Daily Market Reviews by MAYZUS - page 16
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04 March 2014: Tension Round The Conflict Between Russia And Ukraine Presses On The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday’s trading session took place under pressure from the conflict between Russia and Ukraine. The main Russian indices lost more than 10%-12%, and shares of the largest companies which are counted as a part of the indices, lost from 5% to 20%. This morning at the opening of the trading session, the situation seemed to be stabilizing slightly, but the perspectives of the Russian market on the short-term prospective are not so bright. MICEX is up by 2.11% and RTS is increasing by 2.54%, shares of the companies are, in majority, in the green zone, but are adding insignificant amounts in comparison to yesterday’s fall.
The trading session in the United States was also influenced by negative moods surrounding the conflict in Ukraine, and indices closed the trading day in the red zone. Even good macroeconomic statistical data that was published could not give enough support to the market. Growth rates of personal income in January made 0.3%, while personal expenses 0.4%, at average forecasts of these indicators on 0.2% and 0.1%. Expenses on construction for January increased by 0.1%, though a decrease by 0.5% was expected, and December's growth rate was reconsidered towards a significant increase from 0.1% to 1.5%. At last, the index of economic conditions of ISM in the non-productive sphere in February made 53.2, at average expectations on the level of 52.
As a result, the Dow Jones Industrial Average went down by 0.94% to the level of 16168.03 points, the S&P 500 decreased by 0.74% to the level of 1845.73 points, and the index of high-tech industries, Nasdaq Composite, went to a minus by 0.72% and reached a level of 4277.30 points.
The same picture was observed during the European session. Improvement of the statistics on the industry in Switzerland, the Eurozone, and Germany, were still unable to give considerable support to the exchanges. The British FTSE 100 index went down by 1.49% to a level of 6708.35 points, the Swiss SMI lost 2.29% and reached the level of 8281.01 points, and the German DAX decreased by 3.44% to the level of 9358.89 points.
Commodities are down today, with Brent and WTI losing 1.44% and 1.22% accordingly, traded on level of 109.17$ and 102.95$ per barrel. Gold is losing 0.87%, falling to the price of 1338.48$ per troy ounce, and silver is decreasing by 1.21% to the level of 21.22$.
Copyright: MAYZUS Investment Company Ltd
05 March 2014: Tension Weakened In The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
As a result, the Dow Jones Industrial Average index increased by 1.41% and went to plus on a level of 16395.88 points. The index of the wide market, S&P 500, rose by 1.53% to the level of 1873.91 points (reaching a new maximum level), and the index of the hi-tech companies, Nasdaq, added 1.75% in value and grew to the level of 4351.97 points.
The trading session in Europe also finished in positive territory. The index of Great Britain, FTSE 100, increased by 1.7%, the French CAC 40 added 2.5%, and the German DAX went to plus also by 2.5%. The regional STXE 600 indicator, in turn, increased by 2.1% and was closed on a level of 337.15 points.
Today, macroeconomic statistical data on indexes of business activity in the services sector of Germany will be published, as well as the Eurozone and Great Britain. We will also see data on gross domestic product and retails in the Eurozone. In the evening, the report on the index of economic conditions of ISM in the services sector of the USA will be presented.
You should also be reminded that tomorrow,Thursday the 6th of March, the meeting of the ECB is planned, and the euro seems to have been under some pressure before this event, due to the fact that it is still unclear what to expect from the ECB. Recovery of the economy of the region still is not the same for all of the members, and the deflation threat in the Eurozone keeps the relevance of monetary mitigation. According to recent data, in February consumer inflation made 0.8%, which is much lower than the 2% target level of the European Central Bank, and yesterday's statistics on the production prices showed a reduction of prices in the region in January by 1.4%, at consensus forecast of -1.3%.
Prices of oil and precious metals are correcting after the increase over the last few days. Brent is losing 0.33%, traded on a level of 108.50$ per barrel. WTI is down by just 0.09% on a level of 102.58$. Gold is losing 0.22%, and silver adds 0.22%, traded on prices of 1335.00$ and 21.27$ per troy ounce.
Copyright: MAYZUS Investment Company Ltd
06 March 2014: Meeting Of The European Central Bank Is The Center Of Attention
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
According to the published data in the Eurozone, the index of business activity in the services sector rose in February to 52.6 points, from 51.7 points a month earlier. Retail sales grew in January by 1.6% after a fall of 1.3% in December. Besides that, gross domestic product in the Eurozone, according to the revised data, increased in the fourth quarter by 0.3% at the quarterly expression, and 0.5% at the yearly expression, which coincided with preliminary data and expectations of the majority of analysts.
Following the results of the trading session, the British FTSE 100 receded by 0.71%, the French CAC 40 became 0.11% easier, and the German DAX went to a minus by 0.49%. The regional STXE 600 indicator decreased, in turn, by less than 0.1%, having closed on a mark of 337.06 points. It should be noted that the markets of Belgium, Italy, Spain, Switzerland and Scandinavia, were closed in the "green" zone.
As for the statistics from the USA, the index of economic conditions of ISM in the non-productive sphere made 51.6 points in February, while analysts predicted a result of 53.5 points. Data on the labor market also disappointed investors, employment of ADP made 139 thousand, which was worse than expectations of analysts on a level of 160 thousand. Additionally, the previous value of the indicator was reconsidered to the smaller amount, from 175 thousand to 127 thousand.
Following the results of the trading session, the indicator of blue chips, Dow Jones Industrial Average, went down by 0.22% to the level of 16360.18 points, the index of the wide market, Standard&Poor's 500, decreased by just 0.01% reaching a level of 1873.81 points, and the index of high-tech industries, Nasdaq Composite, went to plus on 0.14% and reached the level of 4357.97 points.
The chairman of the FED, Janet Yellen, declared yesterday that some time may pass before the regulator will be able to see positive statistical data supporting positive development of economic conditions. In the speech, Yellen noted that the FED needs to perform a huge amount of difficult work in order to achieve target indicators on inflation and unemployment, and also restore damage from the financial crisis. Further decisions regarding the QE3 program are going to be taken during the next meeting of the FED, which will take place on the 18th-19th of March.
In the meantime, today the attention of investors will be riveted towards Europe where there will be meetings of two Central Banks – the Bank of England, and the European Central Bank. If the first will not bring adjustments to the course of the monetary policy and will refrain from comments, from the second it is very much expected.
Copyright: MAYZUS Investment Company Ltd
07 March 2014: ECB Gives The Euro Incentives To Clamber Up
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday's trading session took place under the auspices of the expected meeting of the European Central Bank. The ECB kept the key interest rate at the former level of 0.25% and improved the forecast on economic growth. According to the new estimates of the European Central Bank, gross domestic product of the Eurozone will grow by 1.2% this year, whereas an increase of 1.1% was predicted earlier.
This decision was not a surprise and did not have any special impact on the markets, but the awaited press conference of Mario Draghi after the meeting did not please investors. He stated that the European Central Bank intends to keep key interest rates at the current level, or will lower them over longer period of time, whereas participants of the markets expected to hear hints on the possible reduction of rates in the near future.
As a result, indices closed the trading session with a insignificant growth, the British FTSE 100 got stronger by 0.19%, the French CAC 40 increased by 0.59%, and the German DAX went to plus by 0.01%. The regional STXE 600 indicator increased, in turn, by less than 0.1%, having closed on a level of 337.28 points.
Additionally , the euro strengthened its position in relation to the dollar and other currencies. The EUR/USD currency pair managed, from the level of opening at 1.3732 to go up to the maximum level on 1.3872, and this morning, is traded on a level of 1.3868.
As for the situation in the American platforms, the number of primary requests for unemployment benefits in the USA was reduced last week from the reconsidered value of 349 thousand to 323 thousand, and it appeared to be below expectations of 338 thousand.
Following the results of the session, the indicator of blue chips, the Dow Jones Industrial Average, raised by 0.38% to the level of 16421.89 points, the index of the wide market, Standard & Poor's 500, increased by 0.17% to the level of 1877.03 points, and the index of high-tech industries, Nasdaq Composite, went to a minus on 0.13% and reached a level of 4352.13 points.
In the evening, the attention of investors is going to be focused on the data on the labor market of the USA. Most probably, this data will not bring any significant changes, but now the ECB meeting is over, statistics from the US are going to be the main focus of investors attention. Yesterday, some representatives of the FED stated that only the sharp deterioration of indicators will lead to a change of course on the repayment reduction. One of them, the head of the FED of Philadelphia, Plosser, also made assumptions that it could take at least another two months before we see signs of the data being unaffected by the unusually cold winter conditions.
Copyright: MAYZUS Investment Company Ltd
10 March 2014: The Positive Statistics From The Labor Market Supported The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
On the last day of the first trading week of the month, as always, it was marked with the publication of one of the most important macroeconomic statistical reports of the United States - data on the labor market from the Ministry of Labor of the USA, as well as the change of employment in the non-agricultural sector of the country.
The published data appeared to be better than expectations of 151 thousand, making 175 thousand. According to experts, labor employment in February could've proceeded more actively if not for the extreme weather conditions in many states of the country, which saw people spending twice as much time in order to get to work, and experiencing serious transport difficulties. Thus, there is hope that the decrease in the indicator had a seasonal nature, and the situation in the sector will continue to stabilize. In the meantime, unemployment rate grew to 6.7% from 6.6% in January.
As a result, the Dow Jones industrial average index raised by 0.19% to the level of 16452.72 points, and the increase over the week made 0.8%. The Standard & Poor's 500 index raised by just 0.05%, having closed at the level of 1878.04 points, and gained 1.0% throughout the week. The Nasdaq Composite index decreased by 0.37% to the value of 4336.22 points, having added 0.7% within the week.
Commodities opened the trading week in the red zone. Gold was also falling in price on Friday, as positive data on employment, most likely, will give the FED grounds to reduce the QE-3 program once again, at the same volume at the following meeting. Even gold gained 1.3% for the last week, and this morning the price of the precious metal is falling by 0.50% and is traded on a level of 1331.58$ per troy ounce. Silver is losing even more – 1.14%, bargaining next to the level of 20.69$ per troy ounce.
Brent and WTI are losing 0.96% and 1.28% accordingly, traded on prices of 107.42$ and 100.69$ per barrel.
Copyright: MAYZUS Investment Company Ltd
11 March 2014: Uncertainty Concerning Ukraine Presses On The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday's trading day, the opening of the week, was negative for the markets, and the main stock indices of the world closed the day in negative territory. The main negative factor in the market is the unstable situation in Ukraine, which increases uncertainty in the markets. Additionally, macroeconomic statistical data from Japan and China also disappointed investors.
Export volumes in China fell in February by 18,1%, while analysts expected an increase of 6,8%, after the increase for 10,6% in January. Deficiency of trade balance, in turn, reached $22,98 billion in comparison with a surplus of $31,86 billion recorded in January. Data from Japan also appeared to be disappointing. Gross domestic product of the country in the fourth quarter grew, according to final data, by 0,2%, whereas analysts predicted the indicator to increase by 0,3%.
As a result, the European stock indices closed the trading session in the red zone. The index of Great Britain, the FTSE 100, went down by 0,4%, the French CAC 40 added 0,1%, and the German DAX went to a minus by 0,9%. The regional STXE 600 indicator, in turn, decreased by 0,5% and was closed on a level of 331,4 points.
American indices, following the results of the trading session, also decreased in value. The indicator of blue chips, the Dow Jones Industrial Average index, lost 0,21% and was closed on a level of 16418,68 points. The index of the wide market S&P 500 went to a minus by 0,05% to the level of 1877,17 points, and the index of the hi-tech companies, Nasdaq, decreased by 0,04%, reaching a level of 4334,45 points.
The situation seems to be a bit more positive on the commodities market, where Brent and WTI are adding just a bit more than 0,25%, traded on levels of 107,80$ and 100,85$ per barrel accordingly. Gold grows by 0,42%, bargaining next to the level of 1347,09$ per troy ounce. Silver is up by 0,55% on a level of 21,02$ per troy ounce.
Copyright: MAYZUS Investment Company Ltd
12 March 2014: The Negative Statistics And Nervousness Concerning Ukraine, Still Presses On The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
The markets seem to be stiffened with expectations or fears due to the pressure from various events, and seem unable to find the opportunity to find ground for movement in one direction or another. The Ukrainian factor still puts pressure upon world platforms. Victor Yanukovych speech, which took place yesterday, did not become a sensation, but, at the same time, did not minimize uncertainty in the markets. The international disputes on the legitimacy of occurring events remain in the spotlight. In the meantime, the process of separation of Crimea continues to develop. Yesterday, the Supreme Council of the autonomy adopted the declaration of independence of the republic.
Published macroeconomic statistics in the Eurozone also disappointed investors. Growth of industrial production of Great Britain in January made 0.1% for the month and 2,9% for the year, when analysts were predicting 0,2% and 3,0% respectively. At the same time, the surplus of the trade balance of Germany was reduced in January from 18,3 billion euro a month earlier, to 17,2 billion euro, which was worse than market expectations of 17,7 billion euro.
As a result, the trading session in Europe finished with the British FTSE 100 falling by 0,06%, the French CAC 40 by 0,48%, and the German DAX increasing by 0,46%. The regional STXE 600 indicator increased, in turn, by less than 0,1%, having closed on a mark of 337,28 points.
The attention of investors was also drawn towards the statistics from China, where the export in the country was reduced in February by 18%, which warmed up fears concerning the rates of its economic growth. This news pushed the American indices to go down, and the Dow Jones Industrial Average index weakened by 0,41%, closing on a level of 16351,25 points. The index of the wide market, S&P 500, went to a minus by 0,51% to the level of 1867,63 points, and the index of the hi-tech companies, Nasdaq, fell by 0,63% to a level of 4307,19 points.
Reuters reports that the Chinese Central Bank could, for the first time since 2012, reduce norms of reservation for banks, if rates of economic growth will fall lower than 7,5%. The following big block of statistics from China is expected tomorrow - data on retails and industrial production for February.
Copyright: MAYZUS Investment Company Ltd
17 March 2014: The Majority Of The Population Of Crimea Voted For Accession To Russia
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
The question concerning Crimea still remains on the agenda. According to the preliminary results of the referendum, which already passed in Crimea, nearly 96% of the voters who took part in the plebiscite about the status of Crimea, voted for entry of an autonomy within the structure of Russia. However, official authorities of Ukraine, and also leaders of many foreign states, (OSCE and other international organizations) are considering that the referendum has gone against the constitution of the country. However, Russia considers it legitimate.
On the eve of this referendum, the key stock indices of Europe finished the trading session in the red zone. Following the results of the trading session on Friday, the key index of Great Britain, FTSE 100, went down by 0,4%. The French CAC 40 lost 0,8% and the German DAX went to plus by 0,43%. The regional STXE 600 indicator, in turn, decreased by 0,7% and was closed on a level of 322,23 points. This morning, DAX and CAC 40 are up by 0,64%, FTSE 100 is adding 0,41%.
The remaining situation is also having an effect on the commodities market, where precious metals are increasing in price. Gold is up by 0,06%, and platinum grows by 0,44%, traded on the levels of 1379,80$ and 1476,10$ per troy ounce accordingly. Silver is down by just 0,02% on a level of 21,41$ per troy ounce.
Prices of oil, in the meantime, are falling. Brent is down by 0,50% on a price of 107,67$ per barrel, and WTI is losing 0,21% on a level of 98,35$ per barrel.
From macroeconomic statistics today, attention should be paid to data on the Eurozone’s consumer price index for February. Growth of the indicator could calm the markets slightly, after the statements the head of the European Central Banks made last week.
Copyright: MAYZUS Investment Company Ltd
18 March 2014: The First Sanctions Against Russia Have Only Political Character
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
The Russian President, Vladimir Putin, has signed the decree regarding the recognition of the Republic of Crimea. This news is not really positive for world platforms, but didn't affect the markets very negatively after all, as sanctions taken by various countries were rather soft. During the meeting that took place yesterday, Ministers of Foreign Affairs of the European Union introduced visa and financial restrictions for 13 Russian, and 8 Crimean officials.
In turn, the situation on the American platforms was also supported by the publication of strong statistics on industrial production in the country, which, in February, grew by 0,6% showing the maximum growth in six months. The restoration of economic activity of the USA after the cold winter brings optimism and inspires investors. The Dow Jones index grew by 1,13% to the level of 16247,22 points, NASDAQ added 0,81% and reached a level of 4279,95 points, and S&P 500 appeared in the plus by 0,96% finishing the trading day on the level of 1858,83 points.
The stock exchanges of the Asian Pacific Region are also bargaining in the green zone this morning, mainly due to the news of the soft sanctions taken against Russia by the EU and the USA. The Japanese Nikkei index grew by 0,94% so far, the Chinese Shanghai Composite by 0,08%, the Korean KOSPI added 0,91%, and the Hong Kong HANG SENG appeared in the plus by 0,48%.
Stabilization of the geopolitical situation affected the commodities market and is pushing the price of commodities to go down. Brent adds 0,24% and dropped to the level of 106,50$ per barrel, and WTI is increasing by 0,14% and is traded on a level of 97,76$ per barrel. Gold and silver are losing 0,87% and 1,03% accordingly, traded on prices of 1361,00$ and 21,06$ per troy ounce.
Now, the main question remains to be the risk of escalation of the situation in other territories of Ukraine. The insignificance of the sanctions declared yesterday by the US and the European Union could either testify to their unwillingness to break economic relations with Russia, or could be reflecting the sluggishness of the western bureaucracy.
Copyright: MAYZUS Investment Company Ltd
19 March 2014: Attention Of Investors Will Shift From Ukraine To The FED Meeting
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
On Tuesday, the main stock indices of Europe and the United States showed positive dynamics after the speech of the president of the Russian Federation concerning the developing geopolitical situation. In his speech, Vladimir Putin discussed the admission of Crimea as part of the Russian Federation, and also added that Russia is not intending to divide Ukraine.
Published macroeconomic statistics in the region were quite different, trade balance of the Eurozone showed a surplus and made 0,9 billion euro in January, in comparison with 13,8 billion euro a month earlier. In the meantime, the index of economic expectations of investors of ZEW of Germany for March, decreased to 46,6 points from 55,7 points a month earlier.
As a result, the index of Great Britain, the FTSE 100, increased by 0,6%, the French CAC 40 added 1%, and the German DAX went into the plus by 0,7%. The regional STXE 600 indicator, in turn, increased by 0,6% and was closed on a level of 327,93 points.
Statistical data in America also didn't show any considerable changes and did not disappoint investors. Inflation of the USA in February made 0,1%, which fully coincided with forecasts and with January values. The number of constructions of houses (following the results of February) made 0,907 million which was also close to the forecast of 0,910 million.
So, following the results of the trading session, the indicator of blue chips, the Dow Jones Industrial Average index, raised by 0,55% to the level of 16336,19 points, the index of the wide market, Standard & Poor's 500, increased by 0,72% and reached the level of 1872,25 points, and the index of high-tech industries, Nasdaq Composite, went into the plus by 1,25% and reached a level of 4333,31 points.
Today, the attention of investors could move from geopolitical questions to monetary. It is expected that the FED will reduce the program of repayment of assets by another 10 billion dollars to $55 billion so far, and also that target reference points could be reconsidered. Earlier it was thought that the policy of 'cheap money' will end when unemployment in the US reached 6,5%. It has already reached 6,7%, but on the whole, the situation on the labor market in the country is far from ideal.
Copyright: MAYZUS Investment Company Ltd