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Market Commentary—3/12/18

December 3, 2018 / Guney Kaya

Markets immediately reacted to the positive interaction between China and the US. All the global stock indexes began rallying after Trump signaled there will not be any harsh tariffs for a while. Last week was a good week for US markets, and after the boosted optimism in the markets, I believe this week will be as good as last week’s massive gains.

Stocks: Last week, the S&P and NASDAQ Composite closed 0.8 percent up. The Dow Jones Industrial Average also rose 0.8 percent. After the agreement between the US and China, stock markets started today with a rally. Stoxx 600 rose 1.7 percent and Dax 30 went up 2.5 percent in the morning. While FTSE 100 gained 1.1 percent. Asian markets rose even greater, China’s CSI 300 rose 2.8 percent. Hang Seng climbed 2.4 percent. After continuing losses of Asian markets, the rise boosted some confidence to investors.

Bonds: US 10-year Treasury yield climbed to 3.04 percent. German and French 10-year government bonds are slightly up in the day while Italian 10-year bond yields are down.

Currency: The Dollar index was down 0.4 percent in the morning. Currencies started the day without any big movements, being mostly neutral without any significant highlights. The Euro was down 0.7 percent against the Dollar at last week’s close.

Commodities: Oil prices bounced back from constant losses. Brent crude oil jumped 4.5 percent to $62.14. West Texas Intermediate was up 5.4 percent at $53.70. Oil rose after Russia and Saudi Arabia announced that they will continue working together to maintain oil supply. It is expected that OPEC will agree to increase oil prices in the next meeting, with the cooperation of Russia and Saudi’s it seems like global oil supply is stable, although Qatar increased concerns after they announced they are going to leave OPEC.

Metal prices were higher; gold started the day with a rally.

Markets are rebounding, optimism is expanding in the global markets. It seems like there is a good positive trend wave to exploit. Despite the bloody days of the fall, I believe it is a good time to get back on the train.