Our Market analysis: 27/04/2018

This week was fairly stable for the equity markets, with a stable S & P500 and a Nasdaq100, which fell slightly by 0.2% over the period, while in Europe the Stoxx600NR recorded an increase of 0.93%, and a CAC40 rising by 1.3%, driven by good corporate results and the rise of the dollar to 1.21. The week was punctuated mainly by the corporate results of the first quarter, with in particular the good performance of Facebook and Amazon that allowed the US indices to resist despite a breakthrough of long rates to over 3% during the week.

CAC40 back on 10 years high (ETF Lyxor CAC) : weekly data

The oil sector has also been buoyant on both sides of the Atlantic due to higher crude prices, which improves the outlook for the oil industry (oil services sector and majors). In addition, this week has also been positive on the geopolitical front, because of the rapprochement of the two Koreas, and a possible negotiation of the US with Iran on an extension of the nuclear agreement, after the probable questioning of this one on May 12th. However, in case of failed negotiations, new tensions can be expected in the Middle East with the key to a new appreciation of the geopolitical premium and the price of a barrel.

Markets should continue in the short term to evolve according to corporate results and the behavior of long-term rates. It seems, however, that the bearish catalysts are starting to be a little exhausted in the short term and that the good behavior of the European and Asian markets is a positive factor, but the results of Apple on May 1st will be important.

Volatility resume decline (ETN iPath VXX) : weekly data