Europe Stock Exchange: FTSE 100, STOXX, CAC40, DADX, SMI
In these traps we believe the geopolitical premium embedded in commodity prices has already been written down, despite current risks, which could present an opportunity to increase allocation in the portfolio. Sentiment in Europe was mixed.
The German DAX fell 0.71%, remaining under pressure from global sentiment deterioration and weaker industrial prospects.
The French and British markets performed better, with the CAC40 up 0.54% and the FTSE100 up 0.31%.
After a session characterized by a sideways trend slightly above the threshold, the pan-European STOXX closed up 0.08%.
We observed strength in Switzerland, where the SMI strengthened after a 1.49% gain.
Further dollar strengthening is noteworthy: EUR/USD fell to around 1.135, adding pressure on assets of EM basket countries.
Warsaw Exchange - what's on the GPW?
The Warsaw exchange surprised negatively, overvaluing the strongest on the continent. The index of national blue chips WIG20 was overvalued by 2.49%: mainly energy companies weighed heavily, which is well illustrated by the overvaluation of the WIG-Energy index, which lost 4.12%.
Consumer and retail companies performed better, including Żabka (+0.73%), Budimex (+0.64%) and Pepco (+0.56%). The second and third lines of companies performed poorly.
The mid-cap index, after a strong sell-off in the early minutes of the session, closed 1.28% weaker. After a downtrend session, the smallest companies lost just under 1%. The broad market index WIG was overvalued by 2.02%.
Domestic capital fleeing equity assets found a haven in debt, which we observed after a decline in yields: the yield on benchmark 10-year bonds is 5.409.
US Stock Markets: Nasdaq Composite down 0.65%, and S&P500 lost 0.25%
After the big water we observed risk being dumped from portfolios. The Nasdaq Composite fell 0.65%, and the S&P500 lost 0.25%. Only the defensive Dow Jones ended the day up 0.35%. Investors also price in further rate hikes, supporting the dollar and negatively affecting growth stock valuations. Of course, the most awaited event on Wall Street was Micron's report.
The company released results clearly better than expected and raised revenue forecasts for the current quarter, confirming the sustained strong demand for memory used in AI infrastructure. The company's gross margin was 84.9%, and the Data Center segment revenue in Q3 exceeded 20 billion USD. In the household trade, the producer's shares rose over 9%, which may today support sentiment toward the entire tech sector.
Asian Stock Markets: Stocks and indices - listings
The morning view of Asian markets presents an optimistic picture. The strong rebound on KOSPI (+6.34%) is not surprising, benefiting from improved sentiment after the strong Micron report: Samsung (+6.17%) and SK Hynix (+14.85%) are gaining strongly.
The buying advantage also manifested in Japan, as seen in the rising Nikkei – the index is up 4.53%. An hour before the European market opens, demand also dominates in India: Sensex up 0.77% and Nifty 0.70%.
Sentiment looks decidedly worse in China, especially in Hong Kong, where the Hang Seng (-1.70%) continues its southward rally.
Commodity Prices: Gold, Silver and Oil are losing value
Morning continues the overvalued oil: the Brent contract trades below $73 per barrel. Precious metals are slightly overvalued: gold (-0.36%) and silver (-0.35%).
The most important publication of the day remains US PCE inflation, which we will learn after 2 PM. The futures market for European and US indices exudes green, indicating a good opening for the cash market. Today is likely to bring relief to markets that clearly needed it.
