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31
December 2018
 |
financial markets (The Total Investment & Insurance Solutions)
Stock markets turned higher Monday on the last day of a volatile year,
after U.S. President Donald Trump tweeted over the weekend that he expected to
resolve trade friction with China after speaking with Chinese President Xi
Jinping.
KEEPING SCORE: In Europe, the CAC 40 of
France rose 1 percent to 4,723 and Britain's FTSE 100 was up 0.2 percent at
6,747. Hong Kong's Hang Seng advanced 1.3 percent to 25,485.70, while India's
Sensex gained 0.2 percent to 36,129.27. Australia's S&P ASX/200's benchmark
slipped 0.1 percent to 5,646.40. Most other markets were closed for the New Year
holiday. The future contract for the Dow Jones industrial average gained 0.9
percent to 23,244 and that for the S&P 500 also jumped 0.8 percent, to
2,506.00.
VOLATILITY: Trading has been highly volatile
in December, capping a year of turbulence for markets. The major U.S. stock
indexes closed last week with their first weekly gain in what's been an
otherwise painful month. The Dow Jones Industrial Average and S&P 500 rose
more than 2 percent for the week, while the Nasdaq added nearly 4 percent. The
indexes are still all down around 10 percent for the month and on track for
their worst December since 1931.
TRUMP TRADE: Investor sentiment was supported
by Trump's tweet on Sunday saying he had a "long and very good call"
with Xi. "Deal is moving along very well. If made, it will be very
comprehensive, covering all subjects, areas and points of dispute. Big progress
being made." Meanwhile, the official Xinhua News Agency cited a Chinese
Foreign Ministry spokesman as saying that "China stands ready to work with
the United States to move forward the China-U.S. ties which are underpinned by
coordination, cooperation and stability." Prospects for an agreement to
forestall more U.S. penalty tariffs on Chinese exports remain uncertain,
analysts say. The Total Investment
& Insurance Solutions
ANALYST'S VIEWPOINT: "Whilst President
Trump has lauded 'big progress' in trade talks with China following a phone
call with Xi during the weekend, it remains to be seen how much this can boost
investor confidence given that market reaction on recent positive development
has largely been muted," Mizuho Bank said in a markets commentary. It
added that the market was likely to "stay put at this point and wait for
further solid evidence" following expected meetings in January. The Total Investment & Insurance
Solutions
CHINA MANUFACTURING: Factory activity
weakened further in December, an official survey showed Monday, boosting
pressure on Beijing to reverse an economic slowdown as it heads into trade
talks with Washington. The purchasing managers' index of the National Bureau of
Statistics and an industry group, the China Federation of Logistics and
Purchasing, fell to 49.4 from November's 50.0 on a 100-point scale on which
numbers below 50 show activity contracting.
ENERGY: Benchmark U.S. crude oil gained 46
cents to $45.79 per barrel in electronic trading on the New York Mercantile
Exchange. It advanced 72 cents on Friday. Brent crude, the benchmark for
international prices, gained 69 cents to $53.90 per barrel. The Total Investment & Insurance
Solutions
CURRENCIES: The dollar dipped to 110.04 yen
from 110.28 yen last Friday. The euro rose slightly to $1.1451 from $1.1442.The Total Investment & Insurance
Solutions
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