19.10.2016 - Strong corporate reports supported the American market

American stock indexes showed gains yesterday on positive quarterly reports of several large companies including IBM, Goldman Sachs and Johnson & Johnson. On investor sentiment also affected the news on consumer price indices in the United States, whose growth was 0.3% in September, in line with expectations. Today, it is worth paying attention to statistics on new home sales in the US (12:30 GMT), as well as statistics on US oil inventories (14:30 GMT), which will affect the dynamics of the energy companies. The probability of the Fed raising interest rates in December, remains high, which is negative for the US market, but the corporate reporting season can maintain optimism on the markets. Our medium-term outlook remains negative and the current growth potential is limited.

Major stock indexes in Europe fell slightly today against the backdrop of controversial statistics from China, where industrial production growth has slowed. Support for the UK market was the publication of a report on the labor market in the country, according to which the unemployment rate has remained at around 4.9%, while the number of unemployed rose by only 0.7 per thousand, compared with forecasted growth of 3.4 thousand. Investors behave with restraint before tomorrow's ECB decision on monetary policy. The rhetoric of the ECB chief Mario Draghi during a press conference can greatly affect the mood of investors. Our medium-term outlook remains negative.

Markets in the Asia-Pacific region today, did not show uniform dynamics. The focus of investors was on statistics from China. Thus, GDP growth was 6.7% in the 3rd quarter compared to the same period last year, in line with expectations and the previous indicator. Industrial production growth in September slowed to 6.1%, which is 0.3% less than the forecast and 0.2% less than in the previous month. Concerns about slowing growth in production in China and the overheated housing market continues to put pressure on local indices. Tomorrow we should pay attention to the statistics on the labor market in Australia. According to our forecasts, the fall on the stock markets in the region is the more likely scenario in the near future and medium term.

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