18.08.2014 - Markets cannot choose the medium-term direction
The American market ended trading session on Friday near the previous close. Investors in general have a positive attitude, but are not in a hurry to accumulate long positions in connection with an overbought market, mixed macro data and geopolitical tensions. On Friday was published the data on the growth of industry in the USA by 0.4%, which is 0.1% better than expected, as well as reduction of consumer confidence index in the country to 79.2, versus the expected 82.7. Today, the dynamics of trading may be affected by the index of business activity in the housing market in the United States (14:00 GMT). In the coming days, the growth of the American market may continue, but our medium-term outlook remains negative.
Most European stock markets fell on Friday amid fears of investors about the situation in Ukraine, the territory of which, according to the statement of NATO, entered a column of military vehicles from Russia, part of which was destroyed by the Ukrainian army. Weak data on GDP growth in the euro area continues to have a negative impact on the dynamics of trading. Today we can see upward movement due to lower geopolitical risk. The course of trading will also be affected by the news on the trade balance of the Eurozone (09:00 GMT). Despite the possible growth of the markets in the near future, we keep medium-term negative outlook for European indexes.
Markets in the Asia-Pacific region closed with minor change. Despite positive corporate news from Japan, local indexes closed near previous levels against the strengthening of the yen. Chinese investors took negatively the news about reducing the amount of foreign direct investment in July by 0.4%, compared with growth by 2.2% in June. The Australian market is expected to publish minutes of the previous meeting of the Reserve Bank of Australia. We maintain a medium-term negative outlook for the markets in the region.