The European Indexes consolidated near highs and investors evaluated data on labor, production and housing to measure the strength of the US economy. The US markets will be closed tomorrow for the Thanksgiving day.
Six of the top 10 industries in the SP500 rose today, with telephone and technology companies presenting the greatest gains. Energy shares were the most depreciated, falling 0.6% before the OPEC meeting tomorrow. Deutsche Telekom said that together with the French Orange is in preliminary talks with the British group BT to launch an offer on the Franco-German joint venture EE.
In order to stabilize crude oil prices, Saudi Arabia led negotiations with Venezuela, Mexico and Russia, to reach an agreement to reduce production. Although the OPEC countries are favorable to a decrease in production, the share of each member is a source of contention.
The US economy grew 3.90% in the 3rd quarter of this year, surpassing not only the estimates of economists (3.30%) as the initial forecast of the Commerce Department, the public agency responsible for the calculation of GDP. Contributing to this upward revision were private consumption (+ 2.20% vs 1.90% estimated) and investment (10.7% vs 5.50% predicted). On the negative side, exports have been revised downwards as well as public spending.
Inflation linked to GDP increased by 1:40% in the 3rd quarter. The price of real estate in 20 major US metropolitan areas increased, year on year, 4.90% in September. Consumer confidence unexpectedly fell from 94.5 seen in October to the current 88.7.
Due to the celebration of the Thanksgiving Day tomorrow and the reduced session on Friday, it is not excluded that at the end of the day some managers reduce their market exposure. While we celebrate the Day of Action Thanksgiving, OPEC will meet in Vienna and will decide if production decreases, a decision that will influence the price of oil and reflection of the equity markets. On the same day, various data will be reported in Europe. Therefore, it is not excluded that many American managers who will only return to their trading rooms on Monday take a prudent stance.
The European Indexes showed some gains today. From a macroeconomic point of view, this week will be important to to understand the current economic situation. The indicators on this week should condition the economic projections of the ECB at its December meeting, as well as their propensity to implement a sovereign bond buying program.
Oil fell to a four-year low after OPEC kept its oil production unchanged at today’s meeting, dragging down the shares of energy companies, Gulf-region stocks, and the Norwegian krone. The oil market is facing a revolution with the production of oil shale in the US. This revolution allowed the US to increase by 50% its production of oil in just two years.
Today was the Thanks Giving Holiday in the United States, and as expected, a day with less volume in the markets. Yesterday US markets closed with modest gains. The costs of American families grew 0.20% in October, offsetting the fall 0.20% observed in September. For the real estate market, sales of new homes during the month of October reached the 458,000, representing an increase of 0.70% compared to the estimation of 470,000. Compared to the previous year, the growth was 1.80%. This data reinforces the perception that the housing market has entered a new phase of expansion after the standoff in the summer of 2013. The Chicago manufacturing activity index PMI recorded a fall in November for 60.80, against the estimation of 63.00.
US shares rose, after the SP500 Index retreated the most in more than five weeks yesterday. This rise was influenced by the rise in the prices of biotechnology and energy companies and data on construction spending supported the confidence in the economy.
The SP 500 fell 0.7% yesterday, the biggest drop since 22 October, with weaker sales data from Black Friday.
Today’s data showed that construction spending rose more than estimated in October. The government labor report, later this week, may reveal that companies added 230,000 payrolls in November, while the unemployment rate is expected to remain at 5.8%, according to the consensus forecast by economists .
Yesterday the major stock indexes ended the session in positive territory, with the optimistic investors believing that new monetary stimulus measures will be announced on the ECB meeting, next Thursday. Leading the gains were the companies in the oil sector, recovering from six consecutive sessions of declines.
Asian markets ended positive with the Chinese market leading the gains after the improvement in the indicator of services in the country.
In macroeconomic terms the disclosure of Retail Sales in the euro area were in line with expectations and in the afternoon the attention will be turned to the ADP Employment Change, Nonfarm Productivity, Unit Labor Costs and ISM Non-Manf. Composite, Beige Book in the United States.
Auto sales in the US showed the following numbers: BMW (-2.3%), Mercedes (00:58 +%), Volkswagen (+ 3.2%), Audi (+ 22%) and Porsche (+ 18%).
Siemens Engineering signed a contract worth 1.3 billion zlotys for the construction of a power plant and heating for the largest refinery in Poland, PKN Orlen to.
Shares recovered after an initial decline after the European Central Bank, mention about considering a proposal for an assets buying program, which may include sovereign debt purchase as early as next month.
U.S. stocks rose, with equities heading for a seventh weekly gain, as better-than-estimated payrolls data bolstered the case that the economy is strong enough to withstand an increase in borrowing costs next year.
Employers in the U.S. added 321,000 jobs in November, the most since January 2012, driving wage gains and highlighting increased corporate confidence the economy will endure a weakening in global markets.
Stock market rises at the end of last week were driven by speculation on the possibility the European Central Bank (ECB) decides to adopt a comprehensive program of economic stimulus after the meeting of this institution in January.
Asian markets ended positive. Data released in China showed that exports rose 4.7% in November, well below expectations of 8.0%. Imports fell 6.7%, while economists had expected growth of 3.9%. However, revised data showed that Japan’s economy contracted for the second consecutive quarter.
The major indexes fell today mainly due to falling energy producers with Crude at 5 years lowest value.
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