Asia stocks retreated as the month comes to an end, with declines in Hong Kong weighing on the region. Treasury yields were steady. Shares reversed earlier gains in Tokyo, fluctuated in Sydney and dropped in Shanghai. Hong Kong and Seoul saw the biggest declines, while U.S. Futures were under pressure and the US Dollar was steady. American equity and bond markets were shut Thursday for Thanksgiving. The won was little changed after the Bank of Korea kept its policy rate unchanged, as expected. Investors continue to wait for progress on a U.S.-China trade deal, with the next batch of American tariffs on Chinese goods due to begin Dec. 15. This week, China has said it will retaliate against a U.S. bill in support of Hong Kong protesters, though stopped short of offering any details. Elsewhere, Oil eased back toward $58 a barrel in New York. The Chilean Peso set a record low for a second day and the central bank said it will directly intervene.
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For anyone following my Platinum Service it made 37 points yesterday and is now ahead by 718 points for November, having made 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Markets are on a sort of ‘wait and hold’ in terms of that phase-one trade deal. If there is a skinny deal, that will allow markets and risk assets to grind higher even if there is no real prospect of a phase two or subsequent detailed negotiation occurring this side of U.S. Presidential elections.
The MSCI Asia Pacific Index fell 0.7% in Tokyo.
Japan’s Topix index fell 0.2%.
South Korea’s Kospi slid 1.3%.
The Shanghai Composite fell 0.6%.
Hong Kong’s Hang Sang dropped 2%.
Futures on the S&P 500 Index remained about 0.3% lower.
Euro Stoxx 50 futures slipped 0.1%.
The yield on 10-year Treasuries ticked higher to 1.77% as trading began following the Thanksgiving break.
Germany’s 10 -Year yield rose one basis point to -0.36%.
Here is a summary of the main Changes in F.X. Markets:
The Japanese Yen was steady at 109.48 per dollar.
The offshore Yuan remained at 7.0325 per dollar.
The Euro bought $1.1011, little changed.
The Pound is also opening unchanged at $1.2920.
West Texas Intermediate crude held at $58.03 a barrel.
Gold was at $1,457.81 an ounce, little changed.
This morning on the Economic Front we already had the release of German Retail Sales which were awful coming in with a drop of -1.9% versus +0.2% expected. At 8.55 am we have German Unemployment, followed by UK Money Supply, Consumer Credit, Mortgage Approvals and Net Lending To Individuals at 9.30 am. Finally, we have Euro-Zone CPI at 10.00 am and a speech from ECB Member De Guindos at 5.30 pm. As the U.S Markets are only open for a half-session there is no U.S data due today.
December S&P 500
Shortly after I posted yesterday morning the S&P traded lower to my 3143 T/P level on my latest 3146 short position and I am now flat. One interesting research came across my desk yesterday which again shows why I am so nervous of a strong pull-back in the market. If an investor is looking for value opportunities in today’s markets, you may want to take a cue from Warren Buffet, CEO of Berkshire Hathaway. Buffet is considered the king of value investing, and his company is sitting on $128 billion in cash, which he has in short-term T-Bills. Buffet has been adding to his cash war-chest for close to a decade. The company’s pile of cash is so big, there is enough money to buy all but the 50 largest public companies in the U.S. But the father of value investing clearly does not see many good bargains in today’s markets. The S&P has left a ‘’Gap’’ at 3153 from Wednesday’s close and today I will be a seller from 3153/3168 with a 3175 stop. I still do not want to be long the market at this time.
I am still flat the Euro and today I will raise my buy level to 1.0950/1.0990 with a higher 1.0915 stop. I still do not want to be short the Euro at this time.
December Dollar Index
With the U.S. Markets only re-opening for a half-session today it is little wonder that we have little or no volatility. I am still flat the Dollar as I continue to be a seller from 98.40/98.80 with a 99.15 stop.
The DAX is selling off as I go to press which is no surprise given the near 2% fall in German Retail Sales. I am still flat and I will lower my buy level to 13040/13110 with a 12990 stop. Ahead of the weekend I still do not want to be short the market at this time.
The FTSE again just missed my sell level and I am still flat. The market is overbought and today I will lower my sell level to 7420/7460 with a 7505 stop. Given the strength of Sterling I do not want to be a buyer of the market at this time.
Dow Rolling Contract
Although the Dow is only open for a half-day, traditionally the day after Thanksgiving tends to be a positive one for the US Indices. This morning the Dow is trading 100 points lower than Wednesday’s close and I would expect some if not all of the ‘’Gap’’ will be filled later. I am not going to play for this move higher given my concerns about how overvalued the stock market is and I will leave my 28180/28330 sell level unchanged with the same 28405 stop.
No Change as I am still short from early Wednesday morning at 8415 with the same 8465 stop. I will leave my T/P level unchanged at 8405 and if any of the above levels are filled I will be back with an update for my Platinum Members.
The BUND traded lower to my 171.15 buy level. As I did not want to hold a position overnight I covered this position at my revised 171.22 T/P level and I am now flat. This morning the Bund is trading unchanged and I will again look to buy the market on any dip lower to 170.40/170.80 with a 169.95 stop.
Gold Rolling Contract
No Change as I am still a buyer on any dip lower to 1438/1446 with the same 1431 stop.
Silver Rolling Contract
I am still flat Silver and today I will raise my buy level to 16.50/16.90 with a 16.15 stop.