(21 DECEMBER 2018)DAILY MARKET BRIEF 2:Stocks lower as US shutdown nears
Equities are under pressure Friday, as concerns over Sino-American trade tensions, a US government shutdown (due Friday midnight local time), recent Fed rate hikes and reports of Chinese officials hacking the US are scaring investors. Oil prices are also absorbed in the downward spiral. Both equities and oil prices turn out to be turning in tandem after negative correlation in the last 4 years.
China has announced monetary and significant tax cuts, but still major indices fell. The Chinese mainland CSI 300 dropped 1.24% while Japan’s Topix was down 1.91%, lowest in 20 months, and the Nikkei 225 off 1.11%. Hong Kong’s Hang Seng rose 0.51% thanks to Tencent Holdings (+4.51%) which benefited from Chinese government approval of further online gaming solutions. South Korea’s Kospi was more robust, closing at +0.07%. At opening, European indices are in the red with Euro Stoxx 50 -0.73%, French CAC 40 -0.69% and German DAX -0.55% while the UK FTSE 100 is converging. US shares are set for a third daily drop, as the US government shutdown nears. USD/JPY (-1.30% year-to-date) is declining further, as the yen is gaining strength for the sixth consecutive time against the greenback amid slowing growth concerns. Currently trading at 111.23, USD/JPY is expected to bounce slightly, heading along 111.45 short-term.
