25.04.2016 - Probability of correction on the markets has increased
US stock indexes on Friday showed multidirectional dynamics. Negative for the market was the news on reduction of the United States manufacturing PMI from Markit, which fell to 50.8 in April against the forecast of 51.9. At the same time, investors were disappointed with the Alphabet and Microsoft earnings reports. Today, the dynamics of trading will affect the news on new home sales in the US (14:00 GMT). The central event of the week will be the publication of the Fed’s statement on monetary policy on Wednesday. In case of hawkish rhetoric of the US central bank, the fall in the markets may accelerate. According to our forecasts, the probability of further decline on the US stock markets over the next few weeks has increased significantly.
European stocks are down today against the background of falling oil prices, and the weak statistics from Germany, where the index of business sentiment in Germany fell to 106.6 in April, against the forecast of growth to 107.1. Today, it is worth paying attention to statistics on the balance of production orders in the UK (10:00 GMT). The strong influence of the British market will provide preliminary data on the growth of the country's GDP, which will be published on Wednesday. The volatility this week will be increased and we do not rule out the continuation of the correction on the markets in the coming weeks, in spite of the medium-term positive outlook.
Markets in the Asia-Pacific region fell today in connection with the correction on commodity markets and the negative impact of weak corporate reporting number of American companies. Investors did not rush to build up positions before the meeting of the central banks of Japan and the United States this week, after which we expect to see growth of volatility on the markets. Support for the Japanese market, according to our forecast will be the devaluation of the yen. The Australian market is closed today due to the holiday. We expect the growth of stock indexes in the region, but in the coming weeks could see a significant correction.