition of these tariffs will mainly affect Germany, France, the United Kingdom and Spain.

The 25% levy came into force at 1 a.m., European time, on 18 October.

Imposing tariffs on each other is not in anyone’s long-term interest. In addition, it will inflict very significant damage on the supply chain, which is made up of the aviation sectors of the United States and the European Union.

It will also cause collateral damage to many other sectors already suffering under the current trade tensions.

The saga of Trump’s impeachment follows

White House chief of staff Mick Mulvaney, a former Republican congressman, has emerged as one of the leading figures on Trump’s deal with Ukraine.

Mulvaney linked Trump’s threats to the Ukrainian president with the suspension of aid to Hillary Clinton in the 2016 elections.

The Justice Department, and one of Trump’s personal lawyers, distanced themselves from his comments.

China to take countermeasures against the United States

It thus responds against an American bill which favours demonstrators in Hong Kong.

The US House of Representatives has passed the ‘Hong Kong Human Rights and Democracy Act’.

The bill calls on several government departments to consider whether recent political developments in Hong Kong require the United States to change the region’s special trade status.

If the bill eventually becomes law, it will not only harm Chinese interests and their relationship with the United States, but it will also seriously harm the interests of the United States.

The Chinese side now justifies enacting effective countermeasures to firmly safeguard China’s sovereignty, security and development interests.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

1 Like

October 22, 2019

Asia-Pacific markets advance after Wall Street gains

Asia-Pacific markets rose on Tuesday 22 October, boosted by improved investor sentiment due to the apparent good progress of US-China negotiations.

The ASX 200 benchmark rose slightly, while the energy sub-index rose by 0.64% and materials by 0.65% as major mining companies led. In South Korea, the Kospi index rose 0.93 per cent while major chip manufacturers improved. Samsung’s shares appreciated by 1,59% and SK Hynix rose by 1,81%. Hong Kong’s Hang Seng index appreciated slightly. Japanese markets were closed due to a holiday.

The yen was very weak (CurrencyIndex 0%) early Tuesday morning.

The S&P 500 rises and approaches a record level

U.S. equities closed higher on Monday, October 21, driven by optimism about U.S.-China trade talks and the corporate earnings season.

The S&P 500 could this week reach its all-time high of 3,027 points in July. Every time it approaches that level, it falls back again. As long as there is not too much interference from geopolitical news, it is unlikely to exceed that level of resistance.

Apple shares led the Dow, rising more than 1.5% to their all-time high. These gains offset the 3.8% drop in Boeing shares.

Chinese Vice Premier Liu He said Beijing will work with the United States to address trade differences. He also said both sides have made substantial progress.

There is considerable uncertainty on many fronts, including a generally protectionist trade context and many domestic and international policy hot spots.

The US dollar was very weak (CurrencyIndex 12.5%) early Tuesday morning.

European equities close up despite uncertainty over Brexit

European shares closed up on Monday 21 October, despite the UK leader being denied a parliamentary vote on his Brexit agreement.

The Stoxx 600 pan-European index traded 0.7% above the flat line, with core funds and banks up 2%. The health sector fell slightly.

On Monday, in the UK Parliament, Prime Minister Boris Johnson was prevented from holding a key vote on the withdrawal agreement he had recently agreed with Brussels. The vote proposal was rejected by the Speaker of the House of Representatives, John Bercow, who said it was not allowed to ask politicians to debate the same questions repeatedly.

Some European leaders have been reluctant to give Britain more time, despite the fact that an orderly exit is widely accepted as the least damaging scenario for both the UK and the EU.

The euro was weak (CurrencyIndex 37.5%) early Tuesday morning.

Oil remains stable on weak demand despite trade war optimism

Oil prices changed little on Tuesday. Persistent concerns about a global economic slowdown, which could affect oil demand, offset some signs of progress in U.S.-China trade talks. Commodity markets were cautiously optimistic amid signs that a trade agreement is about to be signed. Oil prices remained stagnant and continued economic weakness weighed on expectations.

Brent futures were down (MarketEvolution) early Tuesday morning.

During Tuesday’s Asian trading, gold lost ground as investors await greater clarity from the U.S. Federal Reserve regarding possible interest rate cuts this year. Equity markets are doing quite well, which means that risk appetite is still alive and is hurting gold.

Gold futures were down (MarketEvolution) early Tuesday morning.

Britain calls on EU to postpone Brexit for the third time

Britain has requested an extension of the October 31 deadline for leaving the European Union after British lawmakers delayed Saturday’s vote on the withdrawal agreement negotiated by Prime Minister Boris Johnson.

EU Council President Donald Tusk said he received the extension letter and would begin consulting with EU leaders on how to respond to Britain’s request.

Boris Johnson did not personally sign the extension request letter. The prime minister, in a separate letter, made it clear that he personally opposes such an extension.

According to Johnson, further enlargement would harm the interests of the United Kingdom and the European Union’s partners, as well as the relationship between the two sides.

Despite Johnson’s personal opposition, the British government was forced to ask for the postponement, after British lawmakers delayed approval of the withdrawal agreement and voted to activate a law that obliges Downing Street to ask Brussels to postpone the Brexit deadline.

House of Commons speaker prevents new vote Monday

UK Prime Minister Boris Johnson was unable to hold the key vote on the Brexit agreement negotiated with Brussels.

The UK government was keen to have a significant vote on Monday, but this was rejected by the Speaker of the House of Representatives, John Bercow.

Outlining his decision, Bercow said there had been no change either in substance or in circumstances. Bercow said any attempt to make Monday’s vote would be repetitive and messy.

China claims WTO trade sanctions against the United States

The Government of China has requested the endorsement of the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) to impose trade sanctions in the amount of $2.4 billion against the United States, following a dispute between the two countries since 2012.

The United States has failed to comply with the DSB’s recommendations and rulings within a reasonable period of time, and no agreement on compensation has been reached.

In response to the continued failure of the United States to comply with the recommendations and rulings of the WTO dispute settlement body, China requests authorization from the DSB to suspend concessions and related obligations.

The case dates back to 25 May 2012, when China requested consultations on the imposition of countervailing measures by the US on certain products from China.

Trudeau struggles to stay in power in a hard-fought race

Canadian Prime Minister Justin Trudeau seems on the verge of losing his parliamentary majority.

Voters head to the polls to elect their new prime minister on Monday, ending a six-week campaign that has been light on politics and heavy on personality.

The latest opinion polls show that the Liberals of Trudeau and the Conservatives of Andrew Scheer are very much on a par. Crucially, however, neither is in a position to win by an absolute majority.

A Nanos Research poll, published last Wednesday, puts Scheer’s conservatives at 31.5%, while Trudeau’s liberals remain at 31%.

This time it will be the small parties that will unbalance the balance.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

MarketEvo06

October 23, 2019

Major Asia-Pacific markets reflect Brexit developments

UK lawmakers voted against a limited timeframe for reviewing legislation relating to Britain’s withdrawal from the European Union. This means that it is almost certain that the UK will not leave the European Union by the current deadline of 31 October. The EU can now provide an extension to prevent a Brexit without agreement.

Among mainland China’s shares, the Shanghai compound remained flat at the beginning of the session. Hong Kong’s Hang Seng index was also almost flat.

Australia’s S&P/ASX 200 was down 0.35% in the morning. Japanese markets reopened on Tuesday after a holiday, and the Nikkei 225 rose slightly. Softbank shares fell 2.56%, while Japanese technology giant prepares to take over WeWork.

South Korean Kospi dropped slightly. Apple’s main supplier, LG Display, will report its third quarter results on Wednesday. Samsung Biologics will also report its results. Prior to the reports, LG Display fell by 2.41%. Samsung Biologics was up 6.98% in the middle of news that the drug manufacturer Biogen could start manufacturing its Alzheimer’s treatment.

The yen was weak (CurrencyIndex 37.5%) early Wednesday morning.

U.S. equities fall after some disappointing corporate results

U.S. equities closed down on Tuesday, October 22, with investors analyzing the results of companies such as McDonald’s, Travelers, Procter & Gamble and United Technologies.

On the other hand, major indices fell in the afternoon after UK lawmakers rejected the Brexit deal. This makes an extension of the October 31 deadline more likely.

McDonald’s shares fell 5% in profits and revenues during the previous quarter, which did not meet analysts’ expectations. Sales at the company’s U.S. stores, a key measure for franchises, grew 4.8%. It is below the 5.1% expected.

As of Tuesday morning, more than 19% of S&P 500 companies had reported quarterly figures. Of those companies, nearly 80% have exceeded earnings expectations.

This season of results is not being spectacular at all, but it is not as bad as feared.

The US dollar was very weak (CurrencyIndex 12.5%) early Wednesday morning.

European shares remain flat

Brexit and the season of results are the focus.

The Stoxx 600 pan-European index returned to the flat line on Tuesday 22 October. Oil and gas equities rose 0.9%, leading earnings, while travel and leisure declined 1%.

European markets returned to square one after a hectic session in which British lawmakers are debating Prime Minister Boris Johnson’s draft law on the EU Withdrawal Agreement.

Members of the British Parliament will vote twice: first on Johnson’s exit plan. Secondly, they will vote on whether to allow the plan to be endorsed by the House. If Johnson fails the second vote, the October 31 deadline is likely to be extended.

Swiss banking giant UBS reported a 16% year-on-year drop in its third-quarter profits. The bank justifies it by the existence of a difficult environment.

Breaking news: Brexit stagnates as UK Parliament rejects Boris Johnson’s bill. Legislators in the UK Parliament voted against a limited timeframe for reviewing legislation related to Britain’s withdrawal from the European Union.

The euro was mixed (CurrencyIndex 50%) early Wednesday morning.

Oil gains ground and OPEC to consider further production cuts

The cuts are expected to be made in response to the prospect of lower demand growth.
In July, OPEC and Russia, along with other non-OPEC countries, agreed to extend by nine months the 1.2 million barrel per day output reduction. Saudi Arabia has made the largest cuts.

While geopolitical factors have occasionally driven oil prices, the biggest influence on the market so far is the US-China trade war and its impact on the growth of oil demand. However, oil prices were pressured by forecasts of an accumulation of crude oil reserves in the United States. Inventories are expected to have increased for the sixth consecutive week.

Brent futures rose (MarketEvolution) early Wednesday morning.

People who are constantly trading gold are saying that Brexit is not going to be an event and that is why gold is not moving. However, if this is an incorrect assumption and Brexit does become a big event, it is going to be a massive move in gold.

Reflecting this sentiment, gold holdings in exchange-traded funds have reached their highest level since mid-2013.

Gold futures rose (MarketEvolution) early Wednesday morning.

___CONTEXT_23oct

Progress has been made in trade talks

China and the United States have made some progress in their trade talks, according to China’s deputy foreign minister, Le Yucheng.

Any problem could be solved, as long as both sides respect each other. No country can prosper without working with other nations, Le said at the Beijing Xiangshan Forum.

The world wants China and the United States to end their trade war. This requires more openness, rather than separations or a new Cold War.

China has been nervous that the United States is trying to break, or at least severely curb, economic ties. Beijing fears that the Trump administration wants a complete separation from China.

The two countries have been working to resolve their trade dispute. The United States has announced an agreement in the first phase and has suspended a new tariff increase scheduled for October.

Long-term negative rates have adverse consequences

Jamie Dimon, executive director of U.S. banking giant JP Morgan Chase, said interest rate cuts do not boost economic growth.

According to Dimon, keeping negative rates steady is a really bad idea and has adverse consequences that are not fully understood.

Dimon joins the ranks of an increasing number of executives and economists who speak out against adopting such a policy over the long term.

However, central banks around the world are trying to boost growth by reducing interest rates, even to negative rates.

The International Monetary Fund has said that rates in the euro zone, Switzerland and Japan could remain in negative territory for many years. In the United States, where interest rates remain positive, the Federal Reserve is expected to cut them by a further 45 basis points this year.

Canada’s Justin Trudeau retains power but will have a minority government

The Canadian Prime Minister’s liberals remain in power after a closely contested election. However, they will have a minority government that will need the support in Parliament of a smaller left-wing party.

The vote showed a deeply divided country, with the Conservatives defeated and the popular vote won. The resurgence of the separatist Quebecois bloc took great strides in the mainly French-speaking province of Quebec.

Liberals have won 156 of the 338 seats. They are well below the 170 seats needed for a second absolute majority government.

The biggest problem is that it seems that Canadians have never been so divided and the next government really needs to work to correct it.

Boeing’s shares remain under pressure

Last Friday there were some emails from 2016 that questioned the safety of the flight control system of jet 737 Max.

Boeing Co said it understands the widespread protest over leaked messages from a former test pilot about the erratic behavior of his 737 MAX jet software. The messages were sent two years before the recent accidents.

The Company added that it is still investigating what the messages implied.

The world’s largest aircraft manufacturer said it had not been able to speak directly with former employee Mark Forkner. However, he echoed his lawyer’s claims that the problems were related to a faulty simulator.

The role of the simulator has emerged as a crucial issue since the messages appeared. Investigators are now looking to see if the erratic movements reported by the pilot meant that the problems were in the aircraft or just in the artificial cockpit.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

October 24, 2019

Asia-Pacific stocks are mixed as growth in South Korea continues to slow down

Asia Pacific stocks were mixed on Thursday, October 24, as the latest figures show South Korea’s economy continues to slow. On the other hand, investors are looking forward to Thursday’s ECB meeting.

Mainland Chinese markets were in negative territory late in the morning. Hong Kong’s Hang Seng index resisted the majority trend by rising 0.47%.

Australia’s S&P/ASX 200 rose by 0.32%. Oil stocks rose, with Santos up 2.72% and Woodside Petroleum up 2.58%. Japan’s Nikkei 225 rose 0.6%.

In South Korea, the Kospi was flat, with a large number of business results about to be published. The country reported its gross domestic product figures on Thursday. South Korea’s economy slowed in the third quarter, growing by 0.4% according to estimates by its central bank.

The yen was weak (CurrencyIndex 37.5%) early Thursday morning.

U.S. stocks rise despite weak Caterpillar and Boeing results

U.S. equities rose slightly on Wednesday, October 23, with investors awaiting business results. The S&P 500 approached its July record.

Caterpillar gained $2.66 per share in the third quarter, versus the consensus estimate of $2.88 per share.

Boeing shares rose 1% after the aircraft manufacturer said it will meet its schedule for the return of the 737 Max. This was enough to compensate for gains that did not meet analysts’ expectations. The Company reported a gain of $1.45 per share. Analysts expected a gain of $2.09 per share.

Despite weak results, the third-quarter earnings season has far exceeded analysts’ expectations. Of the 500 S&P companies that reported through Wednesday morning, 81% had better than expected results.

The US dollar was weak (CurrencyIndex 37.5%) early Thursday morning.

European equities close slightly upwards

European shares were negotiated on Wednesday 23 October unchanged, after Prime Minister Boris Johnson put an end to the progress of his agreement on Brexit.

The pan-European Stoxx 600 reduced initial losses to trade just above the flat line at the close of the session. Financial services companies led the losses, while core resources were just below 1.1%.

The British Parliament returned to normal after legislators voted Tuesday night for the Johnson Withdrawal Bill to be passed in Parliament. However, the House rejected the Prime Minister’s plans for it to be passed within three days because of the lack of time for its revision.

The focus is now on the European Union. European leaders must give a verdict on whether or not to grant an extension of the 31 October deadline. This is a measure recommended by the President of the Council, Donald Tusk.

If the deadline is extended to 31 January, Johnson could call general elections in an attempt to consolidate his mandate. The current prime minister’s Conservative Party is at the top of the polls.

The EUR was weak (CurrencyIndex 25%) early Thursday morning.

Oil prices fall due to weak demand outlook

During Asian trading on Thursday, crude oil fell due to worries about poor demand prospects. The decline comes after the previous session saw an increase of more than 2%.

U.S. oil inventories fell 1.7 million barrels in the week ending October 18, according to the Energy Information Administration. Analysts’ expectations were for a rise of 2.2 million barrels. This contrasts with inventories previously released by the American Petroleum Institute (API), which showed an increase of 4.5 million barrels.

Brent futures rose (MarketEvolution) early on Thursday morning.

Gold remained above $1,490 an ounce in Thursday’s Asian session, while investors expect more clarity on the Brexit, after the European Union delayed the decision to grant an extension to Britain, and before the Federal Reserve meeting that will give clues on interest rates.

The futures on the gold rose (MarketEvolution) in the first hour of Thursday.

Brexit stagnates

Brexit continues to generate uncertainty while the UK Parliament rejects the short timetable for Boris Johnson’s bill.

Legislators in the British Parliament voted against a limited timeframe for reviewing legislation related to Britain’s withdrawal from the European Union.

MEPs rejected by 322 votes to 308 the timetable that would have seen the bill passed in Parliament in three days.

Boris Johnson said he would now wait until he had talks with European Union leaders.

The President of the European Council, Donald Tusk, said after the vote that he would recommend that the other 27 member states of the European Union approve a delay in Britain’s departure date.

German Dax goes up with many values

Values backing up an index is a very good sign, as the statistics show.

It is known that the best way to see when a rise is good, or on the contrary when it is in a ceiling, is to observe the number of values that accompany the index in movement.

Almost all large ceilings arrive when the index is moved upwards by very few values and others find themselves with large declines. The Dow Jones has typically touched all the big roofs with just 10% or 20% of the values following in the ups.

Right now the Dax has 76% of the values above the 200 average. There are many of them and it is a very good sign.

When there are more than 76% of Dax values above the 200 average, the Dax goes up 100% of the time.

Mark Zuckerberg tells Congress Libra project will extend U.S. financial leadership

Facebook executive director Mark Zuckerberg testifies Wednesday before the House Financial Services Committee.

He argues that the crypto currency, backed by Facebook, will extend U.S. financial leadership as well as democratic values around the world.

The rest of the world does not wait. China is moving quickly to launch similar ideas in the coming months. If America does not innovate, its financial leadership is not guaranteed.

When Facebook announced Libra, the Company said it planned to launch the digital currency in 2020. Since then, Facebook has said it will not launch Libra until it receives regulatory approval.

Boeing replaces the head of the commercial aircraft unit in the midst of the 737 Max crisis

Boeing replaced the head of its commercial aircraft unit on Tuesday, as the manufacturer rushes to convince regulators to allow its 737 Max aircraft back into service.

Kevin McAllister is the highest-ranking executive who leaves after catastrophes with two of his planes.

The change in leadership comes less than two weeks after Boeing’s board stripped CEO Dennis Muilenburg of his role as president, saying the measure would allow him to better focus on getting Max planes back into service.

The commercial aircraft division has been in crisis for nearly a year, after the first of the 737 Max’s two accidents. A second 737 Max sank into the sea, less than five months later.

These accidents resulted in the grounding of Boeing’s best-selling aircraft worldwide.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

October 25, 2019

Asia struggles to make a profit while investors look for some direction

On Friday, October 25, the Asian markets struggled to end up positive. They do so while investors were looking for guidance on the evolution of the US-China trade war and on the UK’s exit plan from the European Union.

The Nikkei 225 in Japan declined slightly. Mainland Chinese markets were also down. In Hong Kong, the Hang Seng index fell by 0.45%. The Australian ASX 200 resisted the downward trend and rose 0.54%, with most sectors advancing.

In South Korea, the Kospi index fell softly, but the shares of the leading chip manufacturer SK Hynix rose 2.63%. The company released its third-quarter results, where revenues fell 40% year-on-year and net profit by 89% in the same period. Still, revenues were up 6% from the previous quarter due to signs of recovery in demand and pricing in the chip market.

The yen was very strong (CurrencyIndex 75%) early on Friday.

U.S. shares reflect season of results

On Thursday October 24 Wall Street was immersed in a greater inflow of operations by the corporate results season.

Forty-five S&P 500 companies reported results on Thursday. Some of them have been NBCUniversal-parent Comcast, Dow Inc. and Twitter. Amazon, Intel and Visa are among those that will announce their results after the close.

More than 31% of S&P 500 companies have reported quarterly results so far. Of them are almost 80% that exceed the estimates of analysts.

The main indices generally rose at the start of the session, as investors appreciated the solid earnings of Microsoft, Tesla and PayPal, whose results were released on Wednesday after the close of the session.

The U.S. dollar was very strong (CurrencyIndex 75%) early Friday morning.

European equities rise despite negative factors

European shares rose on Thursday 24 October. Traders remain uncertain about the expected delay in the UK’s exit from the European Union as the corporate earnings season accelerates.

The pan-European Stoxx 600 rose 0.5% and had a 1.4% increase in the automobile sector, while technology stocks fell 0.8%.

The indices lost ground on worse-than-expected eurozone manufacturing and services data. The October services PMI estimate stood at 51.8. It is slightly below the expected 51.9. The manufacturing PMI stood at 45.7. Nevertheless, the optimistic wave of corporate earnings helped to offset concerns about the economic situation.

Investors are also watching Brexit, which now depends on the decision of EU leaders to grant the UK a further extension. Boris Johnson has signalled his intention to call general elections in the UK before Christmas, if the October 31 deadline is extended to next year.

The euro was strong (CurrencyIndex 62.5%) early Friday morning.

Crude Oil rises for third consecutive day

Crude Oil prices rise as U.S. inventories fall unexpectedly and OPEC and allies take supporting action. This offsets concerns about demand prospects. Analysts argue that inventories could fall further in the coming weeks.

Brent futures rose (MarketEvolution) early on Friday.

Gold ounces are considered a safe investment in times of political and financial uncertainty. SPDR Gold Trust, the world’s largest gold-backed hedge fund, said its gold stock fell 0.13% to 918.48 tonnes last Wednesday from 919.66 tonnes on Tuesday.

Platinum rose 0.5% to $919.60 per ounce after reaching a peak of more than three weeks.

The futures on gold rose (MarketEvolution) early Friday morning.

Weekly U.S. unemployment claims fall unexpectedly

The number of Americans who filed for unemployment benefits fell unexpectedly last week, even though hiring and economic growth have slowed.

Analysts had predicted that claims would rise to 215,000.

The overall decline comes despite an ongoing strike by some 48,000 workers at General Motors. The work stoppage is already affecting production and striking workers cannot receive unemployment benefits.

Eurozone says goodbye to European Central Bank president

Mario Draghi, has made his last appearance, following the meeting of the Governing Council of the ECB. He insisted that the eurozone needs monetary stimuli to be maintained for a long period of time and appealed to the eurozone countries to make a greater fiscal effort.

The central bank has kept its monetary policy unchanged, following the changes implemented in September.

Draghi has acknowledged that he is proud of the way in which the Governing Council has tried to fulfil its mandate. He says they have left as a legacy the motto ‘Never give up’.

The President of the ECB ended by thanking the journalists for their work as agents who have helped spread the central banks’ message over the past 20 years and forced them to be more transparent.

European Central Bank does not touch interest rates as expected

The Governing Council of the European Central Bank has decided that the interest rate on the financing operations, the marginal lending facility and the deposit facility interest rates will remain at 0%, 0.25% and -0.50% respectively.

The Governing Council expects the key ECB rates to remain at their current levels or below until the inflation outlook converges to a level close to, but below, the desired 2%.

As decided at the last Governing Council meeting, net purchases will be restarted under the asset purchase programme (APA) at a monthly rate of EUR 20 billion from 1 November. They will be maintained for as long as necessary to maintain favourable liquidity conditions and a large degree of monetary easing.

Trump says Syria’s ceasefire is permanent and U.S. will lift sanctions

President Donald Trump announced that he will lift the sanctions imposed on Turkey after the invasion of northern Syria. It seems that Ankara has guaranteed that a temporary ceasefire in the area will be permanent.

Trump used the speech to respond to criticism, even from members of his own party, who rejected his decision to remove US forces from northern Syria.

That measure left the Kurds to their fate, after being supported by the United States and leading the land struggle against the caliphate of the Islamic State terrorist group.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

October 28, 2019

Chinese stocks rise and Yuan strengthens as optimism over trade disputes increases

Chinese markets rebounded on Monday, October 28, as the U.S. and China seem on the verge of finalizing a first phase of a trade agreement.

The Shanghai composite index rose by 0.72%, while Hong Kong’s Hang Seng index rose by 1.19%. The other Asia-Pacific markets also rose.

In Japan, the Nikkei 225 and South Korean Kospi rose slightly. Australia’s S&P/ASX 200 remained flat. Large mining companies were revaluing, with Rio Tinto cutting some previous profits to finish almost 0.52% up, Fortescue Metals was up 1.98%, while BHP Billiton was up 0.95%.

The Singapore, India, Malaysia and New Zealand markets are closed for holidays.

The yen was strong (CurrencyIndex 75%) early Monday morning.

S&P 500 approaching historic high

U.S. equities rose on Friday, October 25. Investors benefited from Intel’s quarterly earnings and apparent progress on the U.S.-China trade front.

The S&P 500 rose 0.4% and traded briefly above its all-time high at the close of the session. The index was also a few points from its historic intraday high.

On the other hand, the technology sector closed with a rise of more than 1% on Friday. Intel stocks rose 8.1% after the chipmaker’s results exceeded analysts’ expectations. Intel also released better-than-expected fourth-quarter forecasts.

Amazon, on the other hand, recorded lower-than-expected revenues. The e-commerce giant also published a disappointing expectation for the Christmas season.

More than 38% of S&P 500 companies have published quarterly results to date. Of those companies, 78% have exceeded analysts’ expectations. This week has been one of the most intense, with more than 120 companies reporting.

Consumer sentiment dropped slightly in October to 95.5 points, according to the University of Michigan Consumer Survey. It is lower than the preliminary reading of 96 points, but above the September figure of 93.2 points.

The U.S. dollar was strong (CurrencyIndex 75%) early Monday morning.

European equities close slightly higher as investors digest a new round of results

On Friday, October 25, the European stock market ended bullish after an important round of corporate results and traders also watched the evolution of Brexit and the tension in the negotiations between the U.S. and China.

The pan-European Stoxx 600 ended with a slight rally. There was an increase in lead, while the food and beverage sector fell by almost 1.7%. Sectors and major exchanges were pointing in opposite directions.

EU members agreed on the need to grant the UK a third extension of its deadline to leave the bloc, but failed to reach a consensus on its duration.

German business morale remained strong in October, with the Ifo Institute’s business climate index standing at 94.6. This is unchanged from the previous month and slightly above estimates.

The euro was mixed (CurrencyIndex 50%) early Monday morning.

Crude oil rises for fourth consecutive session and reaches its best week of the past five

Crude oil rose on Friday, October 25, and recorded the largest weekly gain in more than a month. The support of falling U.S. crude oil inventories, optimism about a trade agreement and possible measures by OPEC and its allies to expand production cuts outweighed economic concerns. The weekly rise was supported by a surprise drop in US inventories, with crude oil stocks falling by around 1.7 million barrels.

Brent futures rose (MarketEvolution) early Monday morning.

Gold stabilized on Friday, October 25, trimming previous gains as equity markets rose and the dollar strengthened after Washington said it was about to end Phase 1 of the Beijing trade pact. However, gold ended up with a weekly gain.

The dollar advanced and US Treasury yields also rose slightly. However, Brexit continues to give some support to the precious metal.

On the other hand, palladium reached its all-time high, driven by the scarcity of metal used in automobile catalysts.

The futures on the gold rose (MarketEvolution) in the first hour of Monday.

MEPs call for multinationals to be obliged to make public the taxes they pay in each country

The plenary session of the European Parliament has urged governments to agree on EU rules that would oblige multinationals, active in the bloc, to make public how much tax they pay in each country.

This measure has already been supported by the previous Parliament and the new MEPs have called on the Member States to reach an agreement so that they can start negotiating.

The resolution was adopted with 572 votes in favour, 42 against and 21 abstentions.

The original Brussels approach would oblige multinationals, with global revenues exceeding €750 million per year, to make public information such as the number of employees, total net income, pre-tax profits, taxes to be paid in each country, taxes actually paid and accumulated profits.

The European Union delays its decision on the extension of Brexit

The ambassadors of the European Union discussed what kind of delay should be granted to the United Kingdom on the current deadline of 31 October.

They accepted that a delay was necessary, but could not agree on a specific date.

Now the ambassadors to the European Union will present the position of their countries and prepare the groundwork for European leaders.

France, which has adopted the toughest position with regard to deadlines on Brexit, does not want the UK’s exit to interfere with the EU’s political cycle.

While the EU is taking its time to decide on the extension request, Johnson has said he will press for general elections on 12 December.

Launch of Facebook News with stories from leading publishers

The launch of Facebook News was announced on Friday. It will be a new section that will show users a personalized selection of news.

Facebook has been working on the News project for months and will pay millions of dollars to news publications for license fees to publish their stories on Facebook.

News Corp CEO Thomson and News Corp President Murdoch have asked giants like Facebook and Google to pay for news content.

They have been asked to do so in a similar way as cable TV providers pay networks for the right to broadcast their programming.

The move comes amid Facebook’s fight to stop the viral exchange of fake news on its service.

Recently, Executive Director Mark Zuckerberg has been criticized for Facebook’s policy of allowing political ads with false information to be posted on the site.

Virgin Galactic will be listed on the New York Stock Exchange on Monday and will be the first public space tourism company

Private space tourism is about to become public.

Shareholders approved Virgin Galactic’s merger with one of the Chamath Palihapitiya companies, according to SEC records, allowing the space tourism company to be listed on the New York Stock Exchange on Monday.

Virgin Galactic will become the first space flight company to be listed on public markets.

The merger gives the combined company a $1.5 billion value and Virgin Galactic founder Sir Richard Branson retains a 51% stake.

Virgin Galactic’s spacecraft can carry six passengers and two pilots to the edge of space. It is launched from a jet-propelled aircraft and fires a rocket engine, reaching more than three times the speed of sound as it ascends through the Earth’s atmosphere.

The spacecraft and its passengers float weightless for a few minutes before landing back on Earth like a traditional airplane.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

1 Like

October 29, 2019

Asia’s shares show a mixed tone as hope increases in trade negotiations

The main Asian markets operated in a mixed manner on Tuesday 29 October, while investors follow closely the evolution of the trade negotiations between the United States and China.

Mainland Chinese equities fell at the end of the session. In Japan, the Nikkei 225 rose slightly. ANA passenger plane shares dropped more than 0.5% after Nikkei reported that the company is expected to record a profit drop of more than 20%.

South Korean Kospi is slightly down. The S&P/ASX 200 in Australia rose slightly. Hong Kong’s Hang Seng index reversed its previous gains while HSBC shares, traded in Hong Kong, fell by 1.58% after the bank released results showing losses of 18% year-on-year.

The yen was very weak (CurrencyIndex 0%) early Tuesday morning.

The S&P 500 reaches a new all-time high driven by good results and progress in trade negotiations

The S&P 500 reached record highs on Monday, October 28, as investors were optimistic about business results and the progress of U.S.-China trade negotiations.

The S&P 500 rose 0.6%, closing above the 3.027 points, which was the record set on July 26. The Dow Jones Industrial Average rose 0.5% and the Nasdaq Composite rose 1%.

A very strong message seems to be being sent that cyclical stocks are recovering. These stocks would not be recovering if the economy were to perform badly. Markets are moving out of the previous range and are now bullish. Economic data has been better than expected and the same is happening with the earnings season.

Microsoft shares contributed to Monday’s gains, up 2.5% after the company won a $10 billion contract with the U.S. Department of Defense.

The U.S. dollar was strong (CurrencyIndex 62.5%) early Tuesday morning.

European shares are on the rise while the EU grants a three-month enlargement for Brexit

The Stoxx 600 pan-European index ended Monday’s session October 28 with a slight rise, with a 1.9% increase in the automobile sector and banks falling softly after the disappointing HSBC results.

European equities closed strongly after the US president said he expects to sign part of the trade agreement with China ahead of schedule. Business results are also helping markets to move positively.

In addition, the European Union granted the United Kingdom a further extension for the three-month Brexit. The UK may leave the EU at any time before 31 January, provided that British Prime Minister Boris Johnson can obtain Parliament’s approval of his exit agreement.

The Johnson government on Sunday increased pressure on opposition leaders to hold early general elections in December in order to break the deadlock in the Brexit process.

Breaking news: Boris Johnson loses the vote to hold elections in the UK on 12 December. UK lawmakers have rejected the government’s request to hold general elections on December 12. Under current rules, two-thirds of Parliament needed to pass the motion that did not reach that figure. Opposition legislators rejected the opportunity to face Boris Johnson at the polls. Johnson said the government will try a new way Tuesday to finally hold early general elections.

The euro was mixed (CurrencyIndex 50%) early Tuesday morning.

Crude oil prices decline in the face of a possible increase in U.S. inventories

During Tuesday’s Asian session, oil prices fell in the face of a further rise in oil inventories, which are a signal of current demand. Meanwhile, the slowdown in economic growth counteracts the signs of a meltdown in the trade war between Washington and Beijing.

The futures on the Brent fell (MarketEvolution) in the first hour of Tuesday.

Gold does not vary much. It is conditioned by the advance of trade talks between China and the United States that caused equities to soar and increased risk appetite. US equities have reached new all-time highs, but trade negotiations are unpredictable. This has disappointed investors many times in the past and may happen again, benefiting the precious metal.

Gold futures were down (MarketEvolution) early Tuesday.

Difficult times for the American President

Among the criticisms for the withdrawal of troops from Syria and the intensification of the dismissal investigation have been difficult weeks for President Trump.

However, on Friday there was some encouraging news regarding the trade negotiations: it seems that the first phase of a trade agreement is coming to an end.

A statement by the Trump Administration said that both sides are about to finalize some sections of the agreement, following talks between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and China’s chief trade negotiator, Deputy Prime Minister Liu He.

However, legal problems remain for the president. Lawyers for former national security adviser John Bolton have been in contact with House officials about possible testimony in the impeachment investigation.

Bolton, who has just hired some of the best literary agents, probably has many juicy and potentially damaging stories to tell.

The United States and China are about to finalize a first phase of the trade agreement

The United States and China have made progress in trade negotiations and are about to finalize some parts of an agreement.

The world’s two largest economies have pushed for a trade agreement as they try to end a potentially devastating series of tariffs on hundreds of billions of dollars of each other’s goods.

President Trump seeks to resolve concerns about Chinese theft of U.S. intellectual property and forced transfers of technology. He also seeks to secure more Chinese purchases of U.S. agricultural products.

ISIS leader confirmed dead after U.S. incursion into Syria

The leader of the so-called Islamic state, Abu Bakr al-Baghdadi, was killed in a US military operation in Syria. This has been a severe blow to the terrorist group, even as US forces withdraw from the area.

Baghdad died after running towards the end of a tunnel, screaming all the way, while being chased by American military dogs. Accompanied by three small children, Baghdad activated his suicide vest by killing himself and the three children.

The ISIS leader was attacked near Barisha and U.S. forces used eight helicopters through an airspace controlled by Russia and Turkey. No Americans were killed in the raid, but one of the military dogs was injured.

The death of Baghdadi, who was a dangerous enemy of the United States and its allies in the Middle East, puts an end to a year-long international hunt.

Baghdadí, 48, was arrested by U.S. occupation forces in 2004 and held in Abu Ghraib prison before joining al-Qaeda in Iraq. He has directed ISIS since 2010. The last time he was seen alive was in an April video praising the Easter Sunday terrorist attacks on Sri Lankan churches.

Microsoft wins $10 billion defense contract surpassing Amazon

Microsoft has emerged victorious in a dramatic competition for public resources from the U.S. Department of Defense cloud.

It has defeated market leader Amazon Web Services, according to the Pentagon. The contract could be worth up to $10 billion in a decade.

Microsoft shares rose to 3% after the announcement and Amazon shares fell just under 1%.

The achievement highlights the emergence of Microsoft’s Azure cloud as a challenge for AWS and represents the latest victory for Satya Nadella, who took over from Steve Ballmer as Microsoft’s head in 2014.

Microsoft has also achieved important infrastructure agreements in the cloud from companies such as Walmart.

Microsoft does not disclose Azure’s revenue in dollar figures, but is assumed to have a smaller market share than Amazon, which received $9 billion in AWS revenue in the third quarter.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

October 30, 2019

Asian indices fall before the Federal Reserve makes a decision on interest rates

On Wednesday, October 30, the Asian stock market declined, as a decision on the Federal Reserve’s interest rate cut was expected to be released later today.

The Nikkei 225 in Japan fell 0.41%. Data released on Wednesday showed that Japanese retail sales in September were up 9.1% from the previous year and above expectations for a 6.9% rise. The increase in retail sales came before the tax hike that came into effect on October 1.

Mainland Chinese equities were down at the end of the session. South Korean Kospi traded lower by 0.72% as Samsung Electronics shares fell more than 1% prior to the release of its results.

Australia’s S&P/ASX 200 fell 0.78%. The consumer price index rose 0.5% compared to a 0.6% increase in the previous quarter.

The yen was very weak (CurrencyIndex 12.5%) early Wednesday.

S&P 500 sets new record as Wall Street awaits Federal Reserve meeting

The S&P 500 set a new record on Tuesday, October 29, with investors waiting for a possible Federal Reserve interest rate cut. The Dow Jones Industrial Average also saw a mild rise.

Expectations of changes in the Fed’s monetary policy helped the S&P 500 reach a new record. The central bank is expected to cut interest rates by 25 basis points. This would be the third time this year that the Federal Reserve has taken this step.

Merck and Pfizer contributed to the gains. Merck’s results exceeded expectations, driven by the immunotherapy drug Keytruda. Pfizer’s profits also exceeded analysts’ estimates. Both stocks rose by about 2%.

78% of the S&P 500 companies that have published results to date have exceeded analysts’ expectations. Investors also anticipate that a partial trade agreement between China and the United States will be signed next month.

The U.S. dollar was mixed (CurrencyIndex 50%) early Wednesday morning.

European shares move downwards as operators analyse business performance

European equities traded lower on Tuesday, October 29, as traders monitored gains, progress in trade negotiations and while the UK appears ready for the December general election.

The Stoxx 600 pan-European index dropped slightly at the end of the session, while the telecoms sector fell 2% with losses of potential clients. Construction and materials were up 0.6%.

Market participants analyse business results. BP reported a 41% drop in third quarter net earnings due to falling oil prices and climate impacts. BP stocks were down 4% at the end of the session. At the top of the European index, German health care company Fresenius was up 5.6% after third-quarter earnings rose on strong sales of home dialysis treatments.

Latest news: UK lawmakers agree to hold elections on 12 December to resolve Brexit’s paralysis. Legislators from parties across the UK Parliament voted, by 438 votes to 20, to hold general elections on 12 December.

The EUR was strong (CurrencyIndex 75%) early Wednesday morning.

Trump makes it clear he intends to safeguard oil in northern Syria

On Wednesday, October 30, oil prices fall, as the possible delay in the resolution of the trade war between China and the United States eclipses the fall in U.S. crude oil inventories.

Securing oil supplies from northern Syria remains a priority, even as the United States pulls its army out of the area. More than that, the president said he intends to explore the possibility of making a deal with ExxonMobil, or some other large American multinational to go there and do it right.

However, it is hard to see why the United States would need oil from Syria. After all, as Energy Secretary Rick Perry himself said, the United States has achieved energy independence.

Brent futures were up (MarketEvolution) early Wednesday.

On Wednesday, October 30, gold stabilizes, as a possible delay in the U.S.-China trade agreement stops the stock market rally. Investors are now focusing on the US Central Bank meeting. If the Federal Reserve lowers interest rates it would be negative for gold, as equities would likely rise and the attractiveness of gold as a safe-haven asset would be reduced. Investors expect the Fed to cut interest rates by 0.25 percentage points for the third time this year.

Gold futures were down (MarketEvolution) early Wednesday.

Boris Johnson lost the first vote to hold elections in the United Kingdom on December 12

The second largest party in the British Parliament, the Labour Party and its leader Jeremy Corbyn declared that they would not support a general election unless the possibility of a Brexit without an agreement is eliminated.

Under current rules, two-thirds of Parliament needed to pass the motion. However, Johnson only got 299 votes, as opposition legislators rejected the opportunity to face Prime Minister Boris Johnson at the polls.

The government will try again on Tuesday. Johnson’s defeat means that he is now likely to seek a different route to elections, passing a law by simple majority that circumvents the 2011 Fixed-Term Parliaments Act.

The world’s largest oil company will debut on the Stock Exchange on December 11

The Saudi state oil company Aramco, the largest in the world, expects to go public on December 11.

The Capital Markets Authority wants to make the initial public offering (IPO) on November 3, with a period to put a price that will begin on November 17.

Aramco, which last August published results for the first time in its history, obtained a profit of 92,767 million dollars, compared to 101,218 million for the same period last year. This represents a decrease of 8.3%.

Moody’s and Fitch recently ranked the company as the most profitable in the world.

Argentina’s stock market responds with falls to Alberto Fernández’s electoral victory

Argentina’s main stock market index, the S&P Merval, closed Monday’s session with a 3.9% drop after candidate Alberto Fernandez won the presidential election on Sunday.

Investors have bet on sales after the defeat of Mauricio Macri, the country’s current president.

With 97% of the votes counted, Fernandez has obtained 48.1%, while Macri has been awarded 40.4%. With these results, the possibility of holding a second round is eliminated.

For the year as a whole, the S&P Merval is revalued by almost 10%, improving by quite a bit the slight annual increase of 0.75% it reached in 2018.

On the other hand, the Argentine peso revalued 1.4% against the US currency.

Alphabet has made an offer to buy Fitbit

Google’s parent company made an offer to acquire Fitbit.

Fitbit’s shares were suspended from trading, after more than 18% of the shares skyrocketed. They later resumed trading and closed the day with a 30.5% rise, adding more than $330 million to their market capitalization.

Fitbit now stands at around $1.5 billion and its shares have increased by more than 12% in 2019.

The deal would introduce Alphabet into the fitness space, competing against companies like Apple, which recently launched a new version of its popular smartwatch.

Google licenses its Wear operating system to companies like Fossil, but it does not currently manufacture its own smart watch.

Google has described its hardware strategy as ‘environmental computing’, meaning that users should be able to access its services wherever they are.

DISCLAIMER

The research covered in this report should not be considered as a recommendation to operate. Opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.