2010-07-19 11:48

XTB market snapshot

Low value of the July Michigan Consumer Sentiment Index (66,5 against 76 in June and 75 expected) was an impulse for a sell-off on Wall Street. S&P 500 fell 2,88% to 1064,88, Nasdaq Composite 3,11% to 2179,05 and DJIA 2,52% to 100097,90. The market situation on Monday shall show whether it was just a one-time event or a warning before a change of sentiment.

Macroeconomic figures in the spotlight

The fact that the Friday fallback was caused by the MSCI release, makes the investors focused on the upcoming releases, particularly the US Housing Market Index. It won’t be the only important event though. The semiannual FED report on monetary policy before the Congress may also influence the sentiment. So may the Ifo Index release, as well as the second-quarter GDP estimates in the UK and Friday stress-test results in the European banking sector.

Results season won’t necessary be helpful

On a wave of a sudden sentiment worsening, stocks of companies releasing their quarterly results on Friday also went down. General Electric fell 4,6%, Citigroup 6,2% and Bank of America 9,2%. Today’s reports of Halliburton (0,36 dol. a share estimated), IBM (2,57 dol. EPS) and Texas Instruments (0,62 dol. awaited) may confirm or deny the thesis that better-than-awaited results may no longer impact the sentiment.

Euro gains despite the negative information

Monday morning brings a strong appreciation of the euro. EUR/USD tested on 9:45 a.m. the 1,2975 level against 1,2876 just an hour before. What’s particularly important, the appreciation of the European currency happens despite worse sentiment on global markets, the downgrade of Ireland by Moody’s and the collapse of Hungary, IMF, EU talks, concerning financial support for Hungary. This shows the power of the euro, especially as it gains not only against the dollar but also the Swiss franc, the Japanese yen and the British pound.

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