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US Election Day

08 Nov 2016

Asia: Election Day and Asian markets tread water ahead of the polling booths opening. Latest poll shows Clinton leads by 4 points. Overnight US stocks saw their largest gains in 8 months after Clinton email investigation ends. Europe +2% and Brazil +4% on Commodity related gains, Copper breaking a 2 year down trend and Nickel +5% on shortages to run into next year. Asian equities following MXN so far today. Nikkei -0.1% gives up early gains, but USDJPY 104.44 not moving. Japan Steel Works -10% on earnings and Financials lead. Shanghai +0.2%. Chinese FX reserves drop $46bn suggesting outflows larger than expected and looking for further drift in CNY with key level 6.83, the level the RMB was fixed during the GFC. MSCI decision late Monday and we may get some further progress on China A share inclusion in June 2017. HK +0.2% and Property mixed after yesterday's heavy fall. FT says Stamp Duty hike will do little to stem demand and developers will probably offer incentives soon.. Taiwan -0.2% with some profit taking after yesterday's rally. Steve Pelayo downgrade in Vanguard has seen the stock fall -8% over the last 3 days. Korea, flat and Hyundai Development hits Demark sell exhaustion after -10% move since we highlighted a short and worth covering. Hynix, flat in spite of Moody upgrade. Samsung , also flat and their offices were raided in a highly political move. Kepco +1% bounces off Demark 13 sell exhaustion yesterday. Indian Banks may shine after ICICI bk numbers good and ADR +6%, Axis Bank also bounces off 61.8% Fibonacci support. Currencies mixed. Gold $1282 weak and Oil $44.78 no bounce. Best Sectors Financials, Metals and Healthcare. Worst Sectors Energy, Coal and Tech.


U.S Equities: The U.S. stock market rebounded from a nine-day losing streak Monday, posting its biggest gain in eight months and driving the Dow Jones industrial average up more than 370 points. Financial stocks led the broad market rally, which erased more than half of the losses racked up by the S&P 500 index since October 25. The gains came as investors mostly focused on the latest developments in the U.S. presidential race a day before the general election. The FBI announced late Sunday that its review of newly discovered Hillary Clinton emails found no evidence warranting charges. That appeared to ease the market's anxiety, which ratcheted up in recent weeks over signs that the presidential race was tightening, triggering the longest losing streak for the S&P 500 since 1980. Banks and health care companies led a broad market rally. The Dow climbed 371.32 points to 18,259.60. The S&P gained 46.34 points to 2,131.52. The major stock indexes were headed higher from the get-go Monday, moving sharply in premarket trading overnight as investors sized up the latest development in the U.S. presidential race. Clinton appeared to be holding on to an edge in the final stretch leading into Tuesday's general election a day after FBI Director James Comey told lawmakers that a review of new Clinton emails did not change the bureau's recommendation that she should not face charges. Banks and health care companies rose more than the rest of the market. 11 of 11 sectors closed positive with financials +2.31%, health care +2.26%, industrials +2.05%, consumer discretionary +2.05%, tech +1.96%, energy +1.78%, consumer Staples +1.51%, REITs +1.5%, utilities +1.22%, materials +1.22% & telecom +0.55%.

Commodities: Oil traded near $45 a barrel as voters prepare to go to the polls for the U.S. presidential election and before weekly government data forecast to show stockpiles expanded in the world’s biggest crude consumer. Copper retreated from its highest in a year.

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