By IFCMarkets
On Monday, the US stock indices rose and updated historic highs
The US Senate approved the extension of government funding until February 8 of this year. After this the spending bill will be submitted to the House of Representatives for approval.
All this, in fact, cancels the risks of the government shutdown and increases investors’ optimism. So far, 55 companies from the S&P 500 list have reported. The profit of 44 of them exceeded preliminary forecasts. Currently, the majority of market participants are expecting the growth of the S&P 500 net profit by 12.4% in the Q4 of 2017. At the beginning of the earnings season the growth forecast was 12.2%. The highest increase was demonstrated by the stock quotes of the oil company Halliburton (+ 6.4%) due to its positive earnings report. The US dollar index almost did not react to the approval of the short-term spending bill and continued small fluctuations near its 3-year low. Today, no significant US statistics are expected to be published.
On Monday, the European stock prices rose following the US
The positive trend continued on Tuesday as well. The German stock index DAX updated its historic high due to the publication of positive economic indicators in Germany, calculated by the Center for European Economic Research (ZEW).
Among the European companies, Easyjet (+ 5.3%), Carrefour (+ 6.4%) and Logitech (+ 4.2%) demonstrated the highest growth. This occurred due to the publication of positive quarterly earnings reports and forecasts. The euro is showing minimal fluctuations in anticipation of the next ECB meeting, which will be held on Thursday, January 25, 2018. Investors do not exclude that the ECB representatives may announce a monetary policy tightening. Such expectations contributed to the growth of the euro to the 3-year high. Today at 16-00 CET the eurozone consumer confidence index will be released. The outlook is positive.
Nikkei continued to grow on Tuesday and updated the 26-year high (since November 1991)
The stocks of Torii Pharmaceutical increased by 4.6% after the publication of a positive outlook for the company’s profit. Thanks to this, the index of the Japanese pharmaceutical sector grew by 1.2%. Also, the stocks of precision engineering and real estate companies were in demand. On Tuesday morning, the Bank of Japan meeting was held. It maintained its super-soft monetary policy. The head of the BoJ Haruhiko Kuroda said that in the current situation there was no need to raise the rate of minus 0.1%. The yen strengthened slightly after that.
Oil prices continue sluggish decline
Oil prices slightly increased after the International Monetary Fund review. The IMF raised its forecast for the global economic growth to 3.9% in 2018-2019. This is by 0.2% more than in its October review. Higher growth rates are expected to contribute to an increase in world oil consumption. The French bank BNP Paribas raised its forecast for oil prices by $10 in 2018 and expects the average price of WTI to be $60 per barrel and $65 for Brent. Bank Barclays raised the forecast of the average annual price of Brent by $5 to $60 per barrel.
On Tuesday, soybean prices have been rising for the 7th day in a row amid the drought in Argentina.
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