Trend’s getting changed or adjusted?
European indices resumed their growth with the start of the session on Friday. DAX and EURO STOXX 50 have gained 1% within the first hour of the session in Europe. Moreover, we observe a decline in the seller activity and even a sideways movement formation. And then comes the question – Has the market reached its bottom?
Last trading session leaders and outsiders:
DAX:
Top: Porsche Automobil Holding SE +2.38%, Covestro AG +2.36%, Siemens Healthineers AG +2.36%
Flop: PUMA SE -2.75%, adidas AG -2.74%, Deutsche Börse AG -0.84%
EURO STOXX 50:
Top: Münchener Rück AG +2.5%, Bayer AG +2.25%, BASF SE +2.0%
Flop: adidas AG -4.21%, PROSUS NV EO -,05 -2.29%, CRH plc -2.01
Dow Jones (us 30):
Top: Microsoft Corp. +1.47%, American Express Co. +0.91%, Amgen Inc. +0.73%
Flop: Nike Inc. -9.83%, Walgreens Boots Alliance Inc. +-6.1%, Procter & Gamble Corp. +1.56%
As you can see, not all the securities demonstrate a unified directional movement. Sportswear brands remain outsiders on both continents, reflecting the overall buyer activity decline. Consequently, it is too early to talk about the trend change; growth of any form proves to be correctional. Considering the above, retailer securities remain very vulnerable.
Bond market:
The bonds situation has also changed. The majority of European countries have lost in their 10 year yields profitability, not critical, however. This decline does not clearly suggest a global mood change, but it indicates that the panic has eased a bit. Regional inflation level remains very high, which can signify an increase in the rates. All of that indicates bullish trend sustainability on the bond market.
Oil market:
This week, Brent has reached the $90/barrel psychological level while the American WTI returned above $82. Even though there have been certain successes in the second half of the week, oil ends up in the red zone in this quarter. It is worth mentioning that it is the first quarterly decline since 2020, which is based on world’s economy recession expectations.
The greenback getting stronger has not only affected the oil, but also all the other commodities. We also noted gold being sold p proactively, but the situation is normalizing now. Nevertheless, we don’t talk about the trend’s change just yet. The key fundamental bearish factor remains intact – high inflation level. The current gold rate increase may turn out to be short term.
