Can the Momentum in Stock Markets Continue?

Daily Analysis - 02/01/2020

Global stocks are up for 2019 and likely to continue into 2020

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The continued decline in bond prices coupled with the continued rise in global stock indices indicates to us that the trend for continued stock market price escalation is likely. One of the central supports for this outlook is the fall in bond prices, which is a traditional indicator for equities appetite. However, 2019 showed us strong rises, but less so than 2018. The huge tax cut in the US contributed mightily to the rise in corporate earnings and hence the stock evaluations.

Natural gas continues its long slide


We ask ourselves show much further natural gas can fall. While we trade the methane energy source lower on its declines, it is down 55.61% since November 2018, and the slide seems resistant to correcting, how low can it go? The lowest price in recent history is the .981 print on January 1992, with the high on Dec 2005 of 15.774. NGas is plentiful around the globe and is increasingly being used as a substitute for the dirtier hydrocarbons. Despite the growing demand, supply is outstripping it, driving price down.

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GBP strengthens against the Euro, Greenback


Sterling is strong today against its major trading counterparts with EURGBP at 0.84796. The thrills and spills in EURGBP and cable are far from over as the Brexit drama is only now beginning. Despite the severe dislocations caused in the UK body politic over these last three years, the real work of negotiating the divorce agreement will only begin in earnest this year. We expect continued volatility in the currency for the near future.

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Global stock index futures higher today


Continuing their winning ways, stocks around the globe are rising. The AEX, the Amsterdam index, along with practically all of the world’s indices are up today except for the Nikkei. As mentioned above, barring unforeseen outbreaks of war, the world is coping well enough with the tariff skirmishes as corporations are still turning out profit by the boatload.

 

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