Market View; World Stock Indexes & Trading Journal - page 21

 

The main interest rate should be raised in June amid a stronger job market, consumer-spending growth and inflation heading back toward the Fed’s target.

 

Today begins a period that is seasonally negative for American stocks. Until April 15, the Americans will have to pay their IRS and many resort to the sale of shares or the redemption of investment funds to finance this charge. Over the past 20 years, the beginning of the month until that day, US markets were only able to achieve a positive return in only 30% of the time. This is it just an empirical data does not mean that American indexes will repeat this pattern this year. The important thing to remember is that the next two weeks will be due to attend a selling pressure.

 

European markets negotiate in consolidation. The oil sector should negotiate in a volatile form and may lose at an early stage, yesterday’s session gains. After the recovery on Wall Street session (motivated by the decrease of American production), the price of crude oil fell in Asian session due to protracted talks between the will and a sextet of countries. The continuation of these negotiations suggests that an agreement, even temporary, can be reached, it can mean a partial lifting of sanctions imposed on Iran. If this scenario materializes, the Iranian oil exports are expected to increase by increasing crude oil supply in the market. The appreciation of the euro could lead to underperformance of the more cyclical sectors such as the automobile, which yesterday was penalized by disappointing sales of vehicles in the US. Today at the end of the session is not excluded that European investors reduce their exposure to equity markets before the publication of the employment report in the US (tomorrow) and the fact that European stock markets only reopen on Tuesday and thus avoiding to be exposed to hypothetical adverse events during these four days they are closed.

 

European markets were closed while the S&P 500 declined after the release of the job’s report number, which came out significantly worst than expected. Beneath the disappointment of the economy adding only 126,000 jobs last month, against the expected 240,000, was an unusually cold winter in many unfortunate parts of the country.Weak Jobs Gain Gives Fed New Reason to Delay First Rate Rise.

 

This week investors will pay attention to the data disclosed by central banks in Europe and the USA. Greece will continue to shake the markets, with the deadline for payment of the loan to the IMF to end this Thursday.

 

For many analysts and investors, the last job's report makes it more likely that the Fed may wait until the end of summer to raise interest rates for the first time since 2006 and was this same expectation that raised the markets and the words of the President of the New York Fed increased the optimism. William Dudley said that economic growth should accelerate soon, after a first quarter of a downturn that was due, in his view, to the bad weather that hit the country, to the appreciation of the dollar and the impact of the oil price fall in energy industry. His speech also suggested that the Fed will not raise interest rates until at least September.

 

Berkshire Hathaways announced it will buy 20 million shares of Axalta Coating Systems for 560 M.USD.

 

The minutes of the last meeting of the Fed revealed that there was a recognition of global economic risks and an early weakest year in economic terms. However, in a comprehensive way the members of the Federal Reserve remain confident that the economic recovery will continue and give the necessary conditions for there to be a change in interest rates even in the year 2015.

 

With the absence of relevant economic indicators, today investors should focus attention on business news. This week has been characterized by news of business consolidation movements as well as the depreciation of the Euro, which yesterday has reached the minimum against the dollar since March 19th. The presentation schedule of business results is now being filled, although the earnings season in the US traditionally start earlier. The retail sector will call attention on the day after the Carrefour have presented figures on better sales than estimates, due to growth in Latin America and to the improvement of hypermarkets in the domestic market. In turn, the mining companies may be affected by the decline of about 30% in one month, of futures price on the iron. The issue of Greece remains one of investors’ concerns.

 

With the acquisition of BG Group by Shell to increase expectations of more mergers and acquisitions in the oil sector. Despite the drop in crude oil price in recent months, the oil sector has several opportunities especially for larger companies who have accumulated enough liquidity in recent years. Thus, rather than increase investment as they had planned before the abrupt oil fall, some of the largest companies in the sector have preferred to acquire smaller companies, thereby not only gain market share as synergies.

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