Good morning! Three sleeps!
– Just a week after the Santa rally looked extinguished, the Fed’s promise to keep rates on hold for the next two meetings really got things moving on stock markets and on the week in the US, the S&P 500 led the charge higher. It finished up 69 points or 3.43%, the Nasdaq rose 2.39% and the Dow lagged up just 1.19%. Europe was more mixed with the FTSE up 3.88% but the DAX down 0.77%, while Shanghai made a new high for this run, rising 5.81% to 3,109.
– But in contrast to the overall week’s fireworks, Friday’s stock markets were much less excitable. Not so crude oil traders, who kicked prices up $3.41 a barrel to $57.77 for an incredible gain of 6.27%. It looked like end-of-year position squaring in the oil markets after the big crash recently but it’s a big move nonetheless.
– It’s skeleton staff and juniors for the rest of the year now so liquidity will be thin, no one will want to institute fresh positions unless they have to, and the interest rate shenanigans which often accompany the lack of liquidity with all the holidays and year’s end may offer some good deals for sharp-eyed interest rate traders.
– So at the close on Friday, US stock markets sold into the last hour after what was a big triple witching day.
- Dow Jones up 0.15% to 17,805
- Nasdaq up 0.35% to 4,765
- S&P 500 up 0.47% to 2,071
– European markets were mixed but the rally in crude helped the FTSE late in the day given the large number of energy producers in the index. The rest of Europe ended in the red.
Anyway, at the close.
- London(FTSE 100) up 1.22% to 6,545
- Frankfurt (DAX) down 0.25% to 9,787
- Paris (CAC) down 0.18% to 4,242
- Milan (FTSEMIB) down 0.4% to 18,984
- Madrid (IBEX) down 0.26% to 10,364
– Locally the rally in the US in crude and iron ore on Friday helped the ASX futures trade higher finishing Saturday morning with the March SPI 200 contract up 17 points at 5327. It’s been a solid recovery.
– In Asia, Shanghai is going from bubble to bubblicious, closing Friday at 3,109 up 1.68%. That’s its highest close since 2010. Worth noting is that Shenzen stock exchange, China’s number 2, fell 1.26% which highlights the concentration of speculative activity which appears to be occurring in Shanghai. The market is the market but it’s worth keeping an eye on given the import that Shanghai shares hold in global markets these days. In Hong Kong, stocks rose 1.25% to 23,177 while in Tokyo a renewed Shinzo Abe and a weaker yen, approaching 120 again, helped the Nikkei close up 2.39% to 17,621.
– On currency markets, the US dollar was on the ascendancy again with the USDJPY up at 119.45, euro down at 1.2223 and GBP at 1.5618. The Aussie had a down day too, finishing near its lows for the year at 0.8139.
– Commodities had a huge day. Crude ripped higher as noted above, iron ore for March rose 1.43% to $69.18 while Newcastle coal has risen to $62.90 a tonne. Copper rose to 2.8975 a pound and gold continues to be becalmed at $1,194 an ounce. On the Ags, corn was unchanged, soybeans fell 3.7% and wheat dipped 3.4%.
The data calendar continues this week although it’s the second half of the month and much quieter. There is nothing out in Australia today, Japan has an economic survey, German trade prices are out tonight and then it’s existing home sales in the US.