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- Varchev Finance: Trading day in one post – 04.12.2017
Varchev Finance: Trading day in one post - 04.12.2017
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Loading...Asian stock market: Asia markets traded mixed late Monday morning, while U.S. futures rose, as investors digested news that the U.S. Senate narrowly passed an important tax bill in the early hours of Saturday. In Australia, the ASX 200 traded flat as the heavily-weighted financial subindex fell 0.68 percent. The country's so-called Big Four banks saw losses in the morning session. Shares of ANZ were down 0.84 percent, Commonwealth Bank declined 0.51 percent, Westpac fell by 1.3 percent and the National Australia Bank was lower by 0.47 percent. Japan's Nikkei 225 declined 0.2 percent while the Topix index traded down fractionally lower. Across the Korean Strait, the Kospi stood out and traded up 0.47 percent. Chinese mainland markets reversed early losses to trade up. The Shanghai composite retraced losses of near 0.3 percent to trade up 0.12 percent. The Shenzhen composite traded near flat. In Hong Kong, the Hang Seng index also reversed early losses of near 0.3 percent to climb 0.77 percent.
Currency market: The dollar rose against all major peers in early trading on Monday in Asia, with the Bloomberg Dollar Spot Index up 0.3%. The euro lost 0.2% to $1.1873. The yen slid 0.5% to 112.75 per dollar. The AUD fell 0.1% to 76.04 U.S. cents. Politics in Washington continued to grip the attention of traders in financial markets, with the dollar rallying as investors assess the implications of developments for U.S. tax reform and the investigation into connections between Donald Trump’s campaign and Russian meddling in the U.S. election. The greenback recovered some of Friday’s losses as investors unwound trades triggered by what turned out to be an erroneous ABC News report about Trump and former national security adviser Michael Flynn. The Senate has put Trump one step closer to passing tax reform by year-end. Australian bonds fell. Global equities are heading into year-end near all-time highs as investors focus on earnings and economic growth. Washington’s influence blew a chill through Wall Street Friday on news that Flynn has pleaded guilty to lying to the FBI and that he had agreed to cooperate with prosecutors. While the S&P 500 Index dropped as much as 1.6 percent, it ended the day down just 0.2 percent. Trump called on investors to sue ABC News after the false report.
Commodity market: WTI crude slid 0.7% to $57.94 a barrel. Gold fell 0.5% to $1,274.48 an ounce. Good news about the US tax reform is weighing on the price of the precious metal, with the expectation that if positivism persists in the US markets, gold will continue its downward movement. On the other hand, rumors have leaked that North Korea is preparing for "the largest rocket test". If this turns out to be true and there is a new missile launch, the negative movement will quickly be erased, as investors will turn their assets into gold as a means of protection against risk.
European stock market: European stock indices are expected to start the first trading session on the week in a highly positive territory. The German DAX will open a gain of 93 points to 12,944; The French CAC has a 32-point increase of about 5,371, while the UKX is at 7.354 - a jump of 23 points. In Britain, Prime Minister Theresa May reached an agreement with the EU on Brexit. It has become clear that the amount the UK has to pay for leaving the bloc remains within the range of 45 billion to 55 billion euros. So far, exit costs have been a major stumbling block before Brexit Deal and an agreement will pave the way for the next stage of the negotiations. The two remaining key pillars, on which a solution needs to be reached before the next negotiations are launched, are the border with Ireland and civil rights after the separation. The pound remains highly sensitive to this issue, with expectations that there will be news about the progress of the deal during the week. Every one in a positive light would have a strong appreciation of the local currency, while a failure of the negotiations at any point would send the sterling to new bottoms. According to Theresa May, the border with Ireland is a key point without which no progress can be made.
U.S. stock market: Friday's market selloff does little to change the fact that more record highs are still ahead for the Dow, said top market technician Ralph Acampora, who sees the Dow rallying close to 25,000 by the end of the year. Late last week, stocks came under pressure, with all three major indices plunging after former national security advisor Michael Flynn plead guilty to lying in the FBI's Russia investigation. The Dow fell as much as 350 points at the lows of the session, but pared most of those losses into the close. The bounce back from the lows is a key indicator in the resilience of the market, Acampora told CNBC last week. It's why even Friday's brief selloff still has him sticking to his bullish position on stocks, and the Dow in particular: Year-to-date, all three major market indices remain up by double digits. According to Acampora, the blue chip stock index could come close to hitting 25,000 by the end of 2017. The director of Altaira Research Partners' technical analysis has his official sights set on 24,986 on the Dow by year-end — thanks to a few key indicators.
"The momentum is there, and if you look at the chart of the Dow and the Dow Jones Transportation Average, you'll see both of them are at all-time highs, and since October that has not been the case," he told CNBC's "Futures Now" last week. Acampora referred to a confirmation of the Dow Theory, which posits that a divergence between the Dow index and the Dow Transportation index points to a pullback waiting to happen. However, the Transports index rallied 5 percent last week, essentially lessening the divergence between itself and the Dow, which had been hitting all-time highs while the transports lagged. "If the oldest theory in technical analysis is to be believed, then you have a reconfirmation of the primary bull market, and that's very impressive," added Acampora. The rally in transports also comes on a rotation that Acampora sees happening in the market. While tech stocks sold off last week, transports and financials were among the sectors that rallied, which Acampora sees as a positive for the market.
Economic calendar for the European and U.S. trading session:
11:30 UK - Construction PMI
Tentative Europe - Eurogroup Meetings
12:00 Europe - PPI
17:00 USA - Factory Orders
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