Wednesday, 29 November 2017

Markets rise, rally to “continue into year-end” but risk of correction also higher

Markets were mostly higher on Tuesday.

The S&P 500 rose 1.0 percent to close at another record high after the Senate Budget Committee voted in favour of a Republican tax bill.

Elsewhere, the STOXX Europe 600 rose 0.6 percent and the Shanghai Composite rose 0.3 percent but the Nikkei 225 was flat.

Markets shrugged off another North Korean missile launch.

“This is a strong market that continues to grind up, and I expect the market will continue to move higher throughout the end of the year,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services.

Patti Domm at CNBC said that the stock market rally “could well continue into the year-end and beyond” but also noted that Todd Sohn, technical analysts with Strategas Research, has warned that “years where there are very shallow sell-offs are usually followed by years with deeper sell-offs and more volatility”.

Indeed, Vanguard now says that there is a 70 percent chance of a US stock market correction, 30 percent higher than what has been typical over the past six decades.

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