Daily Market Analysis – 23.11.2017

Market Summary

Asian markets gained broadly on Wednesday as investors took their cues from the strong overnight gains seen in the U.S., where major equity indices hit new record highs overnight. The technology sector was the leader for the session, but the financials did well in many countries also. Hong Kong’s Hang Seng had the best performance in the region, and hit a ten-year high as it traded above the 30,000 level for the first time since 2007. It was the fourth consecutive winning session for the Hang Seng, which remains among the best performing global markets of 2017 as it has gained more than 36% this year. Japan, South Korea and Taiwan all posted moderate gains as they all have significant tech industry. Australia’s S&P/ASX 200 gained as well on the back of rising commodity prices, especially iron ore.

European markets were broadly lower Wednesday, with a stronger Euro and concerns over the political turmoil in Germany continuing to dominate investor sentiment. In fact, Germany’s DAX was by far the biggest loser of the session, falling by 1.2% as it took pressure from the political situation, and the exporter heavy index was further pressured by the strong Euro. Markets across the rest of the European Union found themselves falling as well, with some weakness from U.S. markets doing nothing to help the matter. London’s FTSE was the outperforming market of the region, gaining a slight 0.1% as gains from oil & gas and mining companies helped offset losses from British home builders. The home builders came under intense pressure after it was learned that the British government would be launching an investigation into so-called landbanking, and if the practice is found to be widespread the home builders could see the government stepping in to buy land that they own at reduced prices, thus weighing on their balance sheets.

U.S. markets began the day on good footing, but soon stumbled after economic data showed durable goods orders unexpectedly fell 1.2% in October versus expectations for a 0.7% rise. It was a light volume day in the U.S. markets as droves of investors had already left ahead of the Thursday Thanksgiving holiday in the U.S. The technology heavy Nasdaq managed to pull out a slight gain, leaving it at a new record closing high. The small cap Russell 2000 outperformed for most of the day, but fell late in the session after the latest Federal Reserve monetary policy meeting minutes were released, showing the Fed worried about low inflation, and indicating interest rate hikes could be less frequent than expected in 2018.

Today’s Assets

Cryptocurrencies 

With Bitcoin continuing higher on Wednesday, most of the other coins in the cryptocurrency space followed suit. With the exception of Lisk, all the top ten coins were higher for the day, with DASH and Monero putting in especially impressive results as they both gained nearly 20%. DASH has been extremely strong this week, crashing through $500 on Tuesday and nearly reaching $600 on Wednesday. One has to wonder if the gains will continue, or if DASH will see an equally spectacular drop as traders take profits and rotate capital into a different cryptocurrency.

GBP/USD 

The pair continued trending higher on Wednesday, rising for a seventh consecutive session and smashing through the resistance at the 1.3300 level. With that resistance broken, the pair is free to range up to the 1.3600 level, which was the most recent highs set in September. With the Brexit negotiations looking as if they will resume, and the U.S. dollar suffering from potentially slower interest rate hikes in 2018, a move to that 1.3600 handle seems fairly likely, although there could be some pullbacks on profit taking on the way up.

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