US stocks pull back from record highs - 29.11.2016

US stocks decline after rallying throughout November

US stocks slipped on Monday as investors took profits after the market hit record highs in a rally that lasted for three straight weeks. The dollar fell: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, closed 0.3% lower at 101.154. The Dow Jones industrial average fell 0.28% to 19097.9, led by Visa and Johnson & Johnson shares. The S&P 500 lost 0.53% settling at 2201.72 with financial stocks leading the decliners while defensive stocks such as utilities and telecoms outperformed. The Nasdaq index dropped 0.56% to 5368.81.

US stock indexes pulled back as investors deemed the market overbought after strong gains recorded in the last three weeks drove stock valuations higher. A batch of important economic data are due this week the results of which will determine whether the positive market momentum, based on expectations of stronger growth and less regulation under a Trump presidency, will endure. On Wednesday, November Chicago PMI will be released, Markit will publish its Manufacturing PMI. The Institute of Supply Management will release its November Manufacturing PMI on Thursday. Today at 14:30 CET the second reading of third quarter GDP will be released in US. The tentative outlook is positive. At 15:00 CET September Case-Shiller Composite-20 House Price Index will be published. The outlook is positive. At 15:15 CET Federal Reserve Bank of New York President William Dudley will speak about the economic growth in Puerto Rico. At 16:00 CET the Conference Board will publish the November Consumer Confidence Index, the tentative outlook is positive for dollar.

SP 500

Political uncertainty and lower oil weigh on European stocks

European stocks fell on Monday as lower oil prices weighed on energy stocks and investors worried about political uncertainties in France and Italy. The euro rose against the dollar while the British Pound fell. The Stoxx Europe 600 index fell 1% to 339.19. The DAX 30 declined 0.9% to 10597.92, France’s CAC 40 lost 1% and UK’s FTSE 100 closed 1% lower to 6773.73.

Francois Fillon, a free market advocate, won 69.5% of the vote in France’s center-right primary on Sunday. He is seen as a conservative candidate who can win in presidential elections against the far-right candidate Marine Le Pen who leads the populist movement against globalization. Fillon’s victory in primaries reduced concerns Le Pen may win in the presidential elections in spring, with subsiding fears about the future of the euro-zone lifting the euro. Italian banking stocks fell in anticipation of the referendum on constitutional reforms this Sunday as polls showed growing opposition to proposed reforms to cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Proponents of the reforms suggest they make it easier to implement important legislation to assist the country’s ailing banking sector. Today at 14:00 CET preliminary November Consumer Price Index will be released in Germany. The tentative outlook is negative for euro.

Asian stocks follow Wall Street’s lead

Asian stocks are retreating today following the pullback on Wall Street overnight. Nikkei ended 0.27% lower at 18307.04 today despite the yen decline against the dollar. The Shanghai Composite Index is 0.19% higher and Hong Kong’s Hang Seng index is down 0.25% as Chinese state-owned banks sold dollars in the onshore foreign exchange market for a second straight day to support the yuan. Australia’s All Ordinaries Index edged 0.22% lower with Australian dollar weakening against the dollar.

Oil prices fall on doubts OPEC will agree to output cuts

Oil futures prices are falling today after rising on Monday on hopes the Organization of the Petroleum Exporting Countries could agree this week on a plan to curb crude output. Oil prices ended higher yesterday despite a failure by OPEC experts to arrive at an agreement on concrete plans for oil output cuts by individual countries to be presented to an OPEC meeting tomorrow. January Brent crude rose 2.1% to $48.24 a barrel on London’s ICE Futures exchange on Monday.