Should we expect the New Year rally?
Good macroeconomic indicators of developed countries, as well as a week full of fundamental factors, demonstrated excellent dynamics in world markets. Should we expect the New Year rally?
📈 Investors are positive before the end of 2019 and no uncertainties can change their mood. The reason is the desire to fix the maximum profit in 2019, but rather at the beginning of 2020 to let the markets into a powerful correction.
US stock market indices updated historic highs, bullish momentum strengthened. It was not without Trump's manipulations, because the global issue of the trade war has not been resolved.
Not even 1 phase has been signed. Only verbal agreements were reached, which can easily be crossed out in January 2020.
The US dollar after the decline (by the dollar index) gives signals the formation of a new rising wave in the bull market.
European markets, as well as Asian ones, have also appreciably strengthened, petrolium prices remain at highs, while gold behaves timidly, apparently, a medium-term correction is brewing in the framework of the global rising market.
The Russian stock index, even under the conditions of sanctions, remains an profitable stuff, as it is the cheapest and underestimated in the world, while the most generous dividends are paid by Russian companies.
In general, global markets are stable. This trend may be unchanged until the end of 2019.
Next week, the volatility of financial instruments will increase sharply. The growth of VIX index quotes is not ruled out even in the case of an upward rally in world markets.
Not the good time to form investment portfolios, however, the golden period for short-term high-risk investments.
Fundamental factors contributing to the development of dynamics next week:
🇷🇺 Minutes of the Central Bank of the Russian Federation on monetary policy issues. Another softening of the monetary policy is behind, at the upcoming meeting, the participants will shed light on the strategy of the Central Bank of the Russian Federation in 2020. The question is when will be next decline. Under the current policy of the Central Bank, stock markets will continue to grow, which will delight new investors, who are more and more individuals in the Russian Federation.
🇺🇸 Statistics on orders for durable goods in the United States. The growth trend slowed down, however, it has not stagnated yet. Statistics, to say the least, are average. While the growth in the number of orders continues, the economy will feel good.
There are fewer orders themselves, but the volume is increasing. This suggests that there are fewer contractors, but they are buying more. A little worrying in the long run, because it looks like a monopoly, and what will happen when key counterparties satisfy demand? Data is released on Monday and Tuesday.
New home sales in the USA. Statistics promises to show a slight increase in annual terms and an impressive strengthening relative to last month. Forecasts are positive.
Data on the number of applications for unemployment will indicate a decrease of number of people who wish it.
Classical data on stocks of crude oil. With any development of events - the general trend of 2019 will not be able to break. For oil - a bullish scenario. The publication of statistics on drilling rigs will also have not a significant impact on oil, even with a significant increase, which, in our opinion, is currently not advisable.
🇨🇦 Canadian GDP. In general, the news is not too significant, since no major changes were observed within the month. Forecasts of world analysts - indicators remain the same as last month: at the level of + 0.1%.
🇫🇷 France will share data on the total number of unemployed in its country. Forecasts are stable.
🇯🇵 Minutes of the meeting on the monetary policy of the Central Bank of Japan. On the agenda is the discussion of the Bank of Japan strategy for 2020. We will not build forecasts, but we will definitely listen.
Statistics determining the ratio of open vacancies in the country to the number of applicants. The performance is remarkable, for every 100 vacancies - about 60 job seekers. There is no shortage of jobs, which directly positively affects the level of unemployment in the country. Well, Japan is famous for the hard work of its people.
Japan Inflation Data. According to forecasts, we remain at the level of 0.6% in annual terms. For the Japanese economy - not enough. Unfortunately, the Central Bank did not come up with how to increase inflation in the face of negative interest rates.
The volume of industrial production, as well as the volume of retail sales, managed to enter a growth trend, after 2 months with catastrophically low rates. It is worth noting that the statistics are still negative, but the vector is given an ascending one.
The consumer price index excluding food and energy prices remains very unpredictable, we don't give forecasts. If we evaluate the dynamics of the last 6 months, it isn't possible to determine the general tendency.
🇪🇺 A monthly report by the Central Bank, which has traditionally become one of the most boring fundamental events on the world stage. We will not hear anything new at the current meeting. They want Euro-cheaper, and inflation-more, while there is nowhere to soften monetary policy. That's how we live.
Christmas Eve in Western Europe, Australia, North America and New Zealand on Tuesday. Earlier closing of trading, increased volatility, unpredictable movements.
Wednesday is the long-awaited Christmas. A day off on all world markets, as well as Boxing Day on Thursday. European markets will not be traded, as well as the Pacific markets.
The current trend in global markets is more likely to continue than to change, however, be prepared for everything by Christmas Eve. Not for nothing successful investors try not to trade during this period.
Merry Christmas and happy New year! 🎄