Markets Update Friday 06/12/2019 – Happy St. Nicholas Day!

Frankfurt – 06/12/2019

Happy St. Nicholas Day!

The markets are pumping this Friday thanks to very strong US labour market figures. 

With 266,000 new jobs created, the forecast for 187,000 was clearly exceeded. In addition, the previous month’s figure was sharply revised upwards. This speaks for a very robust US economy. Since the development of hourly wages also remained somewhat below expectations, the data exert hardly any pressure on the US Federal Reserve in the direction of a looser monetary policy. The Fed will meet next week.

The mood among US consumers also brightened considerably in December and exceeded expectations. However, the data was overshadowed by the US labour market report. The tiresome trade dispute between the US and China was completely forgotten – at least this Friday.

US Markets at a glance

Before the weekend, investors on Wall Street went on a buying spree. The Dow Jones was friendly throughout the meeting and rose by 1.22 per cent to 28,015.06 points at the end of the session. The NASDAQ Composite also went up. It improved by 1.00 per cent to 8,656.53 points.

The surprisingly strong US labour market report for November was the main contributor to Wall Street prices gaining momentum.

Far East Markets at a glance

At the end of the week, events on the stock markets in Asia were characterised by restraint. The trade dispute between China and the USA continues to be the dominant topic. There are still no signs of a breakthrough. Accordingly, market participants remain hesitant. In Japan, the Nikkei rose by 0.2 per cent to 23,354 points. This means a weekly gain of 0.26 per cent. In Hong Kong, the Hang Seng rose last Friday by 0.8 per cent. The CSI 300 index with the 300 most important stocks on the Chinese mainland stock exchanges gained 0.2 per cent. 

European Markets at a glance

The stock markets in Europe were able to continue to expand their spreads on Friday.

The EuroSTOXX 50 was only moderately up at the start of trading but finally positioned itself clearly in positive territory. It ended the session 1.21 per cent up at 3,692.34 points.

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After the announcement of the US labour market data in the afternoon, the Dax rose significantly and again surpassed the important mark of 13,100 points. At the close of trading today, the leading index gained 0.86 per cent to 13,166.58 points. As a result, the index was able to reduce its loss over the week to only 0.53 per cent. The MDax gained 0.71 per cent to 27,343.84 points.

Forex, gold, oil and crypto

According to US labour market data, the euro has fallen further to its knees and dropped to a daily low of 1.1070 dollars. In early trading, the euro had climbed above 1.11 dollars. The exchange rate fluctuations between the euro and the dollar were small. The European Central Bank (ECB) had set the reference price at 1.1094 dollars on Thursday afternoon.

The renewed cuts in production decided by the Organization of Petroleum Exporting Countries (Opec) and its allies drove oil prices up on Friday. The North Sea variety Brent rose in price by more than two per cent to 64.88 dollars per barrel. The price of WTI grade US light oil climbed by 2.4 per cent to 59.85 dollars. Brent was thus heading for a weekly gain of four per cent and WTI of around eight per cent.

Opec agreed to cut its oil production by a further 500,000 barrels per day (bpd) in the first three months of 2020. Saudi Arabia also wants to cut back its production by a further 400,000 bpd. According to Saudi Arabia, the total capping of the oil cartel and its allies amounts to 2.1 million bpd.

The price of gold took an immediate dive after the strong US labour market data was released. Before the weekend, the price for the precious metal sits at just $1,460 per troy ounce. 

Cryptocurrencies didn’t move much this Friday but were able to remain stable with an overall market capitalisation of approximately $201 billion. One Bitcoin currently costs $7,450, one Ethereum $149 and one XRP $0.2250.

Corporate and world news

Strongest year possible since 1997

The US stock markets have achieved an impressive performance this year. Depending on how December turns out, 2019 could prove to be the most successful year in decades.

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The last month of the year is traditionally strong on US stock markets, as a glance at the stock market history shows. After an already strong 2019, investors are therefore hoping for a continuation of the rally in the US equity market. The prospects for this are not as bad as analysts think.

A Christmas rally, which begins in the last trading days of the year, brings the US stock markets strong profits on average. Should this happen this year, the already clearly positive performance of the markets in 2019 could make it the strongest stock market year since the end of the 1990s, Marketwatch points out.

Meanwhile, a stumbling block for a further rise of the US equity markets could be the trade war, which has accompanied the markets for more than a year. Over the year, investors have repeatedly reacted sensitively to news of possible progress or setbacks in the negotiations between the two largest economies, the USA and China. There has recently been a rapprochement between the two parties, which has increased the likelihood that the $160 billion US special tariffs on Chinese goods announced for 15th December can still be avoided. However, if no agreement is reached by then, turbulence is to be expected on the markets – which could prevent a Christmas rally and even significantly reduce the annual performance of the US stock markets.

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