Friday, 24 November 2017

Asian markets mixed as China steadies after Thursday plunge

Asian markets were mixed on Friday.

The Nikkei 225 reversed early losses to close up 0.12 percent while the Shanghai Composite rose 0.06 percent.

On Thursday, the Shanghai Composite had plunged 2.3 percent while the Shenzhen Composite fell 2.9 percent after the Chinese government took steps to stop the proliferation of small online lenders following an earlier announcement that it planned to streamline oversight of asset-management products sold by financial instutitions.

Thursday, 23 November 2017

Markets mixed, Fed seen dovish

Markets were mixed on Wednesday.

The S&P 500 fell less than 0.1 percent while the STOXX Europe 600 fell 0.3 percent but the Nikkei 225 rose 0.5 percent.

Market mood was kept subdued as the Federal Reserve released minutes on Wednesday of its last monetary policy meeting, which showed that the Fed viewed a “near-term” increase in interest rates as possible but that officials were concerned about persistently low inflation.

“Overall, we read the November minutes as dovish,” said a team of BNP Paribas economists led by Paul Mortimer-Lee.

Wednesday, 22 November 2017

Markets rise, US stocks hit record highs

Markets rose on Tuesday.

The S&P 500 rose 0.7 percent to a record high, the STOXX Europe 600 rose 0.4 percent and the Nikkei 225 rose 0.7 percent.

With the stock market rally resuming, Goldman Sachs sees another strong year in 2018 if the US Congress passes tax reform.

Peter Costa, president of Empire Executions, told CNBC that while stocks are overpriced, “I don't think there's anything within the next couple of months that we're going to see that's going to slow [the market] down”.

However, Vanguard chief economist Joe Davis wrote that the “sky is not falling, but our market outlook has dimmed”. Vanguard expects returns in the medium term of 4 to 6 percent, the most cautious outlook it has had on future stock returns at any time during the post-financial crisis economic recovery.

Tuesday, 21 November 2017

Markets mixed entering favourable season in “dangerous” environment

Markets were mixed on Monday.

The S&P 500 rose 0. percent and the STOXX Europe 600 rose 0.7 percent but the Nikkei 225 fell 0.6 percent.

“Earnings growth, especially revenue growth, continues to support U.S. equities,” said Diane Jaffee, senior portfolio manager at TCW.

Similarly, Robert Doll, chief equity strategist at Nuveen Asset Management LLC, said in his weekly outlook that “the two most important drivers of equity markets — corporate earnings and real growth levels — still support a risk-on investment stance”.

European stocks rose despite the collapse of talks to form a coalition government in Germany, with the DAX 30 closing with a 0.5 percent gain after being down 0.5 percent earlier in the session.

Indeed, Michael Santoli at CNBC wrote that “bears may have missed their last chance to feast on 2017's stock market”.

“Beginning this week, seasonal tendencies start turning in favor of stocks,” he said. “As long as the published projections of 11 percent further profit gains hold up for the first half next year and don't start seeming to need the help of a big, immediate tax-cut effect, it's tough to see the market failing in a dramatic way.”

However, strategists at investment bank Societe Generale think that investors are too optimistic.

Alain Bokobza, head of global asset allocation at Societe Generale, said that “investors continue to push asset prices, volatility and leverage to historical extremes” but that “a low volatility carry environment with rather extreme positioning is a dangerous combination, which we recently likened to dancing on the rim of a volcano”.

Bokobza expects “to enter a bear equity market environment” and for the S&P 500 to fall 22.5 percent from its Monday levels to 2,000 by the end of 2019.

Monday, 20 November 2017

S&P 500 seen rising this week, could finish year strong

The S&P 500 fell 0.1 percent last week, its second consecutive weekly decline.

This week could see a better performance though, according to Patti Domm at CNBC.

“Stocks have a good chance of trading higher in the week ahead, if the typical Thanksgiving holiday week trading patterns take over,” she wrote.

Citing data from Bespoke, she said that the S&P 500 has averaged a gain of 0.6 percent during Thanksgiving week and has been higher 75 percent of the time since 1945.

She also quoted Paul Hickey, co-founder of Bespoke, as saying: “The historical trend is a strong stock market through the year, tends to finish strong.”

Saturday, 18 November 2017

Stocks fall but oil jumps, US housing starts surge

Markets were mixed on Friday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 0.3 percent but the Nikkei 225 rose 0.2 percent.

However, oil rose. West Texas Intermediate crude surged 2.6 percent and Brent jumped 2.2 percent.

Also providing positive news for investors on Friday was a report showing that US housing starts surged 13.7 percent in October. Housing starts is a leading indicator of the economy.

Still, Michael Gapen of Barclays said that “we would not expect this type of momentum to persist”.

Meanwhile, European Central Bank President Mario Draghi said in a speech in Frankfurt that the “euro area is in the midst of a solid economic expansion” but with inflation subdued, “we still need a patient and persistent approach to our monetary policy”.