Trading Journal

Asian stock markets ended in different directions in a session where the Chinese and Hong Kong markets were closed. Retail sales in Japan were up 3.20% from the previous year, an increase higher than expected (2.30%).

In the pre-opening, the European markets traded slightly lower. Despite the encouraging economic data published on the Chinese economy, the European political landscape continues to be a source of concern for investors, particularly in the UK, given the forthcoming elections scheduled for 8 June. The latest polls suggest that in these elections Prime Minister Theresa May may lose the majority in Parliament. In recent days, her margin over the Labor Party has been narrowing. Theresa May called these early elections to strengthen her parliamentary position and could thus have more power in the Brexit negotiations. Consequently, the Pound depreciated against the major currencies. In sectoral terms, producers of raw materials and the banking sector should be closely monitored.

In the pre-opening, the European markets traded with gains. On this first day of June, and just a few days before the UK elections, politics remains one of the topics that most attracts the attention of investors. In fact, the issue of European integration is a subject that remains on the agenda, so the interventions of some of the heads of the European Central Bank will be closely monitored. The European Commission presented yesterday a discussion paper on the deepening of economic and monetary union, which proposes that an agreement be reached by 2019 on the two remaining mechanisms to complete the banking union: the single bank resolution fund and the fund European deposit guarantee. In addition, the oil price trajectory has also been monitored at a time when, according to Reuters, concerns remain that production cuts agreed by OPEC are being hampered by the various countries that are excluded from the agreement. Yesterday, the price of this raw material reached a minimum of three weeks, after Libya increased production. In sectoral terms, commodity producers and the banking sector will continue to be the focus of investors.

In pre-opening, European markets traded on a positive note as investors wait for the publication of the US employment report and digested Donald Trump's pulls out of global accord on Climate Change, thereby making the US one of the three countries , Along with Syria and Nicaragua, which are out of the accord. This exit from the accord will not be immediate, and the process of untying should not be completed before November 2020, the same month that should go to votes for his re-election.

Last Friday, US stock indexes reached new highs, although the employment report was less encouraging. The Labor Department has revealed that the US economy has created only 138,000 jobs, compared to the forecast of 180,000. The unemployment rate fell from 4.40% to 4.30%, thus reaching the lowest since 2001. Also the value of April was revised downwards from 211 000 to 174 000. In reaction, the Dollar lost value in relation to the main currencies, especially against the Euro. On the other hand, average hourly wages increased by 0.20% over the past month and by 2.50% year-on-year. This report has revealed a certain slowdown in the labor market, which may give rise to some fears about the country’s economic performance, which in the first quarter had been lower than estimated.

Last Friday, US stock indexes reached new highs, although the employment report was less encouraging. The Labor Department has revealed that the US economy has created only 138,000 jobs, compared to the forecast of 180,000. The unemployment rate fell from 4.40% to 4.30%, thus reaching the lowest since 2001. Also the value of April was revised downwards from 211 000 to 174 000. In reaction, the Dollar lost value in relation to the main currencies, especially against the Euro. On the other hand, average hourly wages increased by 0.20% over the past month and by 2.50% year-on-year. This report has revealed a certain slowdown in the labor market, which may give rise to some fears about the country’s economic performance, which in the first quarter had been lower than estimated.

European markets ended down, with investors waiting for the UK elections and the ECB meeting.
Most sectors finished lower, with pharmacists among the worst performing performers after Roche had disappointed the market with the result of a test for a particular treatment. Roche shares fell more than 5%.

In pre-opening, European markets traded with different fluctuations, on a day that would naturally be characterized by an expectant attitude towards tomorrow's events that could certainly influence financial markets: the UK elections and the ECB meeting . In the more microeconomic field, the banking sector will attract attention, due to the news about Banco Popular. In the long run, equities are influenced almost exclusively by the evolution of corporate profits and interest rates. Most likely, the recent appreciation of European equities is due to an intrinsic factor, in particular to capital flows that continue to flow into Europe. According to Merrill Lynch Bank of America in May, American savers subscribed about 15,000 M.USD in European shareholder funds, to the detriment of US specialized stock funds. As long as these subscriptions are not discontinued, European markets will continue to benefit from this support element.

In the pre-opening, the European markets negotiated with contained gains. For political and economic reasons, today was the most awaited by investors because of the elections in the UK and the ECB meet, as well as the testimony of the former FBI director fired by President Trump. With regard to the legislative elections in England, it should be remembered that although the legislature should only end in 2020, Prime Minister Theresa May called early elections in order to reinforce her majority in Parliament and, consequently, her internal position in the conduct of the Brexit process. The polls open at 7:00 a.m. and close at 10:00 p.m. Regarding the possible reactions of the market to the outcome of the elections, opinions are divided. A minority victory of Congressmen or an indefinite result would, according to some investors, increase political uncertainty but on the other hand would increase the likelihood of a more conciliatory stance of the UK in the process of leaving the EU, called Soft Brexit. A victory for Theresa May would make the future English politician more crystalline but would reinforce the likelihood of a more intransigent UK position, dubbed Hard Brexit. Concerning the ECB meeting in Tallinn (Estonia), no changes are expected in the current monetary conditions, but there is an expectation of the statements made by Mario Draghi in order to try to gauge the future performance of the ECB. Markets are therefore awaiting news on macroeconomic forecasts. The big question is what will be the rhythm of monetary policy normalization, which will first happen by reducing the asset purchase program and later by the increase of the leading rates.

The US stock market ended up high, with investors reacting fundamentally to the testimony of former FBI director James Comey. The Dow Jones industrial average hit an intraday high following James Comey's comments, though he backed down. The S & P500 closed at a slight high, favored by banks (the SPDR S & P Bank ETF rose more than 2.50%) and conditioned by utilities. The testimony of the former director of the FBI was the event of the most awaited week and was closely monitored by investors to check on the possible impact of James Comey's words on the implementation of the pro-growth agenda announced by Donad Trump . In terms of economic indicators, the number of weekly applications for unemployment benefits decreased in the first week of June, thus being at least a few decades old. This indicator fell by 10 000 to 245 000 between 28 May and 3 June. Analysts had forecast a further decline to 240,000 applications, but for the 118th consecutive week that figures were below 300,000, signaling a healthy labor market. This is the longest series since 1970, when the labor market had a smaller size.

Investors are showing some caution after the results of the UK election and expectations of the Fed meeting scheduled for this week.

Asian markets ended on mixed ground. Despite the significant drop in technology companies in the US, Asian counterparts presented different directions. Investors are waiting for the start of the US Federal Reserve meeting.

In the pre-opening, the European markets negotiated in different directions. The main theme of the day is the US Federal Reserve meeting, but whose outcome will only be known after European markets close. However, political developments in Europe will continue to be in the spotlight. With regard to the United Kingdom, the leader of the DUP, the Irish unionist party that Theresa May counts on to guarantee the parliamentary majority, said yesterday that the negotiations are “going well” and there should be an agreement “sooner rather than later.” The BBC also said that the agreement could be sealed today. In terms of business, the Spanish company Inditex today presented its results for the first quarter of the year. Net income rose 18% to 654 M. €, in line with analysts’ estimates. Sales were slightly above expectations (€ 5569 M.) and EBITDA stood at € 1113 M., against the expected € 1103 M. €. In terms of economic indicators, industrial production relative to the Euro Zone will be published.

US stocks dropped while the dollar advanced as traders digested the more hawkish tone from the Federal Reserve. The British pound swung to a gain after a split among policy makers over the path of interest rates unexpectedly deepened. The Fed raised interest rates for the second time in 2017 and Chair Janet Yellen suggested the strength of the U.S. labor market will ultimately prevail over recent weakness in inflation.

In the pre-opening, the European markets negotiated in positive territory. The influence of the markets should be the agreement on Greece, while political developments, especially in France, should return to attract attention, since on Sunday is the second round of the elections to Parliament. Meanwhile, oil prices are close to the low of the last six months, in the face of continued fears of over-production and despite OPEC's efforts to reduce supply. The final estimate of inflation in the Euro Zone for May will be published today, which should confirm a correction of 1.90% to 1.40%, due to the general fall in prices in the main countries of the region. It should be recalled that price behavior will be decisive in shaping market expectations regarding the ECB's monetary policy.

Asian stock markets ended on a positive note as attention turned once again to the European political landscape, including the negotiations on Brexit.

Oil dropped to the lowest level in seven months, pulling energy stocks down, amid growing concerns that OPEC-led output cuts are failing to ease a global supply glut.

After a long wait, Chinese equities will finally be part of the MSCI Emerging Markets Index. Thus, 222 listed companies in China will integrate this index which is the benchmark for many international fund managers. It is important to note that China already had a weight (26%) in the MSCI Emerging Markets through companies listed on the Hong Kong stock exchange.

The European stock indexes ended without major fluctuations, although they traded most of the day in negative territory.