21.11.2014 - Elections will be held in Japan in December
US stock indexes showed growth on the back of positive statistics on the secondary housing market, where the number of sales rose to 5.26 million in October, against the forecast of 5.16 billion. The consumer price index was flat in October, despite the expectation of decrease by 0.1%. The index of leading economic indicators rose by 0.9% last month, against the expected 0.6%. Investors are positive about the prospects for further growth of the US economy, despite the risks associated with weak data from Europe and Asia. Market growth is likely to continue in the near future, but its potential is limited and after Christmas, we can see a substantial correction. Our medium-term outlook remains negative.
European stocks yesterday showed mixed trends. Negative for the market was the news on reducing manufacturing and service PMI in the euro area by 0.2 and 1.0 to 50.4 and 51.3. Consumer confidence in the euro zone fell in November by 1 to -12. Growth in retail sales in the UK in October by 0.8% against the forecast of 0.4%, failed to improve investor sentiment. Today, the European indexes rose after Mario Draghi speech in which he declared his readiness to active actions in case of reduction of inflation in the euro area. We forecast the growth of indexes in the region today, but negatively assess medium-term growth prospects due to the weak performance in the industrial and service sectors.
Markets in the Asia-Pacific region today rose on positive sentiment of US investors. Japanese Prime Minister dissolved the lower house of parliament and announced elections in December. In case of support for policies of Mr. Abe, we look forward to increased economic stimulus that will be positively displayed on the stock indexes of the country. The Chinese stock market showed growth after weak performance of the previous days due to falling interest of linked trading on Shanghai and Hong Kong stock exchanges. The volatility will be low on Monday due to a holiday in Japan, and the lack of important macroeconomic statistics.