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FBI Dropping Email Investigation
07 Nov 2016
Asia: markets bounce on news this morning that the FBI will be dropping the Clinton email investigation. SPX saw its longest streak of losses for 30 years, closing again lower on Friday, but only -3% has been retraced over that time. Payrolls Friday slightly below but average hourly wages rose increasing the likelihood of a rate hike in December. This week data is light with EU IP numbers and markets will be dominated with US election tomorrow and results will be known Wednesday Asian time. Gold falls as USD rebounds and Bonds also sold to switch to equities. Earnings reports start to wind down. Asian markets reversing last week's performances with the weakest last week performing better today and visa versa. Nikkei +1.2% as USDJPY rises above 104.00, uptrend support holds at 16,900 with Consumer Discretion and Financials leading. Shanghai -0.2% and Finance Minister Lou Jiwei replaced by Xiao Jie. RMB fixing firmer. HK +0.4% underperforming the groin after late Friday Govt hikes Stamp Duty to 15% for non-first time buyers to cool property prices. Taiwan +1.1% with no clear leaders and largecaps all gaining slightly over +1%. King Yuan Demark sell exhaustion today and good entry point. Korea +0.7% with Samsung +1%. Kepco -2% hits Demark 13 Sell exhaustion today and HSBC upgraded to Buy on Friday, good entry point. Major currencies weaker vs USD and Asian currencies a tick higher. Gold $1292 and Oil $44.50. Best Sectors Financials, Discretionary and Coal. Worst Sectors Property, Telcos and Energy.
U.S Equities: posted their longest slide since 1980, while Treasuries rallied after data showing progress in the American labor market did little to soothe anxiety over the presidential election. Oil slumped. The S&P 500 Index dropped for a ninth straight day, a gauge of equity volatility had the longest stretch of gains on record and Treasuries climbed the most since September ahead of next week’s vote. All the jitters sent the dollar down after a brief advance that followed data showing U.S. jobs rose at a steady pace in October, supporting a Federal Reserve hike next month. Oil sank as hopes faded that OPEC will be able to implement a deal to cut output. The VIX advance to 73% over nine days in the longest climb on record, while investors pulled the most money in three weeks from an ETF that tracks the S&P 500. Traders have piled into relatively safer assets as opinion polls showed the U.S. presidential race tightening after Hillary Clinton seemed poised for victory. While American stocks have almost always risen in the days before a presidential election, anxiety about the outcome of the Nov. 8 vote has weighed on the market this time, overshadowing key reports such as the jobs data. Republican nominee Donald Trump showed strength in Iowa and Ohio pre-Election Day voting, while Clinton’s advantage in early balloting looked favorable in North Carolina and Nevada, according to a Bloomberg Political analysis. A report showed payrolls climbed by 161,000 last month following a 191,000 gain in September that was larger than previously estimated. Wages rose from a year earlier by the most since 2009, and the jobless rate fell to 4.9 %. The figures are likely to keep the Fed on track to raise borrowing costs next month for the first time in 2016. The S&P 500 fell 0.2 % to 2,085.18 at 4 p.m. in New York, after erasing a 0.5 % advance.. Crude’s drop weighed on oil producers.
Commodities: Oil rebounded amid a broader market rally ahead of the U.S. election as Algeria remains confident OPEC will set output quotas at its next meeting to manage production.
Copper and nickel climbed to the highest in more than a year in Shanghai after the FBI kept to its view that Hillary Clinton’s handling of e-mails wasn’t a crime, boosting her election chances. Concern over violent protests in Jakarta on Friday pushed up nickel.