Market commentary: Stocks rebound, but not enough to reverse the steep Q3 decline

During Yesterday’s trading, U.K. stocks rebounded from a two-day slide with the FTSE gaining 2.6%. They were boosted by stronger markets in the rest of Europe, as well as by sharp moves by J Sainsbury PLC and Glencore PLC.

Sainsbury shares gained 14% after the U.K. supermarket chain stated that they were expecting profits to fall less than expected this year. Morrison and Tesco also enjoyed an upturn on the back of the news from Sainsbury’s. The stocks increased 6 and 7 percent respectively. Other good news coming out of the UK was that the Commodities giant Glencore, jumped 14% after the company reassured investors that “the business remains operationally and financially robust.”

However, when taking this quarter in to consideration the FTSE slid 7%, making this the largest quarterly decline since September 2011. The sharp drop comes after a stretch of uncertainty over the slowdown in China’s economy, volatility in commodity prices and speculation over the timing of the first Federal Reserve rate hike.

In other European markets, there was also a solid rebound during Wednesdays trading. The Stoxx 600 gained 2.5%, Germany’s DAX 30 closed 2.2% higher and France’s CAC 40 index was up over 2.5. Despite the upturn European markets, this Quarter had produced the steepest quarterly decline in 4 years.

When it comes to single stock names Ferrari is on the radar as the Luxury brand is on track to scoop up to 10 billion-euro through an IPO. According to Bloomberg “Initial requests for the stock may exceed the amount available by more than 10 times. This comes after European auto companies shaved off about $50 Billion in market value following the emissions scandal that shook markets last week.

In the US stocks rallied, driven by gains in the Material and Health care sectors. The S&P jumped almost 2%, although the main indexes still ended the quarter with a steep loss.

There were mixed messages on interest-rate policy combined with worries of a China slowdown which prompted consecutive monthly declines while creating the most turbulent period for stocks in years.

Over all this quarter has been shadowed by events that prevented the markets from flourishing, from the rate hike uncertainty in the US, the Euro Zones standoff with Greece, the unclear picture of China’s current state and growth prospects and the cherry on the cake, the  emissions scandal that shaved 50BN in market value within a week.  Investors will surely feel that the wind has been against them as we head towards the end of the year.

This article was issued by Andrew Cassar Torreggiani, 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 & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.