Initial Boost flattened by the ‘Cautious Optimism’ | Calamatta Cuschieri

Global markets were in the green on Tuesday as optimism bolstered in the world’s largest economies. European equities are in a bull market as the pace of German inflation doubled last month. However, the initial momentum halted with some steep declines in the final hours before the closing bell. The DAX finished 0.12% below the flat line at 11,584.24 compared to the Daily high of 11,637.37 earlier in the session, led by real estate Vonovia SE and consumer business Henkel. In the UK, the FTSE 100 closed in positive territory, reaching a record high at one point with Investment Services Hargreaves and Barclays Banks leading the index.

On Wall Street, US markets leapt at the start of trading, strengthening against a backdrop of rising oil and a stronger US Dollar. The market is trying to keep an upbeat sentiment before Donald Trump assumes office later in the month as next president, where markets are repositioning towards the expected rise in inflation, manufacturing, and an overhaul of regulations and infrastructure.

US Shares jumped to solid gains as the DOW Jones, led by Nike, Caterpillar and Disney, resumed its march towards the 20,000 mark. The NASDAQ also traded positively with Seagate topping the performance charts, followed by the biotech company Shire Plc. The S&P 500 was also in the green with the petroleum refining company Marathon Petroleum advancing the most. However, US markets pared most of the early gains during the session.

Currency side

The Surge in the US Dollar brought fresh downward pressure on the British Pound. This helped internationally oriented companies listed on the London Stock exchange. In fact, the Blue-chip FTSE 100 index strengthened reaching a new intraday record. The pound lost around 0.28% against the U.S. counterpart. Meanwhile, the Euro also dipped against the U.S. Dollar, at one point reaching the lowest level in 14 years. The greenback was also trading around 0.47% stronger compared to the yen. However, despite all the optimism, the U.S Dollar did give up some gains later on against some major counterparts.

Automotive area

Ford Motor Corp cancelled the investment of around $1.6 billion US dollars in a Mexican Factory. Instead, the company will be investing $700 million in a Michigan Factory as it expands its electric sports utility vehicle (SUV) and a range of hybrid offerings. The company, which is the second-largest US automaker, had come under harsh criticism from President-elect Donald Trump for its Mexican Investment plans.

Europe’s largest automaker, Volkswagen (VW) was under the lens again, with the German consumer rights myRight filing the first legal case against the company, raising the pressure on the carmaker to compensate customers in Europe over the emissions scandal. VW had already pledged billions to compensate US Volkswagen diesel-powered car owners. VW has so far rejected any compensation for the Europeans, stating that the software fitted into the engine does not violate European law.

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt .The information, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.