Market Commentary | The Week In Review

Last week European Market's positivity progressed by some encouraging company updates with some of them recording strong sales

Last week European Market's positivity progressed by some encouraging company updates with some of them recording strong sales. London’s FTSE 100 closed flat up 0.05% at 6,724.43 while Germany’s DAX gained 0.61% to 10,337.50. Financial services were in demand, with the EURO STOXX 600 Banks index topping the gainers with a rise of around 2.1% before the release later on of Europe-wide banks stress tests.

Italy’s Monte Dei Paschi Di Siena, which was expected to be among the worst performing banks in the stress test, rose by around 6% over some optimism over a rescue plan, which includes a 5 billion euro in the capital increase.

Barclays bank rose 5.5% amid a report of a 21% dip in the first half pre-tax profit. However, profits from its core businesses, which included its consumer and commercial lending, credit cards and investment banking, rose 19%.

On Wall Street, the S&P 500 index hit a record intraday high, as gains in technology heavyweights Alphabet and Amazon were high enough and made up for the losses in energy shares. The index rose 0.3% touching an all-time high of 2,177.09.

Google parent Alphabet jumped 3.33% after the company posted a strong quarterly revenue growth contributing also to the gains made by NASDAQ.  Meanwhile, online retailer Amazon touched a record high beating the forecast for the current quarter. On the other hand, a 1.48% drop in McDonald’s and 1.39% fall in Exxon, which reported lower-than-expected quarterly profits, dragged down the Dow Jones closing at 18,432.24.

US gross domestic product grew only by 1.2% rate coming in short of expectations, in the second quarter, fuelling arguments the Federal Reserve may not need to raise interest rates anytime soon. On the bright side, US consumer activity was quite robust, but the weak corporate investment was a drag on the headline growth.

In Hong Kong, the yen rose and the biggest rise in Japanese government bond yields lifted sovereign borrowing costs around the globe, after the Bank of Japan’s (BOJ) latest measures to boost growth and inflation fell short of expectations. The Hang Seng Fell 1.28% to 21,891.27 while China’s Shanghai composite index lost 0.5% to 2,979.34.

Japanese Shares seemed to digest the BOJ decision a little bit more easily. This may be due to the increase in the exchange traded funds in its easing package, although maintaining its base money target at Yen 80 Trillion. Meanwhile, the interest rate was held at 0.1%. 

Oil prices continued their decline, with West Texas Intermediate crude falling to $40.70 per barrel from $44.38 the week before. Global Brent crude dropped to $40.72 from $45.83 last week.

Disclaimer:
This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit
, www.cc.com.mt . The information, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.