Market Commentary-December 16

As the trading week concluded on Friday to a close, the U.S. Indices have joined up with others around the world and found liquidation furthermore. We ought to keep in mind that one of the most detrimental performing market sectors in 2018 continues to be financials.

Resulting from small liquid markets, high flows drove values to the extreme; therefore we have indeed witnessed that in 2018. Fascinating that even while core indices approached levels not seen ever since April of 2018, the VIX (Volatility index) remains to be hovering at 21 handle - which shows that few are hedging as well as less are invested. 

The absence of players, as well as risk appetite, has taken its toll on equity sentiment, and also the desire not to hold positions (regulation even) through year-end isn't helping. This year ended up being a 'year of the panic' plus the carnage it leaving behind is currently on record.

Quite a few, thoroughly experienced asset, as well as hedge funds managers, have thrown in the towel this year; however, we don't know the complete extent of the dirt at this time. Nevertheless, everything we see right now would be the fodder for next year set up. All core indices ultimately close down 2% an average on Friday, and once again auto’s and also financials led the ways.

European markets reach their day session lows at the beginning of trading on Friday and were able to claw back most of that just before closing. There's yet a great deal of an overhang here that a majority of are not confident which of the challenges are most troublesome!

The Brexit scenario is expected to be the head issue by end of the first quarter in 2019; however, this is steadily looking as though it might continue forever. Spending budgets are increasingly being discussed too, and thus all are eager to know whether they have got the €39 Billion payment or otherwise.

In France the unrest and the call for Euro-credit bond dispersion it's any surprise that all major stock indices are lower on the year. The German DAX index is off 16% Year-To-Date, with Italian and Spanish down by 13.5% and 11.5% respectively. The French CAC index has carried out just a little better; however, it too is lower by 8.5% Year-To-Date. 

Included in this the Euro Dollar decline of minus 6% and it also shouldn't be a big surprise the U.S. is unchanged - there is not anywhere where one can invest. The British Pound and FTSE 100 are down 7% and 11% respectively, not a very good year for the United Kingdom or any American investors.

In China on Friday had been all about the launched weak economic numbers and also the concern that this slowdown is scattering throughout Asian-Pacific markets. The worry that the weaker contagion is affecting not only the region, but producers, commodity prices, and also sentiment almost everywhere. 

Key stock markets had been underperforming all year long, and those who have been following overall performance will be able to testify to that.

SPX (S&P500) Chart


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