Good morning and happy Friday.
To the scoreboard:
Dow: 23,526.18 (unchanged – markets closed)
S&P 500: 2,597.08 (unchanged – markets closed)
AUD/USD: 0.7627 +0.0006 (+0.08%)
ASX200 SPI futures (December contracts): 5,984 (-8)
1. Chinese stocks get hosed: The selloff intensified into the close yesterday evening, as the Shanghai Composite index finished 2.29% lower — its worst day since June 2016. With Chinese bond yields rising, analysts attributed the losses to further crackdowns on excessive leverage and speculative stock trading.
2. Europe economy steady: With US markets closed, the jitters in China initially weighed on European stocks but the STOXX600 index rallied back to close flat. Composite manufacturing PMIs for the European economy came in at the highest level since 2011, which helped drive the Euro further above $US1.18.
3. Iron ore rockets higher again: Benchmark 62% fines posted their second straight gain of around 4% to close at the highest level in two months. Higher steel prices continue to provide support, as demand in China remains strong despite steel production cuts ordered by the government to protect the environment.
4. The day ahead: There’s New Zealand trade and Japanese PMIs, but no major data catalysts in Asian trade to end the week. ASX futures are drifting lower with no US lead and shakiness in Chinese stocks. The AUD is finding support above US76 cents, as narrower bond yield spreads are offset by demand for commodities amid a steady global growth backdrop.
5. Bitcoin Cash makes a dash: Bitcoin is holding steady above $US8,000, but offshoot Bitcoin Cash rose by more than 20% overnight on a surge in Korean trading volumes. Meanwhile, Bitcoin Gold — the third version of the currency — had a 20% rise of its own after trading flat since it went live earlier this month.
6. Black Friday: The retail sales frenzy — a post-thanksgiving tradition in the US — kicks off today, and while shoppers will be looking for cheap deals, Goldman Sachs has outlined a strategy for traders to find cheap stocks — profiting from the extra volatility whipped up by Black Friday sales.
Enjoy your weekend, I’m on Twitter @Mr_SamJacobs.