Market commentary: US services rise higher than expected in November

US

The Dow and the S&P 500 indexes closed at record highs on Wednesday after data showed US services sectors rose more than expected in November. Energy companies were amongst the best performers as they rebounded following days of declines. The price of oil climbed after the government issued a report stating that the country’s strategic oil reserves were declining.

Investors are now awaiting Friday’s payroll figures. Positive figures will confirm the economy’s growth trend and provide another boost to markets.

Asia

China’s Shanghai Composite Index increased to its highest level in two years on speculation that Asia’s stock market is heading towards a sustained rally. The Index rose as much as 3.7 percent extending gains to 19 percent for the month. Investors in mainland China are rushing to open brokerage accounts sending trading to record highs.

Europe

European shares opened stronger on Thursday, following gains in the United States and Asia. Investors are expecting strong US growth, further support from Asian authorities and maybe Quantitive Easing from the European Central Bank. ECB President Mario Draghi will present the bank’s updated forecasts for growth in output as well as inflation at a policy meeting today. The Market will be mainly focused on signs that may indicate the ECB’s direction on QE.

Lufthansa

Pilots are on strike on long-haul and cargo flights on Thursday.  The stock is 1.7 percent up in early trading and is expected to continue trading upwards despite the strike. Airlines are the most sensitive to the oil price decline. Lufthansa is expected to profit greatly should the pilot discussions be resolved.

EasyJet

EasyJet is 4.6 percent up in early trading this morning they reported increasing load factors. The impact of a declining price of oil is also starting to be priced into the airline sector. An efficient management structure and a good business model put EasyJet at the forefront to capitalize from declining commodity prices.

Allianz

PIMCO the world’s largest Bond manager and owned by Allianz posted net outflows of over $12billion in November. Although outflows from the asset manager have not abated since Bill Gross left the firm, the figure contrast greatly against the previous month’s $48 billion redemptions.

Volkswagen

Volkswagen’s premium carmaker Audi aims to continue expanding in Russia despite sanctions and a weak economic outlook. Russia remains an important region for the carmaker and further deterioration of the relationship between the EU and Russia may impact the stock’s performance.

This article was issued by Mr. Antoine Briffa, Investment Manager at Calamatta Cuschieri. For more information visit  www.cc.com.mt .

The information, view and opinions provided in this article is 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 & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. 

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