Volatility is back with the market
The week’s start was very optimistic as the FED slowed down the pace of the key rate increase. With that we can notice a considerable growth of American and European stocks. E.g., in just two days after the week’s start EURO STOXX 50 has grown 7.6%, DAX – 7.3% and Dow Jones (us 30) settled on 6.1%. But on Wednesday the buyers’ activity reduced. The risk of descending movement is growing even though there aren’t any active sales.
The yields profitability of most of the EU countries has started to grow which is a bad sign for stock market buyers. We’ll speak about it a bit later on, now let’s have a look at outsiders and leaders of the American and European markets.
Last session leaders and outsiders:
DAX:
Top: Zalando SE +3.2%, Porsche Automobil Holding SE +2.58%, Sartorius AG Vz +2.2%
Flop: E.ON SE -2.9%, Münchener Rück AG -2.6%, RWE AG St -2.59%
EURO STOXX 50:
Top: PROSUS NV EO -,05 +1.7%, Volkswagen AG Vz +1.42%, BNP Paribas S.A. +1.22%
Flop: Münchener Rück AG -2.95%, Air Liquide S.A. -2.59%, Deutsche Telekom AG -2.49%
Dow Jones (us 30):
Top: Chevron Corp. +3.01%, Nike Inc. +2.71, The Walt Disney Company +2.22%
Flop: Verizon Communications Inc. -1.06%, Johnson & Johnson -0.55%, IBM Corp. -0.54%
Considering the oil market is recovering, the energy sector companies’ securities start to look attractive again. Chevron Corp remains the leader of Dow Jones growth, E.ON SE – European DAX counterpart. Automakers took the leading positions on the European market.
Bond market:
After a moderate decline in 10-year yields of most of the EU countries, there’s another rise. This is a very negative fundamental factor for bonds market. An increase in the profitability of the bonds means the market players are expecting an increase in the key rates, which is exactly a bearish factor for riskier assets.
Oil market waiting for the OPEC+ meeting
OPEC+ has taken the decision to lower down their own extraction volumes to 2 mln barrels, which returned the WTI quotes to above $89/barrel and Brent to $95. Even though there’s still a risk of a considerable world economy slow down, the buyer activity on the oil market is still high. Let’s remember that the US will finish the strategical release of the oil in November, thus increasing a deficit in the demand.
Traders who use the American WTI should pay their attention to the technical resistance level which is at $90 per barrel. Brent has also almost reached the closest and strongest resistance level – $96.
