Opening Bell: Gold, U.S. Dollar Jump Even As Equities Hover Around New Highs
Investing.com | Dec 24, 2019 07:11AM ET
Once again, U.S. equity futures, including for the Dow, S&P 500 and NASDAQ are flat and European shares have edged lower after mixed trading during the Asian session. In marked contrast to last year's Christmas Eve day, when shares collapsed during the final day of trade ahead of the holiday, muted trading toward the end of this year appears to be propelling U.S. indices to their best results of the decade, at least so far.
Still, even with risk appetite apparently on full display, gold has hit a month-and-a-half high, its best performance since 2010.
h2 Global Financial Affairs/h2U.S. index futures were little changed this morning, even though Boeing (NYSE:BA) shares—which catapulted yesterday—pushed the Dow to a new record high on Tuesday.
The Boeing jump was a direct response to the firing of CEO Dennis Muilenburg and the news the company had appointed its chairman David Calhoun in his place. Investors are seeing this change as Boeing's attempt to regain public confidence after two crashes of its popular 737 MAX jet took the lives of hundreds of passengers, which resulted in the global grounding of the plane.
Though on track to close approximately 25% higher on the year as it hovers near all-time highs, the STOXX Europe 600 opened lower, pressured by Telecommunication shares. As of this writing the index has reversed, and is edging marginally higher.
Technically, the index is trading according to a falling flag pattern, whose upside breakout would signal an attempt at besting yesterday’s all-time high and Friday’s record close.
Thin volume kept Asian stocks little changed this morning. China’s Shanghai Composite stood out, (+0.67%), as dip buyers took advantage of yesterday’s biggest selloff in six weeks, fueled by the technology sector, after the state-backed China Integrated Circuit Industry Investment Fund said it would reduce its holdings in three stocks— Goke Microelectronics (SZ:300672), Shenzhen Goodix Technology (SS:603160) and GigaDevice Semiconductor Beijing (SS:603986).
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During Tuesday's U.S. session, the S&P 500 closed up for the eighth time in nine sessions, once again at a fresh record high. The $45 trillion MSCI All-Country World Equity Index remained steady, having leaped 25%, on its way toward its best advance since 2009.
Oddly, since risk-sentiment continues to drive equities higher, gold also gained, moving to a month-and-a-half peak in its best performance since 2010, as mixed U.S. data—disappointing durable goods orders, better than expected new home sales—kept hopes of rate cuts alive. The same assumptions pushed the dollar close to a two-week high.
Gold extended a topside breakout outside of a falling channel, with both MACD and RSI doing the same.
As a rule, gold and equities tend to move in oppositional directions. Is the market suffering from cognitive dissonance?
h2 Up Ahead/h2- Chinese Premier Li Keqiang hosts a summit with Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in Tuesday in Chengdu; the event will be focused on trade.
- The majority of global stock markets will be closed Wednesday for the Christmas holiday. Markets in Australia, Canada, Germany and U.K. will also be shut on Dec. 26.
- U.S. jobless claims are released on Thursday.
- Japan retail sales and industrial production are both scheduled for Friday.
- The Stoxx Europe 600 Index fell 0.1%.
- Futures on the S&P 500 Index were little changed.
- Italy’s FTSE MIB Index dipped 0.4%.
- The MSCI Asia Pacific Index decreased 0.1%.
- The MSCI World Index was little changed.
- The yield on U.S. 10-year Treasuries dipped one basis point to 1.92%.
- Germany’s 10-year yield gained one basis point to -0.24%.
- Italy’s 10-year yield rose two basis points to 1.43%.
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