Market Report, correction time.
Good morning,
All the main markets in the world are now trading in a little correction line, which started yesterday and maybe will continue until tomorrow, global equities had strengthened broadly amid hopes that increased fiscal spending and tax cuts under Donald Trump’s administration will bolster economic growth and inflation. But yesterday the time to take profit arrived, the Dow Jones fell -0.29% and the S&P 500 closed with loses at -0.16%, but the technologic sector started to recovery the stronger with a Nasdaq Composite gained +0.36%.
European stocks were mostly lower on this morning, as markets continued to pause after the recent post-U.S. election rally. Now, a few days post-election, investors should recognize that markets mostly reflect hopes, fears, and high frequency trading shenanigans, for that a major rotation is going on in the U.S. stock market reflecting the effect to the rest of them, some sectors have actually lost a lot of ground, while others have rallied so much that they have managed to cause rallies in some of the major indexes. Investors should be moving their holdings out of the underperforming sectors and into those that are outperforming.
In the forex markets the strong dollar rally have already produced the effect of at least two interest rate hikes. Thus it is unlikely that the Fed is going to adopt a rate hiking stance. A strong dollar is not good for multinationals, so maybe we will see strong negative reactions in a short term in that kind of important companies. In the oder hand and in terms of economic policy, Trump’s top priority appears to be boosting economic growth and creating jobs at home. If this comes to pass, the US dollar may appreciate further against other currencies, in particular the euro. One reason is that the yield gap between the US and the euro is set to widen, making the euro less attractive.
Looking into of the commodities, the Oil rose around 6% Monday, its best one day performance since April, on renewed hopes of an OPEC deal to cut production. But prices are now dipping lower after official inventory reports indicated a larger-than-expected build in U.S. oil stocks. Crude inventories in the United States rose by 5.3 million barrels in the week to Nov. 11, compared with expectations for an increase of 1.5 million barrels.
GOLD
After an initial surge in the hours after Donald Trump’s election, the price of gold has been under pressure. Since the metal has dropped so far, so quickly, we would not be surprised to see a bit of a bounce down here especially now that it has been able to hold initial support levels above $1200.
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AMAZON
Amazon for the first time has filed lawsuits against counterfeit sellers, after a number of businesses voiced concern that knockoffs were killing their sales and endangering consumers. Amazon has increasingly relied on third-party sellers to fuel its growth, but opening its website brought with it a greater chance for fake goods to enter its warehouses. So, is possible to see a positive correction in Amazon stocks.
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MarKos
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