Weekly Market Review Dec. 26, 2016
Good record gains have been ticking over the trading week, with the Dow Jones nearing its 20,000th mark. Although it can be seen as a week-per-week improvement on the overall stock market, it should be noted that uncertainty still looms over the market as volatility is high. Policies that would be put into place once the Trump administration takes over come January of next year could still play a pivotal role. This could result in a lot of decision-making, which would definitely affect the issues and events on a global market scale. Oil prices still continue to improve over the week.
Accordingly, Asian markets all closed on a low note, with the trading indexes decreasing, compared to last week’s figures. The Chinese yuan still continues its drop against the US dollar while the Chinese Academy of Social Sciences quoted that the next year’s GDP of growth for the country would slow down and reach 6.5% lower than the estimated 6.7% rate of the current year. The said move would be tied to the implemented monetary policies, to further boost the country‘s economy from the impending asset bubbles that are ready to slow down the market. Japan has not changed its current rates, and the monetary policies still remain. It is said that the Japanese yen is suffering from the current exchange rate relative to the USD, as US- based investors are affected directly by the conversion rate it generates. Despite this, the country is still optimistic as it would push to further improve on the economic movement of import. Its export is expected to further recover from the deflation it is currently into.
The European market mostly remains unchanged while many banking regulations are implemented to ease the pressures among other sectors. On other news, Deutsche Bank and Credit Suisse have both settled fines against the US Department of Justice, with USD 7.5 billion and USD 5.3 billion, respectively. The said settlement was due to alleged mortgage-backed securities, which both parties have resolved. It is estimated that 40-45% was paid in upfront cash. The remaining balance would be paid through what they call “consumer relief.” This would lessen the impact for both banks with regards to their capital.
Global Stock Market
The US stocks impressively closed on all positive indexes. Dow Jones falls short on its 20,000 target, closing at 19,933.81 up +0.07%; NASDAQ closed at 5,462.69 (+0.28%) while S&P 500 bowed at 2,263.79 up +0.13%; and the consistently performing Russell 2000 closed at 1,371.51 up +0.65%. On the other hand, the Asian market is on a down, with Nikkei 225 closing at 19,427.67, down -0.09%, and Shanghai Composite at 3,110.15 (-0.94%). European stocks slightly make a figure improvement. Stoxx Europe 600 closed at 359.98, up by a mere 0.04% while UK FTSE 100 closed at 7,068.17, up by only +0.06%.
The Euro/USD closed at 1.0456, with a mere change of 0.0018. On the other hand, the Japanese yen continues to struggle against the USD, closing at 117.32 (-0.22). The GBP/USD exchange posited a slight movement on the rate, closing at 1.2288, with a change of 0.0002.
Crude oil continues its gaining streak, closing at 53.25, posting a +0.57% change. The same goes for gold, closing at 1,135.20, with +0.40% change.
The US market, especially in the case of Dow Jones, aims to reach the 20,000 level. As such, it may act as a happy trigger for investors who may be reliant on the market’s positive performance. However, this is not the case as these indexes among stock groups pertain to the performances of their components. They are not a guarantee of eventual gain in the coming months; rather, they’re a stimulus to be observed and taken into consideration with regards to your investing goals. Yes, the sentiment all over the market would be positive once it reaches the 20 thousand figure, but remember that these figures are only indicators of what you should do. As always, take the necessary steps for the appropriate diversification of your portfolio.