Markets volatile despite holidays

As much of the Western world stops to observe Remembrance Day today, we were always likely to see lower volumes in trade to account for the US, Canadian and French public holidays. 

An Alibaba office
Source: Bloomberg

However, the existence of lower volumes has done little to stand in the way of price action, with volatility relatively high as reflected by the strong UK session and subsequent selloff at the open of US markets.

Chinese economics are back on the agenda once more today, with yet another dampener in the form of disappointing industrial production and fixed asset investment numbers. However, the one saving grace today was retail sales, which saw a marginal rise in October on the same day that Alibaba set new all-time records for ‘Singles Day’ sales, far surpassing last year’s total of $9.3 billion. Coming in the week that Chinese trade data fell once more, the importance of domestic consumption should not be understated for its role in pulling the Chinese economy out of this slowdown.

UK jobs data provided somewhat mixed signals, with both the claimant count and average earnings undershooting to dampen the positive mood seen after the unemployment rate fell to 5.3%; the lowest level since Spring 2008. While markets will see today’s fall in unemployment as a key factor determining the Bank of England’s rate hike timetable, the problem has not been the jobs market and while inflation continues to flounder, we are unlikely to see a move in the coming months.

AB InBev moved a step closer to a historic takeover of SABMiller today, with the agreement to sell SABMiller’s stake in MillerCoors. The resulting mega brewer would be head and shoulders above any other firm in the sector, and this is questionable in terms of the impact it would have upon competition. However, given that SABMiller has focused its efforts into Latin America and Africa, this is arguably a deal which would benefit shareholders rather than simply management.

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