Troubling signs for risk ahead of European trading

Asian session slides remained on focus, with major stock indices down in the region. These moods are also transmitted in Europe where the indexes will start in red.

Indicative opening prices of European stock indices:
UKX: 7,037, -52 points
DAX: 11,388, -89 points
CAC: 5,018, -43 points

S&P 500 futures are now nearly 0.6% down on the day, while Asian assets quickly return all their profits from the beginning of the session. Nikkei stands out for losses (-2.2% for the day), with the main reason for this being reported to be profit taking by traders, but financial stocks are also losing too much. This means that in the first hours of trading in Europe, financial names will suffer, at least to the increase in liquidity after the lunch break in City of London, when US traders will wake up and intervene in the trade.

The sentiment slump boosts the yen's profit before the start of trading in Europe, and I expect this trend to remain today, as traders seem to have forgotten the ceasefire between Xin Jinping and Trump.

The question is, are things going out of hand and expecting a high volatility to end the year? In any case, the Santa Claus rally remains more than uncertain for the moment, despite the temporary lull of the trading front. This would be a different story if both sides have some form of unilateral understanding / agreement, but it seems that China is actually not promising anything, and it is enough that market participants still have doubts about it.

From this up, let us not forget about the brutal unrest in France. Hundreds of restaurants and shops on the central streets of Paris have been completely destroyed, and retailers have commented last night for a fall in sales of more than 50%, which will also affect the French CAC index.

I expect negative stock trading today, as safe haven assets like gold and Japanese yen will be in vogue. Also, cash flow allocations to inverse ETFs and Volatility ETFs are also outlined.

Read more:

• US – Iran – Iraq tension remain the main driver of the stock market today
• How top market players on Wall St think 2020 will look like on financial markets
• Money Flow before the start of the new trading week
• Cincinnati Financial Corporation (CINF.US) -Opportunity for long positions
• Asia stocks gain as Fed signals no rate cuts in 2020