Trading Journal

The strength of the U.S. dollar and its evolution will continue to dictate the behavior of stock market indexes. The EUR / USD exchange rate should be influenced by today’s meeting of the FED. The reaction of the forex markets may be exacerbated by the number of investors who have short positions on the European currency and may close their positions for profit taking. If as a result of this event, if the Euro / Dollar overcome the zone of 1,068 / 1,070 then it is likely that the European currency engage in a short-term recovery, which will penalize European indexes.

Stock markets negotiate with contained oscillations. The European markets will be the stage of the opposition of two effects: the positive associated with the rise of Wall Street and the negative associated with the recovery of the Euro, resulting from the meeting of the FED. The depreciation of the euro has been the main driver of European markets, so its recovery is a negative factor in the current environment. Therefore, is expected an underperformance of the European indexes against their American peers. If the recovery of the Euro continue, the DAX should be penalized as it is the most sensitive to the common currency as was the most favored for the losses this currency suffered until yesterday.

FTSE 100 Index hit a fresh record and climbed above 7,000 for the first time.

European markets are trading in slight correction. Last week, Merrill Lynch published a poll in which stood a clear preference for European equities, followed by the Japanese, and there is the conviction that economic conditions in the euro area will improve over 2015. The preferred sector of global investors is the automobile and less appealing the financial sector. US shares are less attractive according to the survey.

European markets negotiate without major fluctuations. The recovery of the euro and the disappointing data given by the manufacturing industry in China should weigh negatively on the main indexes. Today will be published the final data on economic activity, measured by the PMI indexes. Economists estimate a further improvement in recent months. The impact of these data in the equity markets should materialize via forex market. If the PMI indexes indicate a higher economic activity than estimated the Euro will tend to value itself, penalizing European equities. The issue of Greece has been relegated to a secondary plan but retains its importance. The government in Athens will present an economic plan until next Monday, while the President of the European Parliament, Martin Schultz noted that it is possible to reach an agreement this week.

European markets shrink after the opening of the session, following the Wall Street trend. As we know, there are signs that point that European markets reached extreme levels. However, only when the DAX (who has served as benchmark for European markets) close below 11800, the short-term trend could be reversed. A possible correction of short-term European indexes does not compromise the positive environment that has marked the stock market year of 2015. One of the factors that may cause a decline in European markets is a recovery of the Euro.The course of the European currency can be influenced by the publication of the German business sentiment index.

The reasons for the weakness in the Aamerican Indexes are from technical and fundamental nature. The technical reasons are linked to the fact that the rise in US indexes have reached extreme levels (although not as extreme as the Europeans) so a correction was not entirely unlikely. In fact, many investors decided to take profits in sectors that had accumulated higher valuations, such as biotechnology. Another factor that has weighed on investor sentiment is the downward revision of estimates for corporate profits for the 1st quarter of this year. The main reason for this review is the rise in the dollar.

European markets negociate without a defined trend, and were initially influenced by the decrease of Euro during yesterday’s New York session and Asian today. In this context, the most cyclical stocks, including car manufacturers, should register a overperformance, as happened at the end of yesterday’s session. The decline of oil in Asian markets could generate selling pressure in the respective sector. The prevailing opinion in the oil markets is that air attacks on Shiite positions in Yemen should not restrict the transport of goods through the Red Sea, and should not ignite Shiite minorities in other areas of the Arabian Peninsula. The mining sector could also negotiate down after the Chinese government has said that 75% of Chinese iron producers are suffering losses in their activity due to rising operating costs and falling demand.

Today in the evening, the Prime Minister Alexis Tsipras will update the Greek Parliament on economic reforms that his government intends to implement and its discussions with European partners. In the Asian session, the price of the main raw materials traded lower. Despite continuous air strikes in Yemen and the apparent impasse in the negotiations between Iran and the sextet formed by the US, Russia, China, Britain, France and Germany, failed to have a positive effect on the prices of crude oil, which lost in the Asian session some of the gains made last week. The European technology sector may be excited by rumors emerged on Wall Street that Intel may acquire Altera by 10000 M.USD.

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.

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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.