22.04.2016 - Corporate reports of a number of companies disappointed investors

US stock indexes showed a drop yesterday amid weak reporting of a number of corporations. In addition, investor sentiment was negatively affected by the drop in oil prices, as well as negative data on the manufacturing PMI in Philadelphia, which in April was -1.6, against the expected 8.1 and 12.4 in March. On the other hand, support for the bulls was the news on the number of initial unemployment claims in the US, which fell to 247 thousand against the expected growth up to 265 thousand. It should be noted that the deterioration in earnings of some US corporations can become a trigger for the start of the correction of stock indices in the country after strong growth from the middle of February. Today will be published data on the manufacturing PMI in the US by Markit (13:45 GMT). Our forecast for the coming months remains negative.

Major European stock indexes are declining after a fall on US markets yesterday. Investors fear the negative impact of decline in corporate profits in the first quarter. Among the reasons for the negative sentiment we should also highlight fears of another scandal with Daimler AG concerning exhaust tests. Negative impact on trading also had weak data on manufacturing and service PMI in the Eurozone, which totaled 51.5 and 53.2 respectively, against expected 51.8 and 53.3. It is worth recalling that the ECB yesterday has left monetary policy settings unchanged and expanding incentives is possible only in case of deterioration in the financial system and reduction of inflation. Our medium-term outlook for European markets is positive, but we do not rule out correction in the coming weeks.

Stock indices of the Asia-Pacific region today showed mixed dynamics. Thus, the Japanese market continues to show growth on expectations of additional stimulus from the Bank of Japan, the decision on which may be adopted next week. On the Australian market negatively affected the correction on commodity markets. Chinese investors are trying to assess the prospects of further movement of local indexes. So, on the one hand the improvement of the macroeconomic indicators will have a positive effect on the stock markets, but on the other hand, the Chinese authorities can stop the expansion of stimulus measures. Our medium-term outlook remains positive and the greatest potential for growth has the Japanese market.

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