Monday, 05 December 2016 11:28 Written by

Weekly Market Review 02.12.2016 by



Weekly Market Summary Dec.2, 2016

The pressure is on both the global market and the US Federal Reserves, particularly on how US President Donald Trump could curb long-term decision plans on US fiscal policies. Trade restrictions are one of Trump’s restrictions, and curbing the outsourcing of jobs to Asian countries could post effects on how the US economy could move forward. Federal concerns also arise as during the campaign, Trump and Chairman Yellen have not been in good terms as to how her office should be run. Yellen is making sure that the central bank’s independence still prevails and that it remains in consonance with its long-term goals despite the appointment of high-level jobs. It is also her stand not to bail out due to pressure from the current presidency with regards to coming up with short-term solutions pertaining to the US economy and fiscal policy.

Stock Market Recap

Slight gains permeate closing prices for Russell 2000 (1,314.25, +0.03%), NASDAQ (5,255.65. +0.09%), S&P (2,191.95, 0.04%) and Dow at 19,170.42, -0.11%. Financial stocks have been the highlight for the week’s trading since they are being bought while technology-based stocks are on a selling streak.
OPEC’s Agreement
A decision has been made by OPEC members to cut 1.2 million barrels a day in production with the condition that non-OPEC members, especially Russia, would cut about 600,000 barrels as well. The said production would start next year on the 1st of January and would last for a 6-month period. Due to that announcement, crude oil gained on the closing week. It closes at 51.57. The agreement within OPEC also led to a value rally on oil because of the Asian market investors’ demand for more production.

US Dollar Global Takedown

Currencies closed positively for the US Dollar. The Euro/USD closed at 1.06, same as last week; the USD/Yen closed at 113.22, up by 2.1%; and the Pound/US closed at 1.25, up by 1.1%. In truth, Trump’s fiscal policies resulted in the US Dollar holding its gain, topping more than a hundred rate. Although it may seem to look good, the investors and businesses funding the country think it is situated, which means value discrepancies. The devaluation of the country’s denomination against the US Dollar would not be good for the company. Not to say that it has no benefit for America itself. Many could recommend its use whenever Americans decide to purchase in that country. You could plan a vacation because of the country’s devalued amount against the US Dollar.
Other Global Market News Recap
Gold closed at 1.184, down by 2%. Despite a modest economic growth for the Eurozone, they still haven’t reached the inflation rate of 0.8% as only 0.6% was reported by the European Union’s Statistic Agency. On the other hand, the Asian market is on a polarizing mix. Japan continues its gaining streak of four weeks despite the US Dollar rate still dwindling down and causing losses for investors who use US dollars. On the other hand, China’s currency has its value dropping, resulting in its sell-out for foreign currency such as the US Dollar.

Actions to be taken

As always suggested, diversify your portfolio. Now could be the best time to look for investments where governing bodies and private sectors could focus on policies and support. Again, do not focus only on a single sector because the effect of Trump’s announcement on policies could still change. Since the market is rallying towards cashing in more values and gains, try to capitalize on this movement. Check small caps because they are the most gainers from this short-term effect adjustments and market volatility. Monitor sectors, companies, and industries that could outperform their past performances. Base it on the effect of approved curbing of oil production, the strengthening of the US dollar, and the global positive outlook on the market. The Fed rate hike is positively likely to conjure, and you can decide better from thereon.

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