Spreadex Market Update
The Dow finally does it and crosses 18000!
It was expected that this afternoon’s figures would have a big impact on the US markets; however, what wasn’t expected was a 5% fourth quarter GDP that finally provided the Dow Jones with the fuel it needed to breach the 18000 mark. With this latest indicator of a healthy US economy, it is all but certain that the Fed will announce an interest rate hike next year, potentially earlier than the Bank of England’s intended raise in the UK.
The US markets managed to withstand disappointing core durable goods order data and a fall in new homes sales numbers to reach the 2014 record climax it long ago promised, and recently had to delay. This overwhelming good news for the US indices led to a strong day for the dollar, as it once again crossed the 120 level against the yen, as Japan spent the day on holiday.
This record run by the US markets was aided by Brent Crude oil’s relative stability, as the commodity managed to remain marginally above $60 per barrel for much of the day. However after the doom-laden comments from the Saudi oil minister this morning, oil may want to enjoy this price while it lasts, as those who have the biggest investment in oil are the least interested in helping it rally.
After opening marginally down this morning, the FTSE struggled to recapture the magic of last week, as disappointing current account figures, and a quarterly GDP that points to an overall retracement, put to bed the FTSE’s notions of continuing the Santa rally. This surge from the US markets could have provided a chink of light for the UK index. However, its American peers couldn’t help it escape the black cloud of this morning’s figures, and the strengthened dollar ran rampant over the pinched pound.
Finally, with a lack of data in Europe, the Eurozone indices were led by other worldwide events, especially those in-house. The main news of the day was the Greek government’s second failed attempt to elect their proposed presidential candidate Stavros Dimas. Yet another lack of majority means it is looking more and more likely that Greece will have to endure a fractious general election, bringing more volatility to a country that is craving stability.
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