After the Thanksgiving Day
The overall enthusiasm around the riskier assets, including with the 10-year yields profitability decline on the background, moved the European fund indices towards new records. DAX has returned to its June values, while EURO STOXX 50 is traded at its maximums from the end of February this year. The so-called fear index VIX demonstrates a stable descending tendency, confirming the stocks market mood.
The further discussion of the ECB and Fed being ready to slow down the pace of key rates going up would help the indices grow. Let’s also remember a clear business activity slow down in France, Germany and in the Euro Zone in general. This report increases the risk of the monetary policy slow down in the EU. As a result, we see a decline in the 10-year yields profitability and stocks growth.
Last week leaders and outsiders:
DAX:
Top: Vonovia SE +5.74%, Siemens Energy AG +4.13%, Covestro AG +3.53%
Ни одна акция из этого индекса не потеряла более 1% в четверг, 24 ноября.
EURO STOXX 50:
Top: Vonovia SE +5.68%, PROSUS NV EO +2.84%, Bayer AG +2.78%
Flop: Inditex -1.19%, ENI S.p.A. -1.0%
As you can see, the European stock market has returned to the green zone being present almost in full. If we speak about the stocks composing the DAX index, it is very few securities which could not make it above 0. However, none of them lost more than 1%. Meanwhile only 2 out of 50 securities composing the EURO STOXX 50 index finished the last day with a 1% loss or above.
Bond market:
The 10-year yields profitability continues to go down. Pay your attention to the Germany and France values, they returned to their minimum from October and September accordingly. This is a clear marker of the market awaiting the ECB monetary policy being softened. It is still not about the key rates reduction. But the investors are getting ready for it in short term. Consequently the focus is being shifted from bond instruments to riskier assets.
Oil market
The celebration of Thanksgiving in the US has reflected in the oil trading dynamics. The oil market may also remain calm today. But after a long weekend in the USA, Monday may be very volatile. Of course, first of all we need to evaluate the China situation. New cases of COVID may crush the oil quotes, but still let’s consider the OPEC+ role in it.
Another bullish fundamental factor is the growth of the fund indices. It partially compensates the negative consequences of the business activity slow down in the manufacture field in the majority of the countries.
The following week’s start may end up very active, not only with the oil market. One should consider that, especially if you are planning to leave your positions open until Monday.
