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Commodities Crunch

Stocks fell further overnight after a soft Asia Pacific trading session yesterday. Despite positive industrial data from Japan and the USA in the last 24 hours, investors sold, apparently with an eye on year-end tax issues. While volumes were low and falls mild, the continuation of recent weakness could see local investors on the back foot today.
By · 10 Dec 2015
By ·
10 Dec 2015
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Stocks fell further overnight after a soft Asia Pacific trading session yesterday. Despite positive industrial data from Japan and the USA in the last 24 hours, investors sold, apparently with an eye on year-end tax issues. While volumes were low and falls mild, the continuation of recent weakness could see local investors on the back foot today.

Steady commodity prices, and a lift in copper, may see support for local shares. Mining and energy stocks were yesterday’s top performers, and may feature again today as traders are forced to lower the risk premium attached to commodity exposed stocks. Currently priced for further falls, even a steady state in commodity prices should garner support for mining and oil and gas shares.

Employment data today is expected to reverse the strong gains made in October, with consensus clustering around a loss of ten thousand jobs. Implications for interest rates are low, but a stronger than expected number could see buying. Traders remain focussed on the co-incidence of the US FOMC meeting and the statistical analysis that suggests year end rallies start around the 15th of December.

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Michael McCarthy
Michael McCarthy
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