Weekly research notes covering the full spectrum of asset classes

Market Commentary—4/12/18

December 4, 2018 / Felip Biji

Stocks: Financial markets are up as potential trade talks between USA and China settled, tariffs will not escalate during a 90-day negotiation period. Positive news for the economy, yet it is unlikely to expect an agreement in the near future as major differences between the two parties remained on the table.  

The Dow is up 1.1%, gaining 287.97 points from the previous close. The S&P 500 climbed 1,2%, closing at 2,790.37. That is the strongest opening session for December, percentage-wise since it rallied 2.16% on Dec. 1, 2010. The Nasdaq Composite Index gained 1.5%. Amazon and Apple, the two companies competing for the 1-trillion-valuation crown, rose 4.9% and 3.5%, respectively.

Germany’s DAX was the biggest winner of the trading session, rising 1.9% to 11,465.46, marking its biggest one-day rise since July 26. The Stoxx Europe 600 jumped 1% to end at 361.18.  

Commodities: Oil prices surged after announcements of global production cuts. “Markets are expecting to see a substantial production cut after Russian President Vladimir Putin said his country’s cooperation on oil supplies with Saudi Arabia would continue,” said Hussein Sayed, chief market strategist at brokerage FXTM.

Canada’s Alberta province ordered an unprecedented oil cut plan in order to fight price crisis. It has announced an 8.7 % reduction in oil production, about 325,000 barrels daily, to raise “historically low prices” in the market.

Currencies: A positive relief in the sector as conflicts between USA and China eased. The dollar index was 0.4 percent down. While the euro was 0.2 percent higher against the American currency, trading at 1.1354.

Sterling rises, currently trading at 1.2807 against the dollar, after a top EU court advisor says the UK could cancel Brexit without asking for permission.