Dow comes within a fraction of 20,000 – Binary Options Daily Review

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MarketsWorld
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Monday 9th January 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 4,909.84 + 9.24 4,874.42 – 4,911.49
DAX 11,599.01 + 14.07 11,547.00 – 11,605.70
Dow Jones 19,963.80 – 42.87 19,834.10 – 19,999.60
FTSE 7,210.05 + 14.74 7,180.64 – 7,210.05
IBEX 9,515.90 + 27.70 9,451.20 – 9,515.90

Closing Markets Summary

Dow Jones

Stocks in the US closed higher on Friday with the Dow Jones coming within touching distance of the physiological 20,000 point level following a solid jobs report. The jobs report helped to lift the dollar and yields, the rebound in the dollar comes a day after the greenback dropped by the most since July 2016. That slide came after minutes from the Fed’s December meeting pointed to a number of risks that could change the path of its policy. The ICE Dollar Index rose 0.7% to 102.24 and the yield on the 10-year Treasury also rebounded, rising 7 basis points to 2.42%. Economic data showed that the US economy created 156,000 jobs last month, below forecasts for 180,000, however a sharp upward revisions for November jobs number and a slight trimming of October number means the latest payrolls were more or less in line. Wage growth which is often seen as a precursor to inflation picked up to mark the fastest annual increase since a recovery that began in mid-2009. In other economic news, the US trade deficit rose almost 7% in November as imports hit the highest level in nearly a year and a half, largely because of a gush of foreign oil. There were a number of hawkish comments from Fed speakers on Friday, Cleveland Fed President Loretta Mester said she would like to see the central bank raise interest rates more than the three quarter-percentage-point moves favoured by the majority of her colleagues. Richmond Fed President Jeffrey Lacker said interest rates may need to rise “more briskly than markets anticipate” with unemployment at or near sustainable employment and inflation “very close” to the 2% target. Chicago Fed President Charles Evans said economic conditions are likely to call for two interest-rate hikes in 2017, but a forecast of three hikes is “not implausible.” Companies that featured included Amgen Inc. which moved up 2.5% after a federal judge said rivals Regeneron Pharmaceuticals Inc. and Sanofi SA must pull their competing cholesterol drug Praluent off the market as a penalty in a patent lawsuit. Ruby Tuesday Inc. dropped 25% after the restaurant chain late Thursday reported a wider second-quarter loss following a double-digit drop in revenue. Gap Inc. gave up most of the their gains, finishing only 0.4% higher after the retailer late Thursday reported growing holiday sales. AT&T Inc. dropped 2% after news reports on Thursday that President-elect Donald Trump is still opposed to the merger with Time Warner, a view he expressed during the campaign. The Dow Jones closed up 64.51 points at 19,963.80, just short of its previous closing record of 19,974.62, the index reached an intraday record of 19,999.63. The S&P 500 closed up 7.98 points at a record high of 2,276.98 and the Nasdaq Composite closed up 33.12 points at a record 5,521.06.

Europe

European equity markets closed little changed on Friday as investors reacted to US nonfarm payrolls that came in lower than expected. The Pan-European Stoxx 600 index trimmed losses to end the session down 0.05% at 365.45. Oil prices rose as Saudi Arabia and Abu Dhabi implemented supply cuts. West Texas Intermediate was up 0.5% to $54.04 per barrel and Brent crude was up 0.4% at $57.10. US employers added fewer than forecast jobs in December while the unemployment rate rose in line with forecasts, nonfarm payrolls rose 156,000 last month, well below forecasts of 178,000, November was revised up to 204,000 jobs from a previous estimate of a 178,000 gain. The jobless rate edged up to 4.7% in December from 4.6% in November and the number of unemployed persons was little changed at 7.5m. Economic data in the euro-area showed that economic confidence rose more than forecast in December as sentiment improved in the retail trade, industry and among consumers. The economic sentiment indicator increased by 1.2 points to 107.8, ahead of forecasts for a reading of 106.8. Retail sales in the 19 countries that share the euro fell as forecast in November, retail sales were down 0.4% compared with October, in line with forecasts. On the year, sales were up 2.3%, compared to a 2.4% increase in October. In Germany Destatis reported that German manufacturing orders fell 2.5% in November from October, when they rose a revised 5%. This was steeper than the 2.3% decline that had been forecast. Retail sales in Germany were down 1.8% on the month in November, worse than forecasts for a 0.9% drop. Companies that featured included Swiss pharmaceutical company Novartis which edged lower as it agreed to pay up to $1.6bn to buy Ionis Pharmaceuticals and its unit Akcea Therapeutics for the rights to two cardiovascular drugs. Sanofi was also lower after a US Federal judge ruled that the drug maker and its partner Regeneron Pharmaceuticals infringed the patent that Amgen holds for its new cholesterol drug. EasyJet was higher after it said passenger numbers jumped 15.1% to 5.57m in December compared to the same month the previous year, while the load factor rose 3.3 percentage points to 89.9%. On regional markets the CAC closed up 9.24 points at 4,909.84, the DAX closed up 14.07 points at 11,599.01 and the IBEX closed up 27.70 points at 9,515.90.

FTSE

The FTSE closed slightly higher on Friday and another record close as the pound weakened and as investors weighed a slightly weaker than forecast US nonfarm payrolls report. Oil prices reversed earlier gains as Saudi Arabia and Abu Dhabi started supply cuts but doubts remained that all OPEC producers will reduce production in line with the agreement reached in November. Brent crude was down 0.92% at $56.37 per barrel and West Texas Intermediate was down 0.69% at $53.39 per barrel at the close of the equity market. US employers added fewer than forecast jobs in December while the unemployment rate rose in line with forecasts, nonfarm payrolls rose 156,000 last month, well below forecasts of 178,000, November was revised up to 204,000 jobs from a previous estimate of a 178,000 gain. The jobless rate edged up to 4.7% in December from 4.6% in November and the number of unemployed persons was little changed at 7.5m. Companies that featured included Lloyds Banking Group which moved higher as Barclays upgraded its recommendation to ‘overweight’ from ‘equalweight’ and pushed the target price to 75p from 55p, saying returns are supported by the planned MBNA acquisition and an improved net interest margin outlook. EasyJet moved higher as its passenger numbers and load factor improved in December, passenger numbers jumped 15.1% to 5.57m last month when compared to the same month the previous year. Worldpay got a boost as Exane BNP Paribas upgraded its stock to ‘outperform’ from ‘neutral’ and lifted the price target to 340p from 290p, saying last year’s de-rating provides a better entry point. Interdealer broker TP ICAP, formerly Tullett Prebon, gained as it said it saw increased trading activity in the final quarter of 2016 and expects an increase in revenue for the year. International Personal Finance was lower as it said it would appeal against a decision by the Polish tax authority regarding the accounts of its Polish business for the 2008 financial year. The FTSE closed up 14.74 points at 7,210.05.

Economic News Expected Today

 USA

Type Period Forecast   Importance
CB Employment Trends Index Dec   130.00 Low
Consumer Credit Nov $18.60bln $16.02bln Low

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
Industrial Production (Germany) Nov 0.7% m/m 0.3% m/m Medium
Exports (Germany) Nov 0.6% m/m 0.5% m/m Low
Imports (Germany) Nov -0.1% m/m 1.3% Low
Trade Balance (Germany) Nov €21.4bln €20.50bln Medium
Monthly Unemployment Rate (Italy) Nov   11.6% Low
Sentix Investor Confidence (Eurozone) Jan 12.0 10.0 Medium
Unemployment Rate (Eurozone) Nov 9.8% 9.8% Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
Halifax House Price Index Dec   0.2% m/m; 6.0% y/y Medium

Other Global Economic Data Expected

 

Type Period Forecast Previous Importance
Building Approvals (Australia) Nov   -12.6% m/m Medium
CPI (Canada) Dec   0.1% m/m; 2.3% y/y High

Economic News Round Up MarketsWorld Bars

US nonfarm payrolls rose less than forecast last month, the US Department of Labor reported that nonfarm payrolls rose to a seasonally adjusted 156K, from 204K in the previous month whose figure was revised up from 178K. US nonfarm payrolls were forecast to rise 178K last month. The US Department of Labor reported that the unemployment rate rose to a seasonally adjusted 4.7%, from 4.6% in the previous month. The US unemployment rate was forecast to rise to 4.7% last month. The US Bureau of Labor Statistics, Department of Labor reported that average hourly earnings in the US rose to a seasonally adjusted 0.4%, from -0.1% in the previous month. Average hourly earnings were forecast to rise to 0.3% last month. The US trade balance fell last month, the Bureau of Economic Analysis reported that the US trade balance fell to a seasonally adjusted -45.20B, from -$42.40B in the previous month whose figure was revised up from -$42.60B. The US trade balance was forecast to rise to -$42.50B last month.

Retail sales in the Eurozone fell last month, Eurostat reported that Eurozone retail sales fell to -0.4%, from 1.4% in the previous month whose figure was revised up from 1.1%. Forecasts were for Eurozone retail sales to fall to -0.4% last month. Eurozone economic sentiment was much better than forecast in December, the Commission’s monthly survey showed economic sentiment in the 19 countries sharing the euro rose to 107.8 in December from 106.6 in November, well above the long-term average of 100. Forecasts were for an improvement in the sentiment only to 106.8. The Commission’s business climate indicator, which points to the phase of the business cycle, rose to 0.79, its highest level since June 2011 when it was 1.03.

Retail sales in Germany fell more than forecast last month, Destatis reported that German retail sales fell to a seasonally adjusted -1.8%, from 2.5% in the previous month whose figure was revised up from 2.4%. German retail sales were forecast to fall -0.6% last month. German factory orders fell more than forecast last month, Bundesministerium für Wirtschaft und Technologie reported that German factory orders fell to a seasonally adjusted -2.5%, from 5.0% in the previous month whose figure was revised up from 4.9%. German factory orders were forecast to fall -2.3% last month.

Canadian employment change rose last month, Statistics Canada reported that Canadian employment change rose to a seasonally adjusted 53.7K, from 10.7K in the previous month. Canadian employment change was forecast to fall -5.0K last month. The unemployment rate rose to a seasonally adjusted 6.9%, from 6.8% in the previous month. The unemployment rate was forecast to rise to 6.9% last month. Canada’s trade balance rose last month, Statistics Canada reported that the Canadian trade balance rose to a seasonally adjusted 0.53B, from -1.02B in the previous month whose figure was revised up from -1.13B. The Canadian trade balance was forecast to fall to -1.60B last month. Canada’s Ivey Purchasing Manager’s Index rose last month, the Richard Ivey School of Business reported that the Ivey PMI rose to 60.8, from 56.8 in the previous month. Forecasts were for the Ivey PMI to fall to 56.8 last month.

Australia’s trade balance rose more than forecast last month, the Australian Bureau of Statistics reported that Australia’s trade balance rose to a seasonally adjusted AUD$1.243B, from -AUD$1.119B in the previous month whose figure was revised up from -AUD$1.541B. Australia’s trade balance was forecast to rise to -AUD$0.500B last month.

 
Forex Round Up MarketsWorld Bars

The Dollar was higher on Friday recovering from the previous days slide but was still on course for a second straight weekly loss after the release of jobs data and apparent action by Chinese authorities to shore up the yuan. Data showed that US nonfarm payrolls rose to a seasonally adjusted 156K, from 204K in the previous month whose figure was revised up from 178K below forecasts for a rise of 178K. The unemployment rate rose to a seasonally adjusted 4.7%, which was in line with forecasts.

There was more action in Beijing overnight as borrowing rates for the offshore yuan or CNH jumped to 61% , their highest in a year, and the CNH headed for its biggest weekly gains since it was introduced in 2010. The Pound was lower following two days of gains and ahead of a decision in the next week or two on parliament’s role in Brexit negotiations, the GBP/USD was down 0.78% at $1.2321.

The EUR/USD w as down 0.30% at $1.0572. The USD/CAD was little changed at CAD$1.3216. The Australian dollar was lower after hitting three week highs overnight after Australia posted its first trade surplus in almost three years in November, The AUD/USD was down 0.31% at $0.7312. The US Dollar Index was up 0.48% at 101.88.

 
Commodity Round Up MarketsWorld Bars

Gold futures settled lower on Friday as a stronger Dollar and firmer equities following the monthly domestic jobs report which dulled investment demand for the precious metal. February gold fell $7.90 to settle at $1,173.40 per ounce, for the week gold logged a 1.8% gain. March silver fell $0.118 to settle at $16.519 per ounce, paring its weekly rise to 3.3%.

Crude oil futures finished modestly higher Friday, making it fourth straight week of gains ongoing signs of compliance with a global pact to cut production. February West Texas Intermediate crude rose $0.23 to settle at $53.99 a barrel after trading as low as $53.32. For the week the price rose around 0.5%. The March contract for Brent crude rose $0.21 to settle at $57.10 per barrel, for a weekly gain of about 0.5%.

The MarketsWorld Overview MarketsWorld Bars

With Germany the powerhouse of the Eurozone region, industrial production from the giant is closely watched. In October output rose by 0.3% after slide in the previous month. Output in November is forecast to rise 0.7%. Monitor the Euro for Binary Options trading for any effect this forecast has.

 

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The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects Barry Jenkins’ (MarketsWorld Analyst) current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterized by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable. This message is intended for recipient only and not for further distribution without the consent of MarketsWorld.

 
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Written by Barry Jenkins

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