FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%

Stocks set for more record highs


8 January 2021

So much for a slow start to the new year. From a pair of tense Senate runoffs, to a mob breaching Capitol Hill, and even a shock supply cut from Saudi Arabia, global investors have had plenty to take in this week. Yet, the buying momentum in stocks has shown its resilience.

After overcoming the slight wobble on Monday, US equity benchmarks have since posted new record highs on Thursday, with futures contracts still in the green at the time of writing. The MSCI ACWI index, which measures the overall performance of stocks across emerging and developed markets, also registered its highest ever close yesterday. Asian equity benchmarks are climbing on Friday, with the MSCI Asia Pacific index advancing some two percent already so far this year.

Reasons aplenty to look up


Stock market bulls have many reasons to expect further gains. Investors are getting more comfortable wading further out into risk-on waters, considering that the spillover from 2020’s downside risks have abated, be they Brexit concerns, or the US election cycle (with outgoing US President Donald Trump finally stating his intent for a smooth transition).

Now, investors are gravitating towards the increased likelihood of more incoming US fiscal stimulus in light of the Democrats’ sweep of the Georgia Senate runoffs. The latest FOMC meeting minutes underscore policymakers’ will to hold fast to its supportive stance. The Covid-19 vaccine continues its global rollout, with Moderna’s vaccine receiving the EU’s blessing this week.

Such elements are fostering a highly supportive environment for global equities, affording investors the luxury of looking past the persistent pandemic woes.

Dollar bears likely unfazed by US hiring slowdown


Fundamentally-driven investors will be focusing on the US non-farm payrolls release later today, amid expectations for a mere increase of 50,000 jobs in December. Such figures would be a far cry from the millions of jobs that were restored in the months after the initial national lockdown was ended. A December NFP print of 50,000 would also be a mere one-fifth of the jobs added in the month prior, signaling that the post-lockdown recovery is stalling.

Still, the dissemination of more fiscal stimulus under the incoming Biden administration should help tide the US economy over. After all, the president-elect did vow this week to mail out those US$2,000 checks would be sent out “immediately” if Democrats won the Georgia Senate runoffs, which they did.

With such expectations intact, the Dollar index may not have much legs left in its recent rebound.

Gold supported by hopes of faster US inflation


10-year Treasury yields breaching the psychologically-important one percent mark this week, along with the Dollar’s rebound, have dealt a slight setback to Gold prices. Yet, the precious metal is still trading above the psychologically-important $1900 level, and remains on course for a sixth straight weekly gain.

Bullion remains supported by the reflation trade, amid expectations that Democrats’ control of the White House, Senate, and the House should pave the way for more incoming fiscal stimulus that can drive up US inflationary pressures.

However, should December’s non-farm payrolls report later today offer more evidence of a stalling US jobs market, that may dampen Gold prices in the immediate aftermath, while waiting for more inflationary boosters to come through. The Fed’s conveyed tolerance for an inflation overshoot also bodes well for the precious metal’s upside.

Spot Gold still harbours the potential to reclaim the $2000 handle, especially if the precious metal’s tailwinds can gather pace as 2021 unfolds.

Still, as commented by Fed officials this week, there appears to be a risk of a pullback in the Fed’s asset purchasing programme should a US economic outperformance crystalize in the latter part of the year. Another massive yields spike may then trigger the further unwinding of Gold’s recent gains.

#source

Related

Dollar starts Fed week on front foot, stocks hit by Evergrande fallout
Dollar starts Fed week on front foot, stocks hit by Evergrande fallout

Fears of global contagion from the worsening crisis in China's property sector continued to weigh heavily on sentiment at the start of trading on Monday as markets...

20 Sep 2021

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Sentiment sours as the S&P 500 tests key support
Sentiment sours as the S&P 500 tests key support

We head to quadruple witching in the US on Friday and notably options expiration (OPEX), and the weakness we see time and again in the week before seems...

15 Sep 2021

Dollar unscathed by soft inflation, equities resume slide
Dollar unscathed by soft inflation, equities resume slide

Dollar takes little damage despite signs US inflation has peaked - Wall Street resumes selloff - all eyes on China contagion risks - Canadian data coming up ahead of elections, gold wakes up...

15 Sep 2021


Forex Forecasts

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.