Market Commentary 03 Dec 2019

HIGHLIGHTS

The stock market ended a fantastic record-setting week with a whimper when the DOW and S&P dropped 0.4% and Nasdaq off 0.5% although trading volume was very light. Trump had signed the “Hongkong Bill” creating some uncertainty on the phase-one deal and there might be some form of retaliation from China. We will have to wait for the Unemployment Report and ISM manufacturing later this week. In the meantime, the market might pull back after setting new highs last week.

Crude was down around 4% last Friday and the OPEC meeting is pencilled this week.

DOW Chart

DOW -        up 20.3 % YTD

S&P –          up 25.3 %   YTD

NASDAQ – up 30.6 % YTD

HEADS UP

• USD ISM Employment (NOV)
• USD ISM Manufacturing (NOV)
• AUD RBA Cash Rate
• AUD Australian Gross Dom Product
• CAD Bank of Canada Rate Decision
• USD ISM Non-Manufacturing/ Services
• CAD Unemployment Rate
• USD Change in Non-Farm Payrolls (NOV)
• USD Unemployment Rates (NOV)
• USD U. of Michigan Sentiment

DAILY FEEDS

GOLD:

Gold traded within a tight band due to conflicting news on the “phase-one” negotiations. One moment they were getting close to finalizing the deal but then President Trump signs the Hongkong Human Rights Bill adding to more uncertainty and hurting the trade deal. Trading volume was light due to Thanksgiving in the US. The jobless data from the US later this week might show if employment is still strong.

EUR:

With the ECB transitioning to new leadership and Thanksgiving in the US, Euro has flat-lined around the 1.10 mark. It needs to surge higher above 1.12 for the next leg up.

YEN:

USD/JPY has been pushing higher and trying to break above the 110 marks. If it breaches this figure, then we might even see the 112 targets.

YEN Chart

AUD:

The AUD continues to struggle and has been sliding towards the mid-67s. There is strong support on that double bottom of 67 handles. A lot will still depend on the trade negotiations between the US and China. Any positive outcome on the trade negotiations will be good for the AUD as well. This week, we will have a few Australian economic data such as GDP and RBA rate announcement.

BITCOIN:

After finding support at the $6,700 level, Bitcoin dropped 6% from Friday’s close and currently at $7,300. This $6,700 is significant support and if it breaks below that, we might see it test the $5,000 mark. There is barely enough volume to move the market up with only less than $20B traded versus $45B a few days ago.