Daily Market Analysis – 27.11.2017

Market Summary

Asian markets looked ready for a down day in the morning Friday, with markets all across the region starting the day in the red. Japan’s Nikkei reversed its 0.6% loss in the afternoon as the Yen weakened versus the USD however, and Hong Kong’s Hang Seng continued its winning ways with a solid gain. Mainland China’s Shanghai Composite was 0.5% lower heading into the lunch break, but reversed course in the afternoon to end the day with a slight gain as concerns over new regulations and slowing growth took a back seat to bargain hunting from investors. Australia’s S&P/ASX 200 ended the day with a slight loss, with losses from the big four banks hurting the broader index. Markets in South Korea, New Zealand and Singapore all opened to gains and finished with solid gains as well.

European markets were mixed at the close Friday, with the broadest measure of European equities, the Stoxx Europe 600, falling due to continued strength for the Euro, which rose above the 1.1900 level against the USD for the first time since September. Markets in Germany and France finished higher however, with strong economic data lifting both countries markets. Most notably, the German Ifo Business Climate Index rose to a record high 117.5, indicating growth continues heating up in the European Union’s largest economy. London’s FTSE fell for the second day in a row, with shares of retailers leading the way lower. Investors are worried that the retailers will see a poor holiday shopping season this year, as consumer confidence has been poor recently, and continued worries over the impact of the Brexit are likely to keep it that way.

U.S. markets ended broadly higher in an abbreviated trading session that saw three out of four major indices end at new record closing levels. Both the Nasdaq and S&P500 were at new record highs at the close, as was the small cap Russell 2000 Index. The Dow Industrials were higher for the day, but remain less than 0.5% away from a record high. Shares of retailers took the lead, as investors are expecting good things from this holiday shopping season following data from Adobe Analytics showing online shoppers spent $1.52 billion on Thanksgiving Day. On a weekly basis all three of the major benchmark indices showed gains for the first time in three weeks, with the S&P500 and Dow 0.9% higher and the Nasdaq gaining 1.6% during the four-session trading period.

Today’s Assets

Cryptocurrencies 

The cryptocurrency space continues to see unbelievable gains, with Bitcoin rising above the $9,000 level on Sunday, and other coins in the space remaining at or near all-time highs as well. Ethereum pulled back somewhat over the weekend after touching an all-time high of $475 on Thanksgiving. Ripple and DASH were both flat over the weekend after making strong runs higher this past week, and DASH also remains near an all-time high. Finally, Litecoin also remains near an all-time high as it stalled just shy of the $90 level on Friday, and is trading around the $87 on Sunday. With media attention over the cryptocurrency space increasing, and mainstream adoption looking as if it’s just around the corner we could see a strong rally in this space through the end of the year, and a potential target of $10,000 or higher for Bitcoin.

 EUR/USD 

The pair topped the psychologically important 1.1900 level on Friday after a measure of German business confidence came in much stronger than expected. The strong reading of the German Ifo business conditions survey gave additional support to the Euro, while concerns over low inflation in the U.S. have been weighing on the U.S. dollar. The strong upward momentum in this pair makes it likely we will see a test of the key 1.2000 area for resistance, perhaps as early as today. With no real economic data due from Europe or the U.S. there’s little reason to think that the rally from Friday won’t simply continue as markets reopen this week.

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