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Oil stocks off by 2%
As oil goes, so goes the FTSE 100. The usual suspects are to be found at the bottom of the scoreboard this afternoon, including Petrofac, BP and Shell which are all off by at least 2%. Mining stocks have joined them in sympathy, reminding us that there is little hope for a FTSE rally towards the end of the year if this hefty section of the index fails to rally in coming days.
Yet again the dive in oil demonstrates the gap between consumers and investors – the former can rejoice in lower prices but the latter cannot look at a chart without factoring the implications for global economic demand and inflation.
Bonds continue to find buyers as yields plumb new depths, a sign that the Christmas spirit is still not yet in evidence. The week has been light on real data, but next week promises to be more interesting, even if the coming Fed meeting is bereft of a statement and thus useful economic commentary.
Profit-taking sends markets lower
The autumn rally in stocks has finally met its Waterloo, with the second week of December fulfilling its traditionally negative role. Oil, Greece and general profit-taking have conspired to send markets on a downward progress, but even so some think they can hear the jingling sleigh bells of a Santa Rally.
Handily for bulls, sentiment has been hit hard by the oil price fall, so the top of recent weeks has been devoid of the usual flag-waving from long-only investors, which means that markets are likely to be much keener to push indices higher after their drubbing this week. It will take a brave person to step in and buy on Monday, but such bravery can pay off.
Crude selloff continues
The daily afternoon crude selloff is underway again, as the year’s most surprising and dramatic trend breaks new ground. Each bounce brings forward the suggestion that a bottom has finally been found, but then new sellers appear to take the price lower once again. Demand bearishness has been added to the expectations of significant supply levels, with oil-supplying nations reduced to squabbling over a diminishing market.
Gold briefly tested the waters sub-$1215 today, as the selloff continues. The pattern of the past two weeks has seen a jump at the beginning of the week followed by a fading of bullish momentum, which raises the possibility of a push towards $1240 on Monday before weakness sets in anew.
Euro finds buyers
Despite a grim set of figures this morning from the eurozone, the single currency has found some buyers for the time being. The steady climb up from $1.23 that began on Monday is intact, even if, at this point, $1.25 is a step too far.
Greece has dropped off the radar once again, but it seems that the nation that began the eurozone crisis all those years ago is likely to trouble markets once again before the year is out.