Stocks rebound to records ahead of deal signing

January 14, 2020

By IFCMarkets

Earnings season kicks off today

US stock market rebounded on Monday amid talks US planned to withdraw its designation of China as a currency manipulator ahead of Wednesday’s expected signing of a phase one trade deal. The S&P 500 advanced 0.7% to new record 3288.13. Dow Jones industrial added 0.3% to 28907. The Nasdaq rose 1% to all time high 9273.93. The dollar weakening reversed as US ran a budget deficit of $13.3 billion in December, a drop of just 2% from December of 2019. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, inched up to 97.36 but is lower currently. Fourth quarter earnings season starts today with JP Morgan and Wells Fargo set to release results. Futures in stock indexes point to lower openings today.

FTSE 100 gained while European indexes retreated

European stocks retreat continued on Monday. The EUR/USD accelerated its climb while GBP/USD decline speeded up yesterday as Bank of England Monetary Policy Committee member indicated that he may vote to cut interest rates if upcoming data fails to show a rebound in the British economy. The dynamics is holding currently for both pairs. The Stoxx Europe 600 index lost 0.2% led by auto shares. The DAX 30 fell 0.2% to 13126.99 as wholesale prices were stable over month in December when an uptick was expected. France’s CAC 40 slid 0.0.2% while UK’s FTSE 100 gained 0.4% to 7617.60.

Australia’s All Ordinaries Index leads Asian indexes gains

Asian stock indices are mixed today. Nikkei rebounded 0.7% to 24025.17 as Japan’s markets reopened with yen slide against the dollar continuing. Markets in China are lower despite news US Treasury Department announced it “has determined that China should no longer be designated as a currency manipulator at this time” : the Shanghai Composite Index is down 0.3% and Hong Kong’s Hang Seng Index is 0.2% lower. Australia’s All Ordinaries Index rebounded 0.9% with Australian dollar little changed against the greenback.

AU200 rising above MA(50) 1/14/2020 Market Overview IFC Markets chart

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Saudi Aramco shares mirror Brent move

Brent futures prices are extending losses today. Prices ended lower yesterday: march Brent crude closed 1.2% lower at $64.20 a barrel on Monday. Saudi Aramco ‘s shares continue trading on the country’s Tadawul exchange. Shares closed at 34.75 riyals on Monday, a tad lower from Sunday’s close at 34.80 riyals following announcement the company had sold additional 450 million shares during the initial public offering process as per the greenshoe or over-allotment option of the IPO. Saudi Aramco’s sales of additional shares mean the company has publicly floated 1.7 percent of its shares.

Gold retreat continues

Gold prices are edging lower today. Gold prices ended at near five month low: February gold lost 0.6% to 1550.60 an ounce on Monday.

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