FTSE 100 logs 10th consecutive record closing high – Binary Options Daily Review

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Thursday 12th January 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 4,888.71 + 0.48 4,856.50 – 4,916.48
DAX 11,646.17 + 62.87 11,525.00 – 11,692.30
Dow Jones 19,954.28 + 98.75 19,833.20 – 19,973.40
FTSE 7,290.49 + 15.02 7,257.15 – 7,328.51
IBEX 9,408.60 – 43.40 9,378.60 – 9,468.10

Closing Markets Summary

Dow Jones

Stocks in the US rallied of their lows to close higher on Wednesday following President-elect Donald Trump’s press conference. The major indexes moved between small gains and losses during the session while biotech stocks were notable losers after Trump said companies were “getting away with murder” with respect to drug prices. Energy shares were among the day’s biggest gainers, rising alongside a jump in the price of crude oil. The uncertainty over Trumps economic policies were not alleviated by the news conference, the CBOE Volatility at one time rose more than 5%, though it remains well below its long-term average. There was no major economic data during session, however investors are looking ahead to speeches from several Fed officials over the next two days, including Chairwoman Janet Yellen, and retail sales data which are due Friday. Companies that featured included biotech stocks with the iShares Nasdaq Biotechnology ETF falling 3% while the SPDR S&P Biotech ETF lost 3.4% and the VanEck Vectors Biotech ETF dropped 2.7%. Supervalu Inc. fell 7.5% after reporting sales below forecasts. Merck & Co. rose 2.9% after the drugmaker said the Food and Drug Administration would grant a priority review for one of its lung-cancer drug treatments. Ford Motor Co. rose 1.5% after announcing a special dividend and gave updates on its forecasts late Tuesday. The Dow Jones rose 98.75 points to close at 19,954.28, after coming within 27 points of the 20,000 mark. The S&P 500 closed up 6.42 points at 2,275.32, a few points short of a new record. The Nasdaq Composite closed up 11.83 points at 5,563.65, its fifth record close in as many sessions, and the seventh straight day of gains.

Europe

European equity markets closed higher for a second straight day on Wednesday, but with drugmakers capping gains after a late-session selloff following remarks by US President-elect Donald Trump. The Pan-European Stoxx Europe 600 index ended 0.2% higher at 364.90. The pan-European index traded as high as 366.37 earlier in the day, but trimmed gains after Trump in his first full-scale press conference since July lashed out at the drug industry. The president-elect said that more bidding is needed on drug prices, implying legislation that could erode the sector’s profitability. Oil prices were higher despite data from the Energy Information Administration that showed crude inventories increased by 4.1 million barrels. Companies that featured included pharmaceutical companies which were lower across the board in Europe following the comments from Donald Trump. Novartis was down 1.3%, AstraZeneca PLC was down 1.8% and Sanofi was 1.3% lower. Oil companies tracked the oil price higher with Royal Dutch Shell PLC up 1.2%, Total FP up 0.6% and Statoil ASA up 0.6%. Volkswagen AG gained 3.4% after the German auto maker on Tuesday confirmed that it ha s agreed to pay $4.3 billion in penalties to the US Justice Department and Customs to settle charges that it used special software to cheat on diesel emissions tests, according to press reports. Engie SA fell 3% after the French government said late Tuesday it sold 100 million shares in the French power utility for 1.14 billion euros. On regional markets the CAC closed up 0.48 of a point, the DAX closed up 62.87 points at 11,646.17 and the IBEX closed down 43.40 points at 9,408.60.

FTSE

The FTSE closed higher on Wednesday after Bank of England Governor Mark Carney said that Brexit is no longer the most significant domestic risk to the UK’s financial stability. In his testimony to select committee lawmakers, Carney said Brexit was no longer the biggest risk to the UK economy following action taken by the Bank of England. “In the run up to referendum, we felt it was largest risk because there were things that could have happened which had financial stability implications,” he said. “Actions were taken to mitigate that, but having got through the day after, the scale of the immediate risks has gone down.” Carney also revealed the Bank of England is keeping an open-mind over potential interest rate hikes while at the same time reiterating that the central bank is willing to pull back on stimulus if needed. His comments failed to have much impact on the Pound with it falling 0.07% versus the euro at €1.1529 and declining 0.75% against the Dollar to $1.2086. Economic data showed that the UK trade deficit widened markedly in November due to a surge in imports. The overall trade deficit grew £2.6bn to £4.2bn by the end of November, as a £3.3bn increase in imports was only partially offset by a £0.7bn increase in exports. Seasonally adjusted construction output declined 0.2% on the previous month, extending the 0.6% fall in October when the market had expected a bounce back of 0.2%. UK industrial production rose by 2.1% in November compared to October and 2.0% versus the same month last year, which was more than double the forecast and reversed the falls from the preceding month. Manufacturing production was up 1.3% month-on-month, beating the consensus estimate of 0.50% and a turnaround from the revised 1% decline from the previous month. The National Institute of Economic and Social Research revealed UK economic growth slowed in the final three months of the year. GDP grew by 0.5% in the fourth quarter, down from growth of 0.6% in the third quarter but in line with market forecasts and the level of GDP growth in the three months ending November. Companies that featured included Sainsbury’s which was one of the top risers after the supermarket’s third-quarter like-for-like grocery sales were positive and group revenue was further lifted by recently-acquired Argos as online sales proved a crucial factor over the festive period. Total group sales for the 15 weeks to 7 January rose 0.8%, with group like for like sales were up 1.0% as weak like for like growth from the supermarkets business of 0.1% was offset by a 4% gain from Argos. BT Group moved up folowing an upgrade to ‘overweight’ from ‘equalweight’ by Morgan Stanley, which bumped up the price target to 490p from 450p. TUI was lower after a downgrade to ‘underperform’ from ‘outperform’ by Credit Suisse, which highlighted a series of key challenges across all segments of the group, leading to a 15% downgrade of 2018 earnings per share forecasts. Thomas Cook was also lower on a downgrade by Credit Suisse to ‘neutral from ‘outperform’. The FTSE closed up 15.02 points at 7,290.49 a 10th record closing high in a row.

Economic News Expected Today

 USA

Type Period Forecast   Importance
Chicago Fed President Evans Speaks Jan     Low
FOMC Member Harker Speaks Jan     Medium
Continuing Jobless Claims Jan 2,118K 2,112K Medium
Initial Jobless Claims Jan 255K 235K Medium
Jobless Claims 4 Week Avg Jan   256.75K Low
Import Price Index Dec 0.7% m/m -0.3% m/m Medium
Bloomber Consumer Confidence Jan   45.5 Low
FOMC Member Lockhart Speaks Jan     Medium
FOMC Member Bullard Speaks Jan     Medium
FOMC Member Kaplan Speaks Jan     Member
Federal Budget Balance Dec -$25.0bln -$137.0bln Medium

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
CPI (France) Dec 0.3% m/m 0.3% m/m Medium
Industrial Production (Italy) Nov 0.3% m/m; 2.0% y/y 0.0% m/m; 1.3% y/y Low
GDP (German) 12M 1.80% 1.70% Low
Industrial Production (Eurozone) Nov 0.5% m/m; 1.6% y/y -0.1% m/m; 0.6% y/y Medium
ECB Publishes Account of Monetary Policy Meeting Jan     Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
BoE Governor Carney Speaks Jan     High

Other Global Economic Data Expected

 

Type Period Forecast Previous Importance
New Housing Price Index (Canada) Nov 0.3% m/m 0.4% m/m Medium

Economic News Round Up MarketsWorld Bars

Applications for US mortgages rose last week with requests for loans to buy a home reaching a six-month high as mortgage rates declined for a second straight week, Mortgage Bankers Association reported that its seasonally adjusted measure on applications for mortgages rose to 379.2 in the week ended Jan. 6th, up 5.8% from the prior week.

Manufacturing production in the UK rose sharply in November, the UK Office for National Statistics reported that manufacturing production increased by a seasonally adjusted 1.3%, ahead of forecasts for a gain of 0.5% and following a decline of 1.0% a month earlier. On an annualized basis, manufacturing production rose at rate of 1.2%, better than forecasts for a gain of 0.4%, after declining at a rate of 0.5% in October. Industrial production increased by a seasonally adjusted 2.1%, compared to forecasts for a gain of 0.8% and following a decline of 1.1% in the preceding month. The National Institute of Economic and Social Research reported that Britain’s economy likely expanded by 0.5% in the final three months of last year, slowing slightly from the third quarter. It estimated Britain’s economy grew 2.0% in 2016 compared with 2.2% during the previous year, in line with the long-run potential growth rate of the economy. But it warned growth over the last year has been unbalanced, led by consumer spending.

 
Forex Round Up MarketsWorld Bars

The Dollar was higher against the other majors currencies on Wednesday, as investors were eyeing a press conference by US President-elect Donald Trump scheduled later in the day. The press conference will be Donald Trump’s first since his electoral victory in November and investors will be looking for more clarity on his future economical policies. The EUR/USD was down 0.81% at $1.0471.

In the UK the Office for National Statistics reported that manufacturing production increased 1.3% in November, ahead of forecasts for a gain of 0.5%. On an annualized basis, manufacturing production rose at rate of 1.2% in November, ahead of forecasts for a gain of 0.4%. Industrial production in the UK increased by 2.1% in November compared to forecasts for a gain of 0.8%. The GBP/USD declined 0.86% to £1.2071.

The USD/JPY was up 0.73% at ¥116.62 and the USD/CHF was up 0.61% to Fr1.0232. The Australian dollar was little changed with the AUD/USD at $0.7369 and the NZD/USD was down 0.26% at $0.6973. The USD/CAD was up 0.20% to trade at CAD$1.3258. The US Dollar Index was up 0.74% at 102.76.

 
Commodity Round Up MarketsWorld Bars

Gold prices ended with good gains on Wednesday and hit a six-week high Wednesday. The pricel became a bit volatile during President-Elect Donald Trump’s press conference, mainly because the US stock and bond markets became very jittery. The US Dollar Index also backed way off its daily high to trade sharply lower in early afternoon trading, which also lends support to the precious metals. February gold was up $7.60 per ounce at $1,193.10. March silver was down $0.018 at $16.83 per ounce.

Oil futures rose nearly 3% on Wednesday, buoyed by signs of Saudi compliance with the output cut agreement. US government data that revealed hefty weekly increases in domestic crude and petroleum-product stocks, along with an increase in oil production was largely ignored. February West Texas Intermediate crude rose $1.43 to settle at $52.25 per barrel, It was trading at $51.35 before the supply figures and climbed back above $52 as Trump spoke at his first press conference since the US election. March Brent crude rose $1.46 to settle at $55.10 per barrel.

The MarketsWorld Overview MarketsWorld Bars

In the US the number of Americans filing new claims for unemployment benefits dropped close to a 43 year low last week, confirming yet again the continuous improvement in the labor market. Claims fell by 28,000 to a seasonally adjusted 235,000 for the week ended Dec. 31st. The four-week moving average of claims declined 5,750 reaching 256,750. Forecasts are for a higher reading of 255,000. Monitor the Dollar for Binary Options trading.

 

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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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