Trader’s thoughts – equity markets move higher but conviction wanes

The concerns regarding a slow-down in global growth have abated somewhat, though the issue is still simmering.

trader's thoughts Source: Bloomberg

Sentiment cooling:

Sentiment is cooling and the drivers that have sustained global equity's recovery are subsiding. It's no cause for alarm (yet) by any means. The markets are demonstrating a level of short-term exhaustion after its chaotic December. The same risks remain; traders have just shifted their views. The concerns regarding a slow-down in global growth have abated somewhat, though the issue is still simmering. The outlook for how the Fed will approach policy is being judged as more-dovish, however it remains an ambiguous matter. The US and China appear to be pushing for a trade-deal, but it's known that it will be a protracted process to arrive at one. The US government shut down is down the list of worries for markets for now, although it is gradually gaining greater significance.

ASX200’s crossroads:

SPI futures are currently indicating a modest jump of 5 points for the ASX 200 at the open. The conviction for Aussie-market Bulls will be tested today. The ASX 200 stands before a reasonably significant wall, that if climbed, goes some way to validate that it's recent rally is more than a counter-trend. The zone between 5780 and 5800 has proven a marshy resistance area in the last two-days. The Bulls have done well to push the market through prevailing downward trend-line resistance, but now a meaningful push through 5800 is required to confirm the move higher. After a lukewarm day, the ASX managed to close at 5797, courtesy of a somewhat inexplicable 0.3 per cent jump in the index's price in the after-market auction.

Australian Retail Sales:

The macro-news for Australian markets has been relatively dull lately. Local shares, along with other assets, have traded very much in sympathy with developments on Wall Street. For justified reasoning too: sentiment to begin 2019 has been dictated by renewed optimism relating to the trade-war – a conflict that impacts the Australian economic outlook more than most. Overall, that will remain so given critical juncture US stocks are at. However today, Australian traders get their first real-dose of economic data: local retail sales figures for the month of November. The print is expected to reveal that sales expanded by 0.3 per cent month-on-month – a figure that is expected to be underpinned by strong Black Friday activity that month.

Australian interest rates:

Following the weaker December GDP figures, and against the backdrop of high private debt levels and falling house prices, analysts have generally expressed the concern that households are in a difficult spot. Given consumption contributes just over 50 per cent of total GDP, the perceived economic headwinds for consumers is driving markets to price in some-degree of an economic slow-down in 2019. On current pricing, interest rate markets have an implied probability of about 30 per cent that the RBA will cut rates before December this year. Today's retail sales figures will offer one of the first glimpses into what state the Australian consumer is in, with rates markets, and the AUD, sure to shift in the event of an upside or downside surprise.

Global-macro:

Of course, given Australia's status as an export driven economy, subject to the whims of the globe's economic (mis)fortunes, the broader macro-backdrop is crucial. Several data releases rattled market's nerves in the last 24 hours. Chinese CPI and PPI figures missed forecasts by some way, indicating softening demand within China's domestic economy; and ECB Monetary policy minutes all but confirmed the continent is heading for a slowdown in economic activity. Stock indices were unmoved on the news; however, a level of risk aversion was observable within markets. US Treasuries caught a small-bid and the US Dollar climbed on a pullback in the Euro. While a rotation into non-cyclical stocks, took place in Europe and to a less extent the US, as growth appetite diminished.

Powell speaks again:

Once again, the night's biggest release came out of the US and related to the US Federal Reserve. Fed-Chair Jerome Powell delivered a speech, and in all, while received in a better way than some of Powell's other addresses, markets didn't like the tone. There was a lot of emphasis on the unwinding of the Fed's balance sheet, and how that endeavour may progress in the year ahead. He also seemed to go to pains to emphasise how flexible and patient the Fed would be. Although it hasn't derailed US stocks so-far today, traders didn't hear enough of what they wanted to turn overly bullish on the market. With an hour left in play, the S&P500 is hovering between slight gains and slight losses for the day.

Trump dumps Davos; CPI data tonight:

To be fair on Mr. Powell, his speech did coincide with a Tweet from US President Trump announcing that he would be abandoning the economic summit in Davos to deal with the US Government shut-down. Markets didn't like that either: it was expected President Trump would further trade-talks with Chinese President Xi Jinping at the summit. Nevertheless, if US stocks were to close right now, the activity in the market would add-weight to the notion the recent rally is more bounce than recovery. The jury is still out, but momentum is slowing and at about 2600, the market is being faded. US CPI data is released tonight, so that may provide the impetus for even balanced battle between the bulls-and-bears to tip in one direction or the other.


Denne informasjonen har blitt forberedt av IG Europe GmbH og IG Markets Ltd (begge IG). I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

Ser du en mulighet til å trade?

Hos IG kan du gå long eller short på mer enn 16 000 markeder.

Trade CFDer på vår prisvinnende plattform med lave spreader på indekser, aksjer, råvarer og mer.

Realtidskurser på våre mest populære markeder

  • Valuta
  • Aksjer
  • Indekser
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Kursene ovenfor er underlagt nettstedets vilkår og betingelser. Kursene er kun veiledende. Alle aksjekurser er forsinket med minst 15 minutter.

Kanskje du også er interessert i...

Beregne dine potensielle tradingkostnader med vår transparente avgiftstruktur.

Finn ut hvorfor så mange kunder velger oss og hva som gjør oss til en verdensledende leverandør innen CFDer.

Være forberedt på kommende markedsbegivenheter med vår økonomiske kalender.

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 75 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren. Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger. Profesjonelle kunder kan tape mer enn sitt opprinnelige innskudd. Opsjoner og turbowarranter er komplekse finansielle instrument og du risikerer kapitalen din. CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.