European stock exchanges closed the last session of the week down, conditioned by the negative opening of the American stock market. But what drove US equity markets to a slow start? A news is shaking Wall Street and could bring down the European stock exchanges, heavily penalizing the stocks of the Piazza Affari.
A saying of the financial markets can heavily affect the stock exchanges
The news that arrived today from the US Stock Exchange can negatively affect the performance of the stock markets not only in the US but also in Europe. But, paradoxically, these news, if they can be negative for the stock exchanges, taken out of context from the stock market, become positive. Let’s try to explain ourselves better starting from a saying that is known to all financial operators.
On the stock market it is said that you buy on rumors and sell on news. We are in the period of quarterly financial statements for listed companies. It is a much awaited moment for all financial operators. It is assumed that if a quarterly is good, investors rush to buy the stock. In reality, this may not be the case. It was a super quarterly week for the major Wall Street listed companies. Yet the US stock market opened weakly, and by the time trading in Europe closed, the major indices were down by about half a point.
A news is shaking Wall Street and could bring down the European stock exchanges, heavily penalizing the stocks of the Milan Stock Exchange
In addition to the very positive quarterly financial statements of US companies, there are also exceptional macroeconomic data from the US economy. It is no coincidence that Wall Street is at an all-time high. So where is the problem? That the stock market has been discounting this positive situation for months.
The US stock market is adjusting to all-time highs, week after week. This is because traders wagered that the US economy and publicly traded companies would have good growth in the quarter. They were right, but what happens now? There are two scenarios. Either the market raises the bet and bets on a great second quarter, or decides that the bet is won and proceeds to cash.
In the first case, the US stock exchange will continue running for another three months. In the second case, prices will have a sharp correction, a drop that could be between 10% and 15%. In this hypothesis, the decline would inevitably involve the European stock exchanges, which could experience a similar or even greater decline.
And indeed the last session of the week did not end in glory. The Ftse Mib (INDEX:FTSEMIB) closed down 0.5% to 24,141 points, the German stock exchange closed even, Paris lost 0.5%. The only positive stock market in Europe was London, which gained 0.1%.
Deepening
This the multidays analysis and the analysis of international markets by the ProiezionidiBorsa Research Department.
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(We remind you to carefully read the warnings regarding this article, which can be consulted who”)
