Asian markets struggle to build on momentum

Tuesday, November 19, 2013

US markets reached fresh highs during yesterday’s trading session before pulling back slightly as investors tempered their mood. The S&P 500 reached a record intraday high as it traded briefly above 1,800 despite the lack of major economic catalysts as the bullish mood from the previous week carried over into Monday’s session. The DJIA managed to add 0.1% throughout the session, setting a new record at 16,030 before closing just below 16,000. Investors will be holding out for the all-important weekly jobless claims, due out this Thursday which will fuel further speculation on the potential timeframe for tapering.  

Asian stocks struggled to build on the previous sessions momentum as major indices capped gains ahead of scheduled talks from Fed officials later today prompted investors into a brief round of profit taking. Mixed signals from various Fed officials will leave investors side-lined for the meantime as the recent optimism which supported Asian markets higher on Monday begins to wane.

Goldman Sachs is likely to press forward with discussions to sell its metals warehousing business after receiving significant interest from a number of parties, according to the Financial Times. The Fed last month announced a review of banks physical commodity operations and with new rules announced by the LME which have made it easier to value warehouse units any subsequent sale of the Metro International Trade Services Business could pave the way for other banks to dispose of physical commodity assets and infrastructure.

Gold prices shed 1.5% yesterday as once bullish investors closed out positions on the anticipation that Janet Yellen will continue with economic stimulus when confirmed as Fed chairman. Prices have slumped 5.5% since the start of the month with gold prices heading for their first annual loss since 2000 as investors lose faith in the metal as a perceived safe haven and ride the equity rally.

Investors will struggle with direction today as they hold out for Octobers FOMC meeting minutes, expected tomorrow, which will reveal further details over the decision to leave QE unchanged. Analysts polled in a Bloomberg survey expect the FOMC will wait until the March meeting to begin tapering.

SPX reaches record intraday highs, but struggles to close higher 

SPX Index SP 500 Index 2013 11 19 08 09 30

DJI pushes above 16,000 but unable to hold onto this level

DJI Index Dow Jones Industrial 2013 11 19 08 10 29

Events for today: Tuesday, 19 November 2013

1000

EZ

Sep

Construction Output

1000

DE

Nov

ZEW Index

1330

US

Q3

Employment


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More from: Kash Kamal