U.S. and European markets on Monday – what happened?
The lack of resolution regarding the Middle East increasingly weighs on markets in countries that are net importers of energy commodities. Consequently, yesterday's session was not successful on many other Old Continent exchanges either.
At the close, Germany's DAX and France's CAC40 recorded a discount of about 0.2%.
The U.S. equity market again did not succumb to rising anxiety over the deadlock in U.S.–Iran talks.
The S&P 500 index gained 0.12% on Monday, while the Nasdaq finished the day at a neutral level, rising symbolically by 0.01%.
A key factor diverting investors' attention on Wall Street from geopolitics is the earnings season, which will reach its climax in the coming days. This week we will already see reports from over 40% of S&P 500 companies.
On Wednesday, Microsoft, Meta, and Alphabet will report
Wednesday will undoubtedly be the most important day, when Microsoft, Meta, and Alphabet will publish their first-quarter results after the session. The ongoing blockade of the Strait of Hormuz forces additional financial institutions to revise forecasts for oil prices.
On Monday, analysts at Goldman Sachs again decided to take this step, pointing to an extreme rate of decline in global crude inventories. According to the bank, the average oil price in Q4 will be $90 per barrel (the previous forecast was $10 lower).
The continued decline in global inventories at a record pace of 11–12 million barrels per day mitigates the supply shock, but this pace cannot be maintained in the long term. At the time of writing, sentiment on Asian exchanges remains mixed. The Hang Seng is down about 1%, and Japan's Nikkei 1.2%. Among the gaining indices are KOSPI (+0.8%) and India's Sensex, which rose symbolically by about 0.1%.
Did the White House reject Iran's proposal?
European index futures suggest a slight opening above zero. Without positive developments from the geopolitical front, it is difficult today to expect a clear breakthrough on Old Continent exchanges. According to recent media reports, the White House rejected Iran's proposal to unlock the Strait of Hormuz and shift negotiations on the nuclear program to a later phase.
