- Oil drops ahead of OPEC + meeting
- Gold falls with stocks and the dollar
US futures on, and are down on Monday, while the return rotation in tech stocks lashes out on futures, which at the time of writing are only slightly lower. The sell before the Wall Street session follows the US markets showing some of theirs.
Oil is down ahead of today’s OPEC +, where production cuts must be extended to try to keep global markets in balance. Some members, including Iraq, want to boost production in order to improve their own economic performance.
Global Financial Affairs
US futures have reversed the cyclical rotation with Russell 2000 contracts suffering the largest losses. The same pattern was visible around the world. Small-cap stocks, banks and energy companies – sectors that led the November rally, having been ignored throughout the pandemic – have started to fall, while tech and defensive stocks have outperformed.
In Europe, the index opened lower, with ongoing Brexit negotiations adding to coronavirus concerns. Over the weekend, Europe’s death toll from COVID-19 topped 400,000. In-person Brexit talks finally resumed on Saturday, but traders are now waiting to see if there will be a phone call between. European Commission President Ursula von der Leyen and British Prime Minister Boris Johnson to demonstrate that talks are back on track with just five weeks before Britain leaves the EU.
The energy sector was the furthest behind. Royal Dutch Shell (AS 🙂 and BP (LON 🙂 were both down following the sale of oil futures ahead of today’s OPEC + meeting.
In Asia, the index fell 1.6%, its biggest loss in a month, but has since recovered. Hong Kong was the worst performer, dropping 2.1%, due to an increase in COVID-19 cases there and possible new US sanctions against Chinese companies. The index had recorded its best month in 25 years.
China outperformed the region, down just 0.5%, after its National Bureau of Statistics said its official was at 52.1, topping 51.5 expectations.
Japan was the second best performer, losing just 0.8% after the country climbed 6.4% on an annual basis.
Australia fell 1.25% wiping out all of the gains from last week, but the index will still post its highest-performing month in history. The sale was prompted after another wave of tensions between Australia and China, its main bilateral trading partner. China hit the Australian wine industry with a 200% tariff.
Last week, US stocks hit new highs, with the best month since 1950 on potential vaccines.
Stocks around the world are still up 13% in November, as traders hope for a global economic recovery next year, even as the US and Europe continue to struggle with increasing cases of COVID-19. Goldman Sachs predicts that there will be significant vaccine availability by mid-2021, which will boost economic growth.
Also on Sunday, U.S. surgeon general Jerome Adams promised timely reviews of vaccine requests.
It appears that despite the continued increase in the number of cases and possible additional lockdowns, investors are willing to continue to outbid stocks – with occasional profit-taking – as long as the data trajectory is on track and let the Fed remain vocal. The market is also relieved to see that the transition of power from the Trump administrations to Biden appears to be progressing despite some continued saber-rattling from President Donald Trump.
Treasury yields rebounded from falling, regardless of this morning’s sell-off.
US 10 years every day
The rally formed an intraday hammer, confirming the November 20 inverted hammer and the uptrend line.
Le extended its sale to its lowest level since April 27, 2018.
Daily dollar index
As the greenback falls below September 1 low, it registers a new low in the downtrend.
Incredibly, despite the dollar and stocks selling.
We therefore attribute the decline to the technical aspects. Once the bullish wedge failed, the longs were halted and the shorts were triggered. Gold found demand at Sunday’s low and was able to cut most of Monday’s losses. It is still below the 200 DMA which underlined the importance of the bullish model which exploded.
Even though gold and silver remain closely watched for new highs, which so far have been delayed, could be poised to move higher.
broke off the session high of its three-day rally, after finding support at the bottom of a rising channel after an extraordinary selloff.
If the cryptocurrency’s price closes its lows, it may form a bearish shooting star. If the price closes near the start of the session, it will complete a bullish three-soldier white pattern, very close to the December 2017 record.
is down for the second day. The OPEC + cartel is divided between the self-interest of members of the East and West and the demand for diesel, which has regained 90% of pre-pandemic levels, and kerosene which is still drained at just 50% of pre-COVID levels.
While oil is down, it rebounded from its lows after finding support at the bottom of a bullish channel, framing the short-term uptrend, after breaking free from the medium-term downtrend, framed by the channel down from its August highs.
Up to the front
- On Monday, OPEC is holding a full virtual ministerial meeting to make a final decision on whether to increase production supply as planned in January.
- The Reserve Bank of Australia holds a Tuesday.
- Federal Reserve Chairman Jerome testifies before Congress Tuesday and Wednesday.
- The United States is expected to show that more Americans returned to work in November on Friday, but at a slower pace than last month.
- Futures contracts on the S&P 500 index fell 0.6%.
- The Stoxx Europe 600 index fell 0.4%.
- The MSCI Asia Pacific index fell 1.6%.
- The index fell 0.09%.
- The dollar index fell 0.1% to 91.69.
- The gain of 0.123% to $ 1.1990.
- The soared 0.2% to $ 1.3335.
- The weakening 0.1% to 104.19 per dollar.
- The yield on 10-year treasury bills fell one basis point to 0.83%.
- The yield on treasury bills was unchanged at 0.15%.
- Germany’s yield fell by one basis point to -0.60%.
- The UK yield fell one basis point to 0.271%.
- West Texas Intermediate crude fell 1.5% to $ 42.15 a barrel.
- Gold fell 0.5% to $ 1,778.33 an ounce.