Archives of “December 2019” month

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Fitch Ratings affirms UK at ‘AA’ – highly likely UK leaves EU with an agreement on Jan 31 2020

  
  Analysis

Fitch says given the election result it means the UK is highly likely to bbb Brexit on January 31 next year.

  • Rating AA
  • Outlook negative on view that uncertainty regarding the future UK-EU relationship will persist for some time
Cable is ambling along not too far from its US session low
More from the rating agency:
  • UK election outcome has significantly reduced the very near term risk of a no deal Brexit
  • large degree of uncertainty on fiscal outlook
  • fiscal loosening likely, extent uncertain

S&P issues revised outlook for UK, to stable. Ratings affirmed.

  
  Analysis

S&P says UK outlook revised to stable; ‘AA/A-1+’ ratings affirmed

  • UK’s conservative’s newfound majority should clear passage of withdrawal agreement bill through parliament, diminishing risk of no-deal Brexit
  • expect that the UK will ultimately seek an extension to the transition period beyond December 2020
  • also revised to stable from negative outlook on the long-term rating on the BOE

BJ says he’ll take the UK out deal or no deal, and no extension. At odds with what S&P expect

Trump sends letter to Pelosi criticizing impeachment process

  
  Analysis
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Letter from Pres. Trump to Speaker of the House Pelosi

The White House letter to Pelosi
  • Impeachment process cheapened
  • McConnell will decide on impeachment witness issue
  • He’ll let Senate decide when to vote on US MCA
  • Abuse of power charges completely baseless

You can read the full 6 page letter here

Major indices close at record levels again

  
Analysis, US Market

Small/modest gains on the day for the major indices

The major indices are all closing higher which means new record highs for each of them.

The NASDAQ and S&P have now closed at new all time highs for 4 consecutive trading days. The Dow has closed at record highs for 2 consecutive days.
The final numbers are showing:
  • S&P index eked out a is 0.76 point gain or 0.02% at 3192.21
  • NASDAQ index rose 9.131 points or 0.10% at 8823.35
  • Dow industrial average rose 29.3 points or 0.10% at 28265.19

European shares end the day with mixed results

  
Analysis, Global Indices

German DAX -0.9%. UK’s FTSE near unchanged. Italy’s FTSE MIB +0.4%
The major European shares are ending the day with mixed results:

The provisional closes are showing:
German DAX, -0.9%
France CAC, -0.4%
UK’s FTSE 100, unchanged
Spain’s Ibex, -1.1%
Italy’s FTSE MIB, +0.4%
In the European 10 year note sector, the benchmark yields are lower with the UK 10 year leading the way to the downside at -5.8 basis points. France’s 10 year is trading just above the 0.0% level.

German DAX -0.9%. UK’s FTSE near unchanged. Italy’s FTSE MIB +0.4%_
In other markets:

Spot gold is little changed at $1476.40, plus $0.22
WTI crude oil futures are up $0.74 or 1.23% at $60.95
In the US stock market the Dow has turned back positive as Boeing has recovered from earlier losses and is trading up on the day.

Boeing has the largest weighting in the Dow at 7.85%. As a result, it can have a material impact on the fortunes of the index. Boeing shares are up 0.78% currently. Although Boeing shares are higher the European supplier shares are sharply lower in trading today.

S&P index is up 1.32 points or 0.04% at 3192.84
NASDAQ index trading down -2.7 points or -0.03% at 8811.34
The Dow is up 38 points or 0.13% at 28274.
In the US debt market, the yields are mixed with the shorter and lower and the longer and higher (the yield curve steepening)

US yields are mixed with the yield curve steepening
In the forex market, the CHF is the strongest of the majors, while the GBP remains the weakest. The GBP has extended its decline to the downside against the major currencies since the start of the New York session.

EUR/USD and the importance of 1.12

  
Analysis, Forex

A technical analysis note via Bank of America / Merrill Lynch on the euro against the US dollar

Commentary on the weekly chart.
A technical analysis note via Bank of America / Merrill Lynch on the euro against the US dollar
  • The downtrend in EUR/USD since the head and shoulders top pattern formed in 2018 remains the path of least resistance. 
  • So too does the bearish channel and resistance lines that have guided it lower. 
  • While price remains within this bearish channel we think the bottom of the channel and/or gap from the April 2017 French Election can be tested/filled. It is also possible the full head and shoulders target of 1.0596 is reached 
More:
  • A rally a weekly close through resistances at about 1.12 would be viewed as a trend changing technical break out for a rally to the 200wk SMA at 1.1358 and 1.1520 (38.2% retracement of 2018s decline)

Moody’s says global manufacturing outlook for 2020 is negative

  
Analysis, Economy
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Moody’s on the manufacturing outlook

  • Most manufacturign sectors will likely experience only modest profit growth or even slight declines in 2020
  • Agricultural, transportation and utilities end markets exhibit weak growth prospects
  • Aerospace and defense segment has strong growth prospects
  • Key drivers for global manufacturing include weak earnings growth expectations and deteriorating sentiment

If Moody’s track record is any indication, then now is the time to buy the stocks of manufacturers relating to agricultural, transportation and utilities industries.

Bitcoin slumps below $7000 in crypto selloff

  
Analysis, BITCOIN

Bitcoin under pressure

Bitcoin under pressure
Bitcoin has come under increasing pressure in the past few minutes in a quick fall to $6908 from $7100. The move hit over about five minutes and was likely technical. The December low of $7091 was broken and that set of a cascade of selling through $7000.
Bloomberg is out with a story about the continuing weight of the PlusToken scam but that’s nothing new.
The big level to watch from here is the November low of $6530 but there is a fair amount of breathing room before we get there.
One date to circle is December 27. That’s the expiration of the on-the-run futures contract.
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