Lets take our regular look at ten of the world equity markets.
Special note: After some consideration, I have replaced Spain, France, and Greece, with South Africa, India, and Hong Kong.
USA - Dow
The mighty Dow broke a new historic high of 29373, but settled -282pts (1.0%) at 28256. It is notable that whilst price broke a new hist' high, the various technicals are very divergent to the highs seen in 2018. I would note the key 10MA at 27008.
Germany – DAX
The economic powerhouse of the EU - Germany, saw the DAX break a new historic high of 13640, but settling -91pts (0.7%) to 13157. Technically extremely divergent to 2018 and 2015.
Japan – Nikkei
Japanese equities settled -451pts (1.9%) to 23205, but notably still above the key 10MA. There remains a monstrous technical/cyclical divergence that stretches back to 2015.
Brazil – Bovespa
The Brazilian market broke a new historic high of 119593, but settled -117pts (0.1%) to 115528. Note first support of the 10MA in the 104000s.
Russia - RTSI
Russian equities broke a new multi-year high of 1651, but settling -31pts (2.1%) to 1517. Note first support of the key 10MA at 1383.
India – SENSEX
Indian equities broke a new historic high of 42273, but settling -530pts (1.3%) to 40723. Note the key 10MA at 39452.
China – Shanghai comp'
First, note that the last day of January trading in China was the 23rd. The Shanghai comp' swung from a high of 3127, to settle -73pts (2.4%) to 2976, although that was still above the key 10MA. Any price action under the Dec' low of 2857 would merit s/t alarm bells, and offer the lower bollinger in the 2500s. Considering the Corona virus, the latter appears a very high threat.
The Chinese market is currently scheduled to re-open Monday Feb'3rd. However, its entirely possible the communist leadership will decide to push this out another week on 'health grounds'.
South Africa – Dow
The South African Dow swung from 1846 to settle -50pts (2.8%) to 1753. The January settlement was back under the key 10MA, with next support of 1710/1690s. Cyclically very low, and inclined to see a major wave upward, after any s/t weakness.
Hong Kong – Hang Seng
The Hang Seng saw a high of 29149, which was notably above m/t descending trend, but swung powerfully lower, settling -6.66% to 26312. The January settlement was notably under the key 10MA, and bodes for further downside. Next support around the 25200s.
Australia – AORD
The Australian market broke a new historic high of 7260, settling +318pts (4.7%) to 7121. Note first support of the 10MA in the 6700s.
Nine world markets settled net lower for January, with one net higher.
Hong Kong lead the way lower, whilst Australia managed a very significant gain.
New historic highs for the USA, Germany, Brazil, India, and Australia
Eight markets settled the month above their respective monthly 10MA, the two exceptions were South Africa and Hong Kong.
Another very busy week is ahead. It will be complicated by further sporadic Coronavirus headlines.
Key event 1: Monday Feb'3rd will see the Democrat Iowa caucus. It is clearly the case that the market will not be pleased if Sanders or Warren poll better than Biden, which does appear very probable.
Key event 2: Tuesday, 9pm EST, is scheduled to see the 'State of the Union' (SOTU) address by the US President. That will no doubt capture considerable media attention.
M - SYY, ON, GOOGL, NXP
T - CNC, SIRI, SNE, BP, LITE, COP, RCL, RACE, DIS, SNAP, F, CMG, GILD
W - SPOT, MRK, GM, HUM, CPRI, QCOM, TWLO, PTON, ZNGA, GRUB, GPRO, FEYE
T - TWTR, BMY, CI, ABMD, YUM, WWE, DNKN, UBER, PINS, BIDU, WYNN, ATVI
F - ABBV, CBOE,
M - PMI/ISM manu', construction
T - Vehicle sales, factory orders
W - ADP jobs, intl' trade, PMI/ISM serv', EIA Pet'
T - Weekly jobs, product'/costs, EIA NG', Fed' bal sheet
F - Monthly jobs, wholesale trade, consumer credit
|Looking upward to the moon... from outside the EU|
The next few weeks will likely be wildly volatile. The Corona virus is a problem, but whether it becomes something of significance to the global economy/financial system, is very difficult to say.
Mr market will be increasingly focused on whom the Democrat nominee might be. Bernie Sanders will likely poll better than most are expecting, and that won't please many within the financial world.
An equity market washout of around 10% is very much viable within February. It should be clear though, any significant market/economic upset will see the central banks respond with further rate cuts, and printing even faster. Further, we can expect fiscal stimulus from various governments this year.
Sunday will see the Superbowl, but whilst that is going on, China will (likely) be reopening, and the futures will be worth checking at least a few times between plays. One thing is for sure, next week won't be boring!
|Sunset... from outside the EU.|
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