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Index Close To New 11 Month High

20 Nov 2016

Asia: Quiet start to Thanksgiving Week in a data light week with Asian indices slightly squeezing higher as EEM outflows halt. On Friday US stocks, slightly lower with DXY 101.39 surge continuing hitting a 13-year. US 10y yields new high at 2.35% but Financials not following through. Apparels were weak with GAP -17%, Abercrombie -14% and LULU -5% as consumers go Mobile and Black Friday now a 2-week process. TED spread rebound continues. Energy in focus this week as OPEC pre-meeting start ahead of formal meeting Nov 30th. Equity volumes slide -20%. This week Wednesday's UK Chancellor's Autumn statement and later FED minutes. Oswald Grubel says Central Banks actions will end in a crash. Merkel to run for a 4th term. Nikkei +0.5% with USDJPY just off 111.0 highs.. Shanghai +0.6% and Insurance sector strong on rising yields. Index close to new 11 month high as Investors barred from Property and Commodity speculation turn to Equities. Conglomerates +1% on several insider purchases. Abercrombie flagship store in HK to close to be replaced by Victoria Secrets at half the rent. US Apparel weakness flashes warning for Yue Yuen and Stella. Taiwan foreign outflows continue but Index +0.3% steadies, Insurance again leads. Korea, flat, with talk China clampdown on Korean music, movies and entertainment hurts Retail. Pres Park under more pressure. Currencies a little stronger. Gold $1212 and Oil $46.00 +1%. Best Sectors Insurance, Autos and Macau. Worst Sectors Retail, Telcom and Utilities.

U.S Equities:   U.S. stocks retreated from near record levels to close lower as the dollar continued to charge higher, with the dollar index trading at a 13-year high. Investors taking profits on the recent rally also pressured major indexes. The stock market opened higher, with the Nasdaq Composite notching an intraday record, but failed to defend its gains. Still, key indexes rose for a second week in a row and the Russell 2000 RUT, +0.47%  logged its 11th straight daily advance. The index has hit a series of records of late, as investors increasingly favor small-cap stocks. The market has been steadily rising all month but the uptrend accelerated after the unexpected election of Donald Trump. Many investors think that Trump’s policy proposals including massive cuts to corporate tax rates and financial and environmental deregulation, will spur growth, inflation and higher interest rates. More than half the S&P 500’s postelection gains have come from the financial sector. The Dow fell -0.19% to close at 18,867.93, while the S&P 500 fell -0.24% dropped to end at 2,181.90. The Nasdaq shed -0.23% to finish at 5,321.51 after hitting an intraday record of 5,346.60 during the session.  Investors are watching the U.S. dollar, which has seen the ICE Dollar index DXY, -0.11%  hit its highest level since 2003, according to FactSet data. A stronger dollar can erode the profitability of large-cap companies, who depend more on exports, which is one reason why investors have been moving to small-cap stocks since the election. The index rose 0.4% on Friday, a move that comes after Federal Reserve Chairwoman Janet Yellen signaled Thursday that a December interest-rate hike was likely to go ahead.

Commodities: Nickel rallied from the lowest level in two weeks as industrial metals resumed their advance after the biggest weekly decline since August. The metal added as much as 2.3% to $11,095 a metric ton on the LME before trading at $11,070.  Copper rose 1.3% as money managers boosted their bets for further price gains on the Comex to the highest ever.
Gold advanced from the lowest level in more than five months as a technical indicator signaled the metal was oversold after holdings in exchange-traded funds saw the biggest weekly outflow since 2013. Silver rose after nearing a bear market. 

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