Weekly Market Forecast 26.12.2016

The market would be closed this coming Monday for the holidays, but the Trump effect could already be seen on the US stock market’s performance in the trading market over the past eight weeks. Currently, Dow Jones, mostly composed of large cap stocks, could be pushing to the 20,000th level in the coming weeks. However, with the holidays coming up, trading would be a little slower. As such, the 20 thousand figure would likely not be reached. Nevertheless, it is best to decide on how to play the cards on the US stock market movement when Donald Trump assumes the presidency this coming January. The positive sentiment could still be outweighed by the global reaction to the policies Trump would be implementing. Multinational investors would still be wary of the US Dollar’s effect on most foreign currencies, with a direct effect on the country’s deflation and strength against the USD.

As a year-ender preparation for a better outlook in the coming year, investors should still be cautious. It is true that the pro-economic policies to be implemented by the incoming administration include tax-rate cuts and infrastructure focus among others. However, the probability of resistance to these policies could still wager an effect on the stocks’ performance, depending on how the general public would react to it.

The global market should also take a close look at the US market’s effect. The outlook of the policies would veer less toward globalization but more on the national stimulus. The US dollar is seen to perform well at the expense of reliant currencies, with US investors on the respective country of operation. The Asian market is still on the verge of pressure against the USD. It is seen to be a quiet year-end in the Asian market. Many measures have been implemented by both the Japanese and Chinese governments to improve their monetary policies against the disparity in USD strength and its economic effect.

Oil prices are seen to continue its gaining streak for the coming weeks, benefiting from the upcoming cut in oil production starting next month. Gold and silver, along with other precious metals, still remain bullish until the coming weeks, which add to the effect of the rising inflation rate.

Here’s a look at the events that would transpire in the coming trading week.

EUR/USD – the coming holidays would be slow and light for trading between the two currencies. Although year-end figures would bring adjustments to the closing amount, it would still be a wise decision to consider waiting until next year. This would make for a fully-decided move by means of a better examination based on how the currencies outlook would look like,

Monday: December 26; Report for the Japanese Inflation and Unemployment figures for the month of November would be released. It is forecasted that a 0.2% down rate for inflation would be presented, as compared to the 0.1% increase last October. Unemployment data is forecasted to still remain at 3%.

Tuesday: December 27; Japan’s report for industrial production and retail sales are at a mix. Industrial production is seen to hike at 0.44% against a 1.4% decline in October. On the other hand, the retail sales report would strike down a 0.1% fall rate last October, further sliding by 0.9% in November. The US Consumer Confidence for December would be released against the November figure of 107.1.

Wednesday: December 28; The Pending Home Sales for the US, covering the month of November, would be released with a forecasted figure increasing by 1.62%, topping the 1.8% increase last October.

Thursday: December 29; The US Unemployment claims is forecasted to decrease further to the 271,000 figure against a 274,000 report from November. Oil inventories are also forecasted to strike low by 300,000 barrels from the 2.25 million last week.

Friday: December 30; PMI reports for the US would be released with a forecasted figure of 52.3 for December against the 57.6 last November.