The Before 24…. Global market news for your next 24…
The View: News out of Europe both good and bad moved all the global markets.
Asia rallied closing its Monday trading session for the first time in six sessions. Led by the record breaking black Friday sales numbers from the US and investor reaction to potential new solutions to the European debt crisis. The Nikkei closed up 127.48, Hang Seng rallied 328.22 and the Shanghai composite was up 2.81 points. The Nikkei shares were up, after 6 straight trading sessions, on news from Toyota that it has been in talks with BMW to form an alliance to build environmentally friendly autos in the future.
European stocks rallied on Friday closing positive, breaking a seven day losing streak in light volume, despite signs that the European debt crisis is deepening. On Friday both Hungry and Belgium debt rating was cut as well as record euro- era high yields in Italy’s bond auction.
Even though Europe closed in the green on Friday it spent most of its trading day negative as markets were under pressure from investor’s disappointment from the Thursday meeting between German, French, and Italian leaders. The meeting produced nothing new towards a possible solution for the crisis. Emerging from the meeting German Chancellor Angela Merkel again critized any plans that call for the issuance of euro bonds and for the ECB to become less of an inflation watchdog and more a lender of last resort. French President Sarkozy added his two cents saying all parties had agreed not to put an additional pressure on the ECB (European Central Bank).
European markets were in rally mode in their early Monday trading session as markets and investors react to the news of possible movement in the European debt situation. News the IMF met over the weekend to work on a 600 billion euro loan to Italy despite a denial from the IMF rallied the markets. Also moving the markets news reports that the European leaders were negotiating a potential fiscal pact. The proposal would make countries abide to budget disciple by making them legally binding. Two spot of concern for the markets were the widening of the spread between the German 10 year and the US 10 year and a warning from Moody’s that the rapid deteration of the euro zone sovereign debt issues and the toll it is taking on the European banking sector is threatening the credit ratings of all the European government bond ratings.
US markets closed up marginally on Friday’s early close, as European fears crept back into the minds of the markets.
The Dow close the week down over 500 points in the worst Thanksgiving week since 1942. In the last two weeks the Dow has fallen over 7.6%. The Nasdaq which slid 18.57 points on Friday, which continued a down trend of four straight weeks, has fallen 11%. The S&P closed down also by 3.12 points on Friday bring it down year to date to 7.9%. News from Europe also caused commodities to close down with Gold closing down $10 and Oil closing -0.51.
Europe also acted as a catalyst for strengthening the dollar as investors began moving their money out of Euro’s into the greenback. If the trend continues consumers will continue to see a difference at the pump and the grocery stores as food commodities continued closing lower on Friday.
Futures point to a triple digit higher opening. Crude was higher at $99.72 as well as gold which closed at $1712. 70