Originally published by Rivkin Securities
Markets overnight were largely dominated by president-elect Donald Trump’s first press conference since July. Markets were expecting more details about some of Trump’s plans for fiscal stimulus but were disappointed to find that details were thin. The president-elect talked about Russian hacking allegations, his criticisms of pharmaceutical companies and plans to withdraw from his family business but very little was said regarding many of his other policies. Stock prices were volatile in response to his comments although the size of the moves on the large indices were relatively small. The S&P 500 was down a few points in the middle of the session but staged a rally over the last couple of hours to finish up 0.28%.
Crude Oil rallied sharply, rising 3% to snap a multi-day losing streak despite a large increase in US inventories as well as a jump in US production. At $52.39, crude is still hovering in the $50-$55 range that it has been in since OPEC announced it had agreed to production cuts. The declines over the prior few days came on the back of indications that some member states were overproducing relative to their quota.
Gold prices were extremely volatile overnight dropping $10 early in the session before rallying almost $20 in the space of a couple of hours. Although it retreated from its highs it still closed up 0.61%. Gold has been hit particularly hard in the last few months as markets expect rising inflation, and improving economic data to force the Federal Reserve to continue raising interest rates. Notwithstanding this, in the last couple of weeks gold has been recovering steadily as the decline was probably a little overdone. The price of gold in Australian dollars has recovered to where it was in late November last year.
ASX futures are currently up 12 points suggesting a slightly stronger open this morning. The S&P/ASX 200 has been rallying strongly since the election of Donald Trump, reaching as high as 5,800 earlier this week. This is the highest level since early 2015. If the index can continue to rally to 6,000 it would be the highest point the index has reached since the early stages of the financial crisis in 2008.
Data releases:
· ECB Monetary Policy Meeting Accounts 11:30pm AEDT
· US Import Prices 12:30am AEDT
· FOMC Member Evans speaks 12:30am AEDT
· FOMC Member Harker speaks 12:30am AEDT