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Shares back up as trade deadline approaches

Global event risk for the remainder of the week is a disincentive to take big risks right now. There are four trading days left for some announcement on the new US tariffs to be imposed on China. It looks like if the US President had to make the decision on new tariffs right now, he would implement them. For that to change before December 15, according to Trump, there needs to be ‘movement’ from China.

The unveiling of two articles of impeachment against Donald Trump by Democrats today only serves to amplify the political uncertainty. We are worried that the timing of impeachment means Trump will feel backed into a corner- and could feel compelled to come out fighting China with new tariffs.

With two full days until election day the FTSE 100 is trading lower for a second day running. Ashtead Group is leading the declines after half-year results. The results were good and dividends are rising but there are question marks over future strategy. All Ashtead’s growth has come from the US, so we’d like to see it double down there instead of re-focusing efforts on a lacklustre UK market.

The vulnerabilities of German exports to the US, China and the UK are exposed today and traders are shying away from companies listed on the DAX. The index has dropped below 13k as risks surrounding the tariffs and election mount. The Dax is lower (-0.4%) over the last 5-days, which compares particularly unfavourably with the S&P 500 is which is positive (0.7%).

The S&P 500 is backing off from a fresh-approach at record highs for a second day. Traders are taking a little risk off the table before the FOMC tomorrow.

EURUSD is the pair to watch with the Fed and ECB on tap this week. The euro got a little boost before German ZEW data which showed an improvement in economic Sentiment in December.

GBPUSD remains in a tight-locked range around 1.315 with Sterling bulls taking a rest before the Fed meeting and UK election.

Crude oil is flat ahead of API US inventories later but remains on a generally upward track in the wake of the OPEC decision to reduce output. Another inventories drawdown is expected and that supports the tighter supply picture sought by OPEC and its allies.

The potential for fallout from the Fed meeting has meant gold has seen little haven demand from a potentially risky week. The Fed predicting unchanged rates for the foreseeable future doesn’t do much for gold either way and explains the flat price performance over the last 5-days.

27-1-2020

Shares smashed, Gold jumps as coronavirus spread intensifies
According to Chinese health officials there are 2,744 coronavirus cases and 80 deaths- and it has been confirmed the virus can spread before symptoms become visible. EQUITIES European stocks are headed for a sharply lower open on Monday. Fears are growing at… Read more

24-1-2020

Markets cheery and central bankers dreary…
EQUITIES Shares in Europe look set for a strong start to trading on Friday morning. The World Health Organisation not designating the Wuhan coronavirus an international emergency has taken the fear gauge down a few notches. The travel restrictions and cutback… Read more

23-1-2020

Risk aversion back on coronavirus & US-EU Trade. ECB up next
EQUITIES Risk aversion has taken hold across Asian markets with the sad and worrying news of more deaths due to the coronavirus in China. Official reports now indicate nearly 600 cases and Macau has cancelled Lunar New Year celebrations after a second case of… Read more

22-1-2020

DAX record high, Tesla $100B & markets brush off pandemic
EQUITIES Blowout fourth quarter earnings and subscriber growth at Netflix has refocused investors’ attention on market fundamentals. Market sentiment had been impaired by worries about the new coronavirus out of China, which has now spread to the United State… Read more

20-1-2020

Oil prices spike on Libya pipeline closure, Europe to open higher
EQUITIES European shares are set to open higher on Monday in what may be a more muted day of trading with Wall Street closed for Martin Luther King Jr. Day. Trading in Asia was light with US investors on holiday today and Chinese New Year celebrations set to b… Read more

17-1-2020

S&P 500 tops 3,300 as Alphabet reaches $1 trillion
EQUITIES European shares look set to open higher on Friday bolstered by stats showing stable economic growth in China and another record-breaking session on Wall Street that saw the S&P500 top 3,300 for the first time. Mining companies are likely to featur… Read more

16-1-2020

Europe to open higher & Sterling recovers
Shares in Europe and on Wall Street are set for a higher open on Thursday after a positive session in Asia.   Wall Street notched up new records and finished the day higher after the signing of the phase one US China trade deal. That the S&P 500 and Nasdaq… Read more

15-1-2020

Stocks, oil lower as Tariffs stay in place, Persimmon, Goldman Sachs, Saunders, UK CPI
European shares are lower on Wednesday after a down session in Asia while LCG pricing points to a lower start on Wall Street. US Treasury Secretary Steve Mnuchin confirmed that tariffs against China will remain until November, after the US election. The tariff… Read more