US indexes continued down yesterday, losing nearly 3% on the Nasdaq, 2 on the S&P and drawing the rest of the world southward. Volumes continue high as panic takes hold, especially with Trump threatening to fire FED-head Powell. Still, consumer sentiment was up to 98.3 in December, personal consumption up year on year and Q3 GDP was up a tenth, but down the same when annualized. While treasury head Mnuchin tries to calm markets amidst this end-of-year government shutdown, clearly that 4th rate hike was a turning point. Last week, Credit Suisse analysts said they expect at least $63bn of pension funds to be moved out of equities and into bonds. Meanwhile, in Canada, GDP and retail sales were both up a 1/3% in October based on Friday’s release.
With China’s economic conference over, we’re expecting to see tax cuts boosting domestic consumption, on one hand, but cyber tensions with the US have added another spark to the trade wars contention. China says it is considering changing existing laws to battle forced technology transfers and that hinder joint ventures with foreign companies. Indexes closed in the green this morning but less than a percent – 0.43 in Shanghai, 0.75 in Shenzhen, while both the Hang Seng and Nikkei were down – the latter on a panic-stricken yen. And Bloomberg has good news for India – it’s stock market has overtaken Germany’s to become the 7th largest in the world
Data throughout Europe has been mixed, with Italy’s trade balance growing by a 1/3 of a billion euros and public sector borrowing in the UK up to 6.3bn pounds. Total business investments fell by less than expected, and housing starts are improving. Business confidence is down throughout the continent and Friday saw consumer confidence for the union at minus 6.2; but stocks closed on Friday marginally up.
Surprisingly, little of the panic investors are experiencing has resulted in a mass rush towards cryptos. The 4000 range continues to serve as bitcoin’s resistance area, and at least on THAT point traders are showing responsibility. Oil has been consolidating for the past 2 days as traders await OPEC’s announcement on production cuts. The proposed number is 1.2 mn daily barrels; and while a huge 10-rig cut in active platforms was reported on Friday, global growth concerns continues to pressure prices downwards. Gold has left behind its latest 12-45 support level and is now playing around in the 12-60 range. Now that the dollar seems to have bounced back from resistance at 96-60, traders are getting more and more optimistic regarding the yellow haven.
Very little data up ahead. It’s the emperor’s birthday in Japan, Christmas nearly everywhere else – especially if you’re an avowed short trader. On Boxing day, we’ll be seeing the US’s Redbook index, the Case Shiller house price index and this week’s API crude oil report.