US stock market rally suspended - 16.12.2016

US stocks stopped setting new record highs

US stock market rally suspended but indices are still hovering near their record highs on Thursday as investors considered results of Fed meeting as positive for the US economy. Still, there are concerns that rally may have been too strong for such a short period of time and that markets are overbought. Dow index lacks just 100 points to reach the level of 20’000 while S&P 500 advanced more than 5% in recent 5 weeks. US dollar index, a measure of a greenback’s value against a basket of six major currencies, added 1.3% having previously touched the 14-year high of 103.56. S&P 500 index added 0.55% to 2,265.78 with 10 out of 11 its main sectors finishing higher and financial index leading the advance. Dow Jones industrial average gained also 0.55% to 2,265.78. Nasdaq composite climbed 0.62% to 5,470.50. Banking sector was advancing with JPMorgan, Wells Fargo and Bank of America stocks up 1.5-2.5% on Thursday. Goldman Sachs climbed 4.3% which pushed Dow index up. On the other hand, Yahoo stocks lost 4.8% to $38.95 after it disclosed a massive data breach raising concerns it may be acquired by Verizon. Speaking of economic data, housing starts and building permits for November fell short of expectations today.

European stocks close to 2016 highs

European stocks were wobbling near 2016-highs today with drug maker stocks performing the best. STOXX EUROPE 600 fell less than 1 point to 358.64. Healthcare, energy, telecom and technology sectors were advancing but offset by weak performance of consumer, utility, basic materials, industrial and financial stocks. The benchmark advanced 0.7% this week. Speaking of individual indices, German DAX30 added 0.30% and French CAC40 rose 0.29%. UK’s FTSE 100 index climbed 0.14%. EURUSD strengthened 0.34% trading above the 1.04 psychological level. Economic data came out positive today in Europe: consumer price index for November was in line with expectations.

Asian stocks mostly fell in the aftermath of the Fed meeting

Asian stocks were mixed on Friday after the unexpected news that US Fed may hike the rates 3 times in the coming year. Nikkei advanced 0.7% to 19,401.15 on Friday in its 9-day winning streak, longest since May. The benchmark closed the week 2.1% higher. Broader Topix added 0.5% to 1,550.67. USDJPY stood little changed at 118.145 having soared to a 10-month high of 118.660 a day before. Hong Kong stocks dropped to a 4-1/2-month low on Friday on the news Fed make hike the rates 3 times in 2017. They showed the record weekly decline in 6 month. Hang Seng index slid 0.2% to 22,020.75 on Friday while China Enterprises Index fell 0.1% to 9,470.33. Concerns eased on Friday but investors remained cautious as strong US dollar may deprive emerging currencies of some of their appeal. Telecommunications and raw materials were among the bottom performers. Australian shares closed at their weekly low on Friday as rising US dollar weighed on metal miners and oil sector. The S&P/ASX index lost 0.1% to 5,532.9, having lost 0.5% in a week. Gold sector was worst hit with Resolute Mining Ltd stocks having lost 10%. Energy sector declined on sliding oil prices.

Oil advanced again on prospects of production cuts

Oil futures prices were on the rise in anticipation that Kuwait may cut supplies more than expected as oil producers are aiming at offsetting negative effects of stronger US dollar. Brent crude futures added 0.5% to $54.28 a barrel today in the morning.

Gold in the doldrums on even stronger US dollar

Gold continued slipping in the morning on Friday as US dollar climbed to fresh highs. Spot gold was close to 10-1/2-month low of $1,122.35 an ounce, platinum fell to $885 an ounce while silver dropped to the lowest since June. Stronger US dollar, rising yields and equities and risk-prone sentiments are all bearish factors for precious metals. Later in the day US gold futures advanced 0.6% to $1,136.40 an ounce.