On Friday, the Stock indices of US showed mixed trend and closed mixed. The Dow Jones rose by 0.42% (21271.97), S&P 500 dipped 0.08% (2431.77), the Nasdaq fell by 1.80% (6207.92). European markets showed growth in single dynamics. The German DAX gained 0.80% (12815.72), British FTSE 100 rose by 1.04% (7527.33).
The main macroeconomic event this week will be the Fed meeting, at which decisions on monetary policy will be accepted. The probability of increasing the key rates according to futures FedWatch on the Chicago Exchange now exceeds 95%.
Last week the British pound fell to the lowest level in seven weeks. On Friday the dollar exchange rate reached the level of 1.2635. The reason for that were the results of the early parliamentary elections in the UK, in which the party of the current Prime Minister Theresa May did not gain an absolute majority of votes. This outcome was likely after the terrorist attacks in London and Manchester. Investors quickly changed the composition of the portfolios on fear of more stringent Brexit scenario, which caused a surge in volatility. Nevertheless, the Prime Minister received permission from the Queen to form the government, and most likely its composition will remain largely unchanged. This helped the pound to recover slightly and get the level of 1,274.
On Friday, investors overestimate the impact of political factors to the economy of the country. Hearings of former FBI Director Komi was not given soil to start impeachment proceedings against the President Donald Trump. The collapse of the markets did not follow. At the same time, the main reason for the volatility of the stock market was a total reduction of companies from high-tech sector and the reorientation of the direction of the asset to finance and energy. The reason for this was the rollback of the threat of removal of the President, which is providing a policy of reducing regulation of banks and strengthening of infrastructure in the country. Also, judging by the recent dynamics of the Nasdaq in previous weeks, we can talk about overheated technology sector, where investors have closed long positions. The leaders of decline were the giants such as Apple, which lost 3.9%, the capitalization of Microsoft fell 2.3%, Intel fell by 2.1%, Nvidia fell by 6.5%. At the same time, JPMorgan gained 2.4%, shares of oil company Chevron rose by 2.3%.
Last week gold lost 0.7%, contributed to that strengthening of the dollar against world currencies, including the British pound, which dipped noticeably.
Oil decreases the third consecutive week. Last week, the black gold lost 3.8%. This was due to a series of adverse events that do not speak in favor of buyers. This is a conflict around the Qatar that could lead to the exit of this country from a global Treaty of OPEC+. Also this is an unexpected growth inventories in America. On Friday, the oil slightly adjusted the fall. Today at the Asian trade session growth continues. This week, the possible occurrence of positive news from the monthly reports of OPEC and the International energy Agency.