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Fri, 26th May 2017

Anirudh Sethi Report

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Archives of “Global Indices” Category

A Trillion Dollar Down Day

After reaching a record market cap of $74.1 trillion this week, global equities saw almost $1 trillion evaporate in a single day

As Bloomberg notes, concern over Donald Trump’s administration and a political crisis in Brazil pushed the MSCI All-Country World Index down 1.5 percent in the past two days, the most since September.  

Overnight US Market :Dow closed +142 points.

The S&P 500 finished the day 0.7 per cent higher at 2,381.73 — despite the lat- week rally, it finished the week down 0.4 per cent. Meanwhile, the Dow Jones Industrial Average finished Friday 0.7 per cent higher at 20,804.84 but was off 0.4 per cent over the week.

The tech-heavy Nasdaq Composite climbed 0.5 per cent to 6,083.70 on Friday and clocked a 0.6 per cent loss over the week.

The jitters surrounding Mr Trump also took their toll on the dollar, which fell 2.1 per cent over the week for its biggest five-day drop since April 2016.

However, oil prices rallied ahead of next week’s Opec meeting, with markets expecting Opec and Saudi Arabia to agree to extend their output cut agreement by another six to nine months. West Texas Intermediate, the US crude marker, rose 5.3 per cent over the week to $50.37 a barrel, while Brent crude, the global oil benchmark, gained 5.6 per cent to $53.65 a barrel.

European Indices down (sans Italy) but off the lows

Down but not a disaster…

The European stocks are down on the day, BUT the major indices are ending off the lows.
  • German Dax is ending the day down -0.3%.
  • UK FTSE is down -0.9%
  • France’s CAC is down -0.6%
  • Spain’s Ibex is down -0.6%
  • Portugal’s PS120 is down -0.85%

The lone wolf in the bunch was the Italian FTSE MIB which eked out a gain of 0.07%.

Although down, a disaster was averted. The snapshot at the start of the NY session showed the following changes:
  • German Dax down -0.73%,
  • UK FTSE -1.03%,
  • France’s CAC down -1.01%,
  • Spain’s IBEX -1.64%, and
  • Italy’s FTSE MIB -1.60%
That is a pretty good comeback for the major European indices.
How has 10 year yields done today?
  • Germany 0.346%, -3.2 bp (was down -5.2 bp at the start of the NY day)
  • France 0.803%, -3.2 bp (was down -4.7 bp)
  • UK 1.063%, unchanged (was down -2.8 bp)
  • Spain 1.567%, unchnaged (was down -3.5 bp)
  • Italy 2.151%, unchanged (was down -4.3 bp).

Brazilian Bloodbath: Currency Halted, Futures Crash, Bonds Tumble Most On Record

As first reported last night, Brazil has plunged back into yet another political crisis less than a year after the impeachment of Dilma Rouseff, when a report in Brazil’s O Globo newspaper revealed that President Michel Temer was involved in an “hush money” cover-up scheme involving the jailed former speaker of the lower house of Congress, Eduardo Cunha, who was the mastermind behind the impeachment of Rouseff.

Already an impeachment request against Temer has been filed by the opposition, although it was unclear who would replace him or what the process would look like. If Temer resigns or is impeached, Congress would elect an interim president until the next scheduled vote in October of 2018. An early election could only be held with a constitutional amendment approved by lawmakers.

 

And while most Brazilian asset markets were closed at the time, a Brazilian stock ETF trading in Japan, gave an indication of what to expect: a drop of about -8%.

In retrospect it may have been optimistic, as moments ago the Brazilian real was halted for trading after crashing 6%…

Nikkei 225 closes down -1.32% at 19,553.86

Soggy tones overall as USDJPY continues to flounder 18 May

  • high 19601.53
  • low 19449.73
  • Topix -1.32% at 1555.01
  • USDJPY 111.23 after the rally from 110.53 to 111.33

Expect offers/res between 111.35-50. Bids/demand into 111.00, 110.80 and 110.50 again.

In Australia the S&P/ASX200 closed down 0.94% at 5731.90