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The Krips Report: Appetite for Stocks

By November 28, 2016 No Comments

Despite the Thanksgiving break in the US appetite for stocks remains strong as stocks continue to surge.

The main US equity indices finished the week at record levels despite uncertainty over oil production which hit commodities. This has been fuelled by expectation of a Trump-fuelled economic lift off.

Oil prices however fell due to concerns about Opec’s much-touted deal to cut production running into difficulties. Saudi Arabia pulled out of a meeting with non-Opec producers such as Russia yesterday because the Cartel had not come to an agreement internally ahead of the meeting.
This contributed to the price of Brent oil falling by 3.4% on Friday to $47.30 per barrel.

The main event over the week has been the continued rally in US markets with the S&P 500, Wall Street’s main stock barometer rising to 2,213.35 while the technology-focused Nasdaq climbed to 5,396.26. overall all four US indices rose to record highs. Since Mr Trump was elected the S&P has gained nearly 4% based on his plans for huge infrastructure spending and lighter regulation. This is expected to boost the economy and support corporate earnings. These policies however are also expected to encourage inflation, causing the Federal Reserve to possibly raise interest rates at a faster rate than the market previously expected.

This thinking has caused the dollar to rise against a basket of its peers to a near 14 year inter-day high of 101.92 earlier this week.

Emerging market currencies have been big losers versus the dollar this week with many hitting multiyear lows on expectations that higher US interest rates will draw away capital.