Saturday 30 November 2019

Weekend update - World equity markets

It was a bullish month for most world equity markets, with net monthly changes ranging from +3.7% (USA), +3.1% (France), +2.9% (Germany), +2.6% (Australia), +2.1% (Greece), +1.6% (Japan), +1.1% (Russia), +1.0% (Spain), +0.9% (Brazil), to -1.9% (China).

Lets take our regular look at ten of the world equity markets

USA - Dow

The mighty Dow climbed for the ninth month of eleven, breaking a new historic high of 28174, and settling +1005pts (3.7%) to 28051. Monthly price momentum has turned positive for the first time since Oct'2018.

Note the key 10MA at 26513, which was settled far above, and the m/t bullish trend - from the Dec'2018 low of 21712, which remains comfortably intact. Next key resistance is psy'30k, with key Fibonacci of 34430. There is little reason not to expect the latter sometime in 2020.

Germany – DAX

The economic powerhouse of the EU - Germany, saw the DAX climb for a third month, settling +369pts (2.9%) to 13236. Monthly price momentum continues to climb, as the Jan'2018 historic high is very near. Whilst NIRP from the ECB continues to destroy the German/European financials, renewed printing (currently €20bn a month) will certainly help improve liquidity and juice most asset classes.

Japan – Nikkei

Japanese equities climbed for the eighth month of eleven, with the Nikkei settling +366pts (1.6%) to 23293. Monthly price momentum has turned positive. I would note the Oct'2018 multi-decade high of 24445.

China – Shanghai comp'

Chinese equities struggled, with the Shanghai comp' settling -57pts (1.9%) to 2871. This was the first close under the 10MA since January. I would note s/t rising trend - from the Jan'2019 low, is being tested.

Brazil – Bovespa

Brazilian equities climbed for a third month, with the Bovespa breaking a new historic high of 109671, and settling +1015pts (0.9%) to 108233. Price momentum is on the high side, but there is zero sign of a s/t ceiling/turn.

Russia - RTSI

Russian equities climbed for a third month, with the RTSI'50 settling +15pts (1.1%) to 1438. The November candle is rather spiky, and threatens a s/t top. More broadly, next resistance psy'1500, and then 1580/90s.

France – CAC

A third monthly gain for French equities, settling +175pts (3.1%) to 5905, the highest monthly settlement since June 2007.

Spain – IBEX

A third consecutive monthly gain for Spanish equities, settling +94pts (1.0%) to 9352, which was notably above the 10MA. Price momentum ticked upward, and is fractionally positive.

Australia – AORD

Australian equities climbed for the ninth month of eleven, breaking a new historic high of 6996, and settling +175pts (2.6%) 6948.

Greece - Athex

Greek equities climbed for the tenth month of eleven, settling +19pts (2.1%) to 901, the highest settlement since Nov'2014. Next resistance is psy'1k, and then the 1200s. Despite the gains this year, the Greek market is still a 'beyond horrific' -83.1% since Nov'2007.


Nine markets were net higher for November, with one net lower.

New historic highs for the USA, Brazil, and Australia.

Nine markets are trading above their respective 10MA, with China being the exception.

Looking ahead

Earnings: LE, CRM, MRVL, WDAY, ZS (Tues'), CPB, WORK (Wed'), TIF, AMTD, LULU, ULTA, ZM, CLDR, AOBC (Thurs'), BIG (Fri').

Key event: NATO summit Dec'3/4th in London. US President Trump will be attending, and we can expect considerable media attention, with at least one or two press events.


M - PMI/ISM manu', construction
T - Vehicle sales
W - ADP jobs, PMI/ISM serv', EIA Pet'
T - Weekly jobs, factory orders
F - Monthly jobs, consumer sent', wholesale trade, consumer credit

Final note

There are just 20.5 trading days (at least for the US market) left this year. With new historic highs in the SPX, Nasdaq comp', and Dow, November was yet another month for the bulls.

Whilst the US economy is fairing better than most other countries, there are clearly massive issues out there. The uncertainty of the 2020 election is a valid concern, although if the US economy can avoid recession, with a broadly strong equity market, Trump could be expected to win a second term.

Meanwhile, we have the Fed, which has long since capitulated to the US President and Mr Market itself, with lower rates, the end of QT, and having even spun up the printers.

A s/t equity washout is due, whether into year end, or early 2020. However, any such cooling wave has to be seen as such, with far higher levels to be expected in 2020. As ever, that view would be dropped with any bearish monthly close.

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Have a good weekend
*the next post on this page will likely appear 5pm EDT on Monday.