Market commentary: Bull market celebrates anniversary

Worldwide stocks performed better on Wednesday. In Europe, banking shares were among the leading gainers on expectations of a European Central bank stimulus, while energy shares were also lifted thanks to an advance in crude oil futures. Meanwhile, in the US, Wall Street was trading higher, as oil prices rose on hopes of major producers agreeing to freeze output.

The German DAX and France’s CAC 40 were both trading in the green ahead of what is expected to be another round of easing from the ECB. Meanwhile, the UK’s FTSE 100 was under pressure and remained little changed at 6,125.94, losing ground late in the session, though still closing in positive territory. There was also good news in the US as advancing issues greatly outnumbered decliners on the NYSE.

The bank sector index rose 1.5% with Credit Agricole leading the way. The French bank pledged to boost cost savings by 2019, sending its shares up. Elsewhere in the sector, Italy’s Intesa Sanpaolo and France’s Société Générale both rose more than 2%, while Spain’s Bankiter added 1.8%.

Telecom Italia was one of the best-performing stocks in Europe, rising around 4% after comments by Italian and French leaders that they wanted to create major companies that can compete in Europe.

In the automobile industry, Volkswagen shares fell as much as 3%, but managed to recover some losses as an analyst warned the carmaker might need to make a big cut to its dividend to help pay for the growing number of regulatory and judicial probes over its emissions test cheating. The stock closed 0.85% higher at €113.25.

Staying in the automobile industry, BMW appears to risk looking its lead in the luxury car market to Mercedes-Benz. This was after BMW saw its shares trading lower, with the company predicting only a slight increase in deliveries since it is taking a cautious approach for the year. The carmaker also disappointed some investors by not offering a special dividend as it celebrates its 100th anniversary.

Wednesday was a milestone date, as it marked the seventh anniversary since the S&P 500 hit the bottom, giving birth to the current bull market. Since 9 March, 2009, the S&P 500 gained 215%.

In the meantime, investors are looking ahead to the ECB policy meeting on Thursday, where all eyes and ears will be on Central Bank president Mario Draghi. Many expect the ECB to cut the banks’ deposit rate and to introduce further easing for the Eurozone. One will have to wait and see whether Draghi is capable of bringing back confidence in a recovery!

This article was issued by Rebecca Naudi 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.