Yesterday the world stock indexes fell for a second day in a row | IFCM Hong Kong
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Yesterday the world stock indexes fell for a second day in a row - 16.5.2014

Yesterday the world stock indexes fell for a second day in a row. American Dow and S&P 500 daily decline turned out the maximum of the month. Note that the futures trading e-mini round turn on the S&P 500 was 47% above the annual level. Probably, some investors do not expect any further growth and close the long positions.

We believe that yesterday's drop in prices contributed to negative macroeconomic positions and the weak financial results of the Wal-Mart (WMT) world's largest U.S. retail network.

WMT, Weekly

The U.S. inflation level in April rose more than expected and amounted to 0.3%. This is the maximum increase for 10 months. At the same time, there was the 6-years maximum decline in industrial production by 0.6% that is worse than expected. The Wal-Mart Sales growth in the first quarter was the lowest for last 5 years and showed 0.8%. Its revenues were 5% down. Among the negative factors, there was the health insurance price increase for the staff totaling more than 2 million people. Approximately 20% of customers paid the food stamps from the U.S. government instead of money purchasing groceries. All this contributed to a drop in shares of Wal-Mart on Thursday by 2.5%. The growth leaders are Cisco Systems (CSCO) (+6%) shares. The company reported an increase in gross margins to 62.7% in the last fiscal quarter from 53.3%. The significant financial performance improvement was due to the competition between Cisco Nexus 9000 and so-called SDN-networks. Some investors decided that Cisco will be able to take a leading position in the "cloud" software technology and operating large data sets. Today, we will see the data on the real estate market for April coming out in the U.S. at 12-30 CET. We expect the consumer confidence index from the University of Michigan for May to come out at 13-55 CET. Both forecasts are positive. Nevertheless, the U.S. futures indexes are in the red zone now.

The

stock indexes fell in Europe yesterday, as the EZ GDP growth in the first quarter was lower than the preliminary forecasts and made 0.2%. French SAS40 may demonstrate the weekly decline this month for the first time. It looks worse than the German DAX and the British FTSE100 due to the weak data concerning the French economy. Today at 9:00 CET, we will see the Eurozone trade balance released for March. The forecast is moderately positive.

The Japanese Nikkei closed in the red zone due to strengthening of the Yen (USDJPY), maximum for the month. Today, there were the ghrowth attempts due to good industrial production data in Japan for March.

China announced the auction on selling 300 tons of the (Soyb) from the state reserves on May 20. On May 22, there will be the auction on selling 1 million tons of Chinese corn (Corn). The news from the China National Information Center about the grain and sunflower oil (CNGOIC) made the agricultural futures quotations reduce. The downfall in prices for the Corn and the Wheat this week may be the largest for 10 months.

Cotton, Weekly

The (Cotton) comes cheaper for the second consecutive week. China being the leader in the world of consumption, reduced the cotton imports in April by 47.9% compared to April last year, to 224.4 thousand tons. This was reported by the China Cotton Association. In January - April this year, the fall in cotton imports in China was 45.2%, down to 985 thousand tons. This is due to the fiber excess and its sales out of the government stocks. According to the USDA, China owns 60% of the world cotton stocks, in other words, 10 million tons. There have been 306 thousand tons sold in April.

Coffee, Daily

The (Coffee) prices rose after lowering of the official forecast for its crop in Brazil by the Conab agency to 44.57 million bags this season. This is 9% lower than the January estimate. An additional factor was the coffee harvest forecast reduction from the International Coffee Organization in Indonesia for the season 2013/2014 to 11.67 million bags from 13.04 million in the season 2012/2013.

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