Stock Markets – Closing Note - 11 Oct
Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
As anticipated, the fall in US markets and its rapid spread to Asian stock markets intensified risk aversion on European markets. The strong rise in yields and worries about global economic growth were at the root of this negative sentiment among investors. Thus, the financial and technological sectors led the falls. The oil sector also conditioned the performance of European indices on a day when the price of oil fell by more than 1%. In the corporate field, shares of BMW fell 1.49% after news of the investment of 4200 M.USD in the joint venture with China's Brilliance Auto.
The US market was trading lower, although losses were being mitigated by the posting of lower-than-expected inflation. Inflation relative to September, measured by the consumer price index, was known today. This index reached 2.30% in annual terms, compared to the expected 2.40% and the previous 2.70%. If we exclude the most volatile goods (core version), it grew 2.20% below the expected 2.30%. As a result, Treasury Bond yields retreat from recent highs: 10-year Treasury Bond yields traded at around 3,167%, after having reached the highs of the last 7 years in recent days. It should be remembered that it was this upward trajectory of interest rates that aroused investor fears about the future of the monetary policy of the Fed, which yesterday was exacerbated by the comments of President Trump criticizing the Central Bank's actions. Already today, Donald Trump gave an interview during which criticizes the policy of the institution for being 'too aggressive.' On the labor market, the number of weekly applications for unemployment benefits showed a slight increase during the month of October, although it remained at minimum levels from the 60s. This indicator increased from 7,000 to 214,000, compared to 207,000 estimated.