Equity crosses the line

The lights seems to be flashing amber for commodities and the USD while equity markets remained on the highway, clocking fresh gains overnight. 

US Stocks
Source: Bloomberg

Crossing the 19,000 mark on the Dow Jones has been something that the market awaited and the lead up to the break was impressive. Nevertheless, recalling the previous 18,000 level, a good one and half years traversed between the first crossing and a clear break and we will not be surprised to see a repeat.

The more comprehensive S&P 500 index creeped up further as well to break above 2200, printing a fresh high of 2204.80 on Tuesday, much to the glee of technical traders. Undertaking the lead on Tuesday had been the telecommunication sector while the energy sector ended almost flat after Monday’s run.

A lookback into the past month finds financials and industrials the clear outperformers while the remaining gainers played catch up in the past week. President-elect Donald Trump took to the stage to share some of his plans at the start of the week. Investors will be curious to find out which sectors could experience regulatory changes that could lead to further growth.  

Source: Bloomberg

Trump’s other announcement to withdraw from the TPP meanwhile only strengthened the resolve for the Regional Comprehensive Economic Partnership (RCEP) as Asian countries huddled around the Chinese-led trade pact. Although this is short of the US anchor, many of the Asian countries that had yearned for a seat at the TPP table can now be part of the regional deal with their immediate trading partners.

Notably, the acceleration in crude oil prices took a turn overnight. WTI futures settled to trade on either side of $48.00/bbl after the brief break above $49.00/bbl level as the OPEC technical committee concluded their meeting. Delegates with knowledge of the matter revealed that the matter had not been resolved with regards to whether Iraq and Iran will partake in any production cuts, increasing the event risk for the November 30th meeting.

Near-term influences will meanwhile be expected from the EIA report overnight after the American Petroleum Institute (API) reflected that crude oil inventories declined 1.28 million barrels for the previous week.

 

The day

Thin markets trading in Japan today with the market away for Labor Thanksgiving holiday. Early movers including the ASX 200 and KOSPI basked in the positive leads for a second open. A flat USD index has meanwhile brought gold prices back to the consolidation levels on either side of $1210.

An eventful day is in line for Asia with Singapore’s October inflation rate, Malaysia’s central bank interest rate decision and Taiwan’s October industrial production due in chronological order. 

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