Scoreboard: European push

European markets surged overnight as traders reacted to the Fed's taper decision, while Wall Street was little changed on weak data.

It looks like markets are still digesting the Fed’s taper decision. Not so much in the US equity space – investors, traders, mums and dads – everyone there is taking a well-deserved break. I mean it’s been such a great year for global stocks and well, now the Fed's done – it’s Christmas time people. It’s fair to say that the Europeans had a final pre-Christmas surge – the Dax lifted 1.7 per cent, while the CaC rose 1.6 per cent. Not so on Wall Street though, at the time of writing the major indices were around zero – the S&P500 and Nasdaq just below (-0.1 or -0.2 per cent), and the Dow just above ( 0.1 per cent).

Maybe it’s a case that with the taper done – well, started – the Fed are going to take their sweet time about it. Markets focused instead on the dataflow. Here, things weren’t great. Existing home sales fell 4.2 per cent in November after a 3 per cent hit the month prior. Similarly, jobless claims rose to 372,000 in the week to December 14 – not what you want. It could still be that seasonal distortions are playing with the figures but it obviously isn’t great and is worth watching. At the very least it didn’t help market sentiment.

Elsewhere it was still very much about the taper – gold in particular was smashed, falling about $40 at the time of writing to $1195, its lowest point in more than three years. Then we saw some decent selling action in the US rates space – the US 10-year bond yield was up about 6bp or so to 2.93 per cent. Currencies, however, seem to have digested everything they needed to and there wasn’t a great deal of additional change. The Australian dollar and euro are little changed at 0.8856 and 1.3653 respectively. The only other price action worth noting was on crude. WTI was up about 0.8 per cent ($98.6) on a combination of contract expiry and optimism on the US recovery.

There were a few other bits and pieces – for the US data, the Philly Fed index rose to 7 in December from 6.5, the month prior. A bit of a stir has been caused by China’s central bank, which provided an ‘emergency money injection’ after another surge in interest rates – it has some concerned about a cash crunch.

For our market today, the SPI points to a modest 10 point gain and there is little otherwise to entertain in our session. For tonight there are one or two data releases worth noting – another estimate of third quarter US GDP – still expected at 3.6 per cent. We also see the break-down of UK GDP and eurozone consumer confidence.

This is my last Scoreboard for 2013. I hope you have a great Christmas! Enjoy the rest if you’re taking a break – if you’re an office worker and ‘working through’ – don’t pretend. Don’t forget to be good to people, help someone in need, do your bit to help heal this broken world – and of course – be festive!

See you in 2014 – mid-January or thereabouts.

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