Yesterday was a holiday in the US, as I expected, the stock market seldom drops during Thanksgiving. This year however, because Thanksgiving occurred after a strong rally, the FTSE is struggling to move higher. The result is a sideways move. In the absence of US news the FTSE was driven by European news. German unemployment change and the Gfk German consumer climate survey were both better than expected.
The oil price continues to fall and Japan's consumer inflation slowed for a third straight month in October due to falling oil prices. Falling oil prices are a reminder that the global economy is not on the mend, once investors realise the disconnect between the stock market and the economy the stock market will sell off.
The stock market is forward looking so when prices rise on bad news, investors expect good news. If the good news does not materialise investors will be disappointed and the stock market will go down. Alternatively the good news is already in the price and there is nothing left to push the market higher. This is where we are now, investors expect China and the ECB to introduce new stimulus measures to boost their economies. I believe that the good news is already priced in and this is why upside is limited.
The headline index is tipped to open mildly softer this morning, according to financial websites, as the nation heads to the high street to hunt out Black Friday deals and with a general lack of overnight cues as Wall St closed its doors to celebrate Thanksgiving and Asian markets opened mixed...
US & ASIA
The US markets were closed overnight due to thanksgiving festivities and therefore remained unchanged, with the Dow standing at 17,828 points, the Nasdaq at 4,787 points and the S&P 500 at 2,073 points.
In Asia today, the Nikkei was recently up 205 points at 17,453 and the Hang Seng drifted slightly, falling 11 points to 23,991.
WTI crude oil traded at $68.65 a barrel and Brent at $72.19.
Gold settled at $1,183.2 an ounce.
In a somewhat quieter corporate diary today, interim results are due from Arrow Global Group, Helical Bar, Pennon Group, Real Estate Credit Investments and Tcs Group.
The FTSE is now going sideways and still below the high of 6773. Today is Thanksgiving in the US, with no trading in the US the FTSE will be quiet today, the sideways price action should continue. Positive sentiment is the key driver at the moment but the good news is in the price and a decline could start at any time.
Yesterday's economic reports were on the soft side. Core durable goods orders, initial jobless claims, personal spending , Chicago PMI, Michigan consumer sentiment, New home sales and pending home sales were all worse than expected. Because it's a holiday in the US, people will catch up with the bad news when they return to work. This means we could see a sell off tomorrow or Monday.
The headline index is tipped to open cautiously higher this morning, according to financial websites, with recent hawkish comments from Mark Carney and today’s OPEC meeting likely to stifle any major advance, as Wall St surged ever higher overnight on a glut of economic data, while Asia opened firmly down…
US & ASIA
In the US last night, the Dow added 13 points to 17,828, while the Nasdaq gained 29 points to 4,787 and the S&P 500 edged up 6 points to 2,073.
In Asia today, the Nikkei was recently down 87 points at 17,273 and the Hang Seng had fallen 92 points at 24,021.
WTI crude oil traded at $72.74 a barrel and Brent at $76.5.
Gold settled at $1,191 an ounce.
In the corporate diary today, interim results are due from Acal, Public Power, Digital Barriers, Mountview Estates, PayPoint, Palace Capital, RPC Group and VP and final results are expected from Impax Asset Management, Marston's, Shaftesbury and SSP Group.
The FTSE failed to make a new high (above last week high), this happened despite renewed hopes that China will take further accommodative monetary policy action. It seems that the early enthusiasm is gone, that's not surprising because the announcement of a market moving event at the end of an Elliott wave has a temporary effect on prices. When the market is ready to go down, good news or not, it will go down.
This week is Thanksgiving in the US. The market does not tend to fall during that period, so the period from tomorrow to the end of the week is positive for stocks. On the daily chart the FTSE is in a resistance area above the 200-day moving average, inside the long term ending diagonal and at the 78% retracement level.
The headline index is tipped to open a smidge higher this morning, according to financial websites, with a raft of companies scheduled to report their latest numbers, while Wall St continued to make steady gains overnight and as Asian markets opened mixed...
US & ASIA
In the US last night, the Dow was up 8 points at 17,818, the Nasdaq added 42 points to 4,755 and the S&P 500 edged ahead 6 points to 2,069.
In Asia today, the Nikkei was recently up 61 points at 17,414 and the Hang Seng had fallen 46 points to 23,838.
WTI crude oil traded at $75.83 a barrel and Brent at $79.63.
Gold settled at $1,198 an ounce.
In the corporate diary today, interim results are due from Accumuli, AO World, Byotrol, Caledonia Investments, Chamberlin, Creston, De La Rue, Essar Energy, KCOM Group, Quintain Estates & Development, Renold, Scapa Group, Severfield-Rowen, Signet Jewelers and Severn Trent.