The Big Picture:
The DAX gained 0.94% on Tuesday, better than expected economic data in Europe supporting the up move. Pfizer paid 14 Billion USD for Medivation, the cancer specialist. Medivation is the producer of the blockbuster drug Xtandi, which fights prostate cancer. At least 5 other pharmaceutical companies were interested in taking over Medivation, amongst these 5 was also Sanofi, who bid 9.3 Billion USD in April. Another acquisition target is Biogen. The biotechnology sector, is the sector which has shown the highest gains since the crash of 2008. A reason for this being many products gaining market readiness and being successfully sold. Another reason being, the many takeovers in this sector. Amongst the more established pharmaceutical companies, patent rights for blockbuster drugs are running out. It is cheaper for these large corporations to acquire biotech companies, than to invest in new research on new products. We see this trend continuing in the next years, making the biotech sector remain of high interest.
Pre-Market direction of US Futures (07.00 CET)
The S&P is trading up 0.05%%
The DAX is in an upward trend. Next resistance is seen at 10860, the support at 10500 has been successfully tested.
Euro / USD
The Euro is trading sideways in a large trend. Support is at 1,0822, resistance at 1,1429. Short term we see weakness in the Euro.
JPY / USD
The USD is in the process of forming a bottom. Biggest support, on a closing basis, will be found at 100.31, which has been successfully defended.
Mid term, Gold is trending upwards, short term we are seeing a sideways move. The next major resistance is at 1375, support at 1300.
Oil is trending upwards, running into key resistance. We expect short term weakness.
The S&P 500 traded up 0.2% on Tuesday. The highs of the day were not held. Best performing stock in the S&P 500 was Best Buy, gaining 19.6% after giving excellent numbers. US New Home Sales rose 12.4% against the previous month, rising to 654 000 against 580 000. These good numbers lead to more speculation, that the Fed could increase rates later this year. Gains in Japan were countered by losses in Hong Kong. Markets are awaiting Friday´s Yellen speech. The USD is trading up ahead of this speech. Gold loses -0.09% and WTI Oill loses -1.27%.
Today´s numbers (CET)
16:00 USA: Existing Home Sales
Company news :
USA: Quarterly Earnings: No important data expected.
RoboForex Analytical Department
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