TradingView: Expect the unexpected


  • Markets
  • Sunday, 15 Dec 2019

Once again, major market indices hit new records. One of the main reasons is the signing of the Phase One trade deal between the U.S. and China. Trump has agreed to forgo Dec 15 tariffs on Chinese goods indefinitely, whereas China agreed to buy US$16 bil more in US agricultural products in the first year, up from the 2017 baseline of US$24bil.

THE current situation of the financial markets and geopolitical stage can be described with only one phrase: expect the unexpected.

Who could have thought in the first half of the year that stock markets will not only recover from December’s fall but accelerate their growth, hitting record highs.

Whether you like it or not, the good part of that success can be contributed to the U.S. President, the person whom everyone predicted if not an impeachment, then at least spectacular and glorious, failure.

Trumps first presidential term is coming to an end and the question should be asked, is a recession coming?

According to Bloomberg Economics October data, the chance of a US recession within the next year stays at 2 9%, after an upwardly revised 27% in the prior month.

That reading is lower than highs reached earlier this year and keeps decreasing thanks to positive readings across November data.

According to last week’s prints, the annual rate of core inflation continues to grow steadily at 2.3%, consumer prices increased by 0.3% in November vs 0.2% forecast, meanwhile, consumer prices October had risen by 0.4%.

As a result, it should not be a surprise that the US economy is expected to continue growing steadily over the next few years, outpacing many other western countries.

The most important news last week

  • The Tories’ big win in the UK elections
  • The United States and China reached phase one trade agreement
  • Central banks left rates unchanged, with the Fed signaling no rate change is expected in 2020
  • USMCA agreement was reached on Nafta trade deal replacement
Weekly market wrap

Once again, major market indices hit new records. One of the main reasons is the signing of the Phase One trade deal between the U.S. and China.

Trump has agreed to forgo Dec 15 tariffs on Chinese goods indefinitely, whereas China agreed to buy US$16 bil more in US agricultural products in the first year, up from the 2017 baseline of US$24bil.

In this context, the S&P 500 grew +0.73%, Dow Jones Industrial Average +0.43%, Nasdaq Composite +0.91%, Hang Seng index improved 4,49%, Nikkei 225 gained 2,86%, UK 100 Index went up by 1.57% and SX5E raised 1,05%.

The most important economic events to follow this week

On Monday, we will get the series of PMI data with flash meetings from France, Germany, the US and Euro Zone in terms of manufacturing. Investors will also be looking out for a composite reading from the US and the manufacturing and services data from the UK.

On Tuesday, we will get the latest Reserve Bank of Australia meeting minutes, together with an unemployment rate from the UK, US housing starts & building permits (November) and Eurozone trade balance, finishing the day with the US industrial production data and API crude oil stocks update.

On Wednesday, it is recommended to look out for the trade balance of November from Japan, the latest inflation rate from the UK for the month of November, Consumer Price Index from the Eurozone and the inflation rate from Canada.

In the case of Germany, we will know the IFO Business Climate atmosphere, together with the PPI. Also, watch out for Brent and WTI, as US EIA crude inventories data will be out: stockpiles rose by 822,000 barrels a week earlier.

On Thursday, we will get interest rate decisions from the Bank of Japan along with the Bank of England, unemployment rate data from Australia, retail sales from the UK and jobless claims from the US (may affect US indices and USD crosses).

The week will end with GFK Consumer Confidence figures from the UK for the month of December Germany; CPI reading from Japan; Consumer Confidence from the EU and US GDP (Q3, final), together with personal income & spending (November) from the U.S.

Companies to watch out

The following companies may see some unusual movements due to key data releases: Sports Direct int. (1H earnings), Oracle (2Q earnings), H&M (Q4 sales development), Bnuzdl (trading statement), FedEx (2Q earnings), Petrofac Ltd (3Q trading statement), General Mills (2Q results), Micron Technology (1Q earnings), Carnival (4Q earnings), Nike (2Q earnings), Accenture (1Q earnings).

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Brexit , Trump , corporate news

   

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