Cautious markets and hopes for a smooth Brexit | Calamatta Cuschieri

European markets initially opened lower weighed down by lower pharmaceutical – with heavy weights Novartis and Roche – and financials – Lloyds, UBS and Italian Banks. Furthermore, worries from next month’s Italian referendum on constitutional stability, which could create political instability, also had its impact.

Market sentiment improved, later on, turning the markets in the green region, after British Prime Minister Theresa May indicated a transitory deal might be in place for the years after the country exits the European Union. In fact, Britain may adopt a platform trying to keep the country in a single market to avoid businesses suffering a sharp shock. May also mentioned a fiscal boost for innovations and research and a cut in corporate tax. Moreover, gains in mining and energy markets also helped limit the initial broader market loss, as the sectors benefitted from the rising metal prices.

Though the broader market sentiment remained positive, the likelihood that the US Federal Reserve will raise interest rates next month and concerns over the Italian vote is keeping the overall market in cautious mode.

Currency corner

The US Dollar weakened against its major rivals, following a ten consecutive days of gains, the longest winning streak for the greenback in three years. The expectations for higher interest rates by the Federal Reserve and the fiscal stimulus following the election of Donald Trump helped to support the high value of the currency in the last days. Today, against its Euro counterpart, the US dollar was down by around 0.17%.

Worries from next month’s Italian referendum on constitutional stability had its impact on markets

Talking oil …

Energy prices continued to extend gains, trading around 3% in the green and reaching the highest levels in the past three weeks, with prospects of a deal on production cuts among major oil producers in the next OPEC meeting on 30 November in Vienna. Despite the still strong US Dollar, favourable events helped to up the price of oil, including Russia agreeing on oil freeze and Iran’s optimism on the upcoming event. Moreover, on Wall Street, the increase hopes of a deal in oil production, led the major indexes in the green area. The Nasdaq 100 set an all-time high while the S&P 500 traded above its record close. The Dow Jones Industrial Average started the day 0.25% in the green.

Tech and banks

Barclays Bank will be the first British Bank to allow customers to withdraw – for now up to a £100 from cash machines – just by tapping their Android Smartphone or contactless debit cards. The bank followed the steps of Bank of America, which launched contactless withdrawals earlier this year. Despite security concerns, Barclays stated that the new feature is more secure than traditional withdrawals since the innovation removes the magnetic card skimming and distraction fraud.

American Technology Company Symantec, announce it will acquire US identity theft protection services company Life Lock Inc. for $2.3 billion, in hopes, this will increase sales at its Norton cyber security unit. Norton, although still profitable saw its sales declining, as customers use mobile devices more than traditional computers. The company is expected to finance the transaction with cash and $750 million of new debt. Symantec shares performed positively adding around 4.5% and Life Lock Shares jumping 15% at market open.

This article was issued by Rodrick Duca, Trader 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 Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.