Good Morning Fellow Traders,
Thanks @Quantum Torus, @Oscar09 @highlandlad @Ravgnome @Bugsam @valvesound and the myriad of posters and lurkers on the Day Trading Threads. Hope you all had an enjoyable Christmas and are feeling relaxed. Don't expect too much in the way of opportunities, price action and volume as we wind down another year. It sure has been a doozy at times.
The ASX has come out ahead in seasonally-shortened Christmas Eve trade, with mining, financial, and energy stocks hitching a ride on Santa's sleigh after a dismal open.
The benchmark S&P/ASX200 index dropped by as much as one percent in early trade today, but a mining and energy-driven rally helped it climb 0.48 percent ahead at 5493.8 by an earlier-than-usual close of 1415 AEDT.
The broader All Ordinaries was up by 26.2 points, or 0.48 percent to 5559.6.
The Aussie continued to edge higher, buying to 70.62 US cents, though still down from 71.06 US cents on Friday.
A steep sell-off in US stocks worsened in a pre-holiday shortened session, as a move by the US Treasury secretary to convene a crisis group and other political developments rattled investors and pushed the S&P 500 to the brink of a bear market.
All three major indexes ended down more than 2 per cent on the day before the Christmas holiday. The S&P 500 ended down about 19.8 per cent from its September 20 closing high, just shy of the 20 per cent threshold commonly used to define a bear market.
Treasury Secretary Steven Mnuchin called top US bankers on Sunday amid the pullback in stocks. Investors also were grappling with a federal government shutdown and reports that President Donald Trump privately discussed the possibility of firing the Federal Reserve chairman.
"The headlines we are seeing today, yesterday, over the weekend are not great," said Vinay Pande, global head of trading strategies at UBS Global Wealth Management.
"The market is concerned about what is happening in DC In the face of a large correction in the market, there seems to be disarray and disunity, and people aren't speaking with one voice, which I think is discouraging to anybody in the market."
The Dow Jones Industrial Average on Monday fell 653.17 points, or 2.91 per cent, to 21,792.2, the S&P 500 lost 65.52 points, or 2.71 per cent, to 2,351.1 and the Nasdaq Composite dropped 140.08 points, or 2.21 per cent, to 6,192.92.
Last week, the S&P 500 suffered its biggest weekly percentage drop since August 2011, while the Dow had its biggest weekly drop since October 2008.
All 11 S&P 500 sectors ended in negative territory on Monday, meaning they were all in negative territory for the year.
Roughly three-quarters of the S&P 500 was trading in bear market territory.
All 30 components of the Dow industrials also finished in the red on Monday.
For the third straight day, more than 2,600 New York Stock Exchange- and Nasdaq-listed stocks were hitting 52-week lows, reflecting a depth of selling the market had not experienced since the height of the financial crisis a decade ago.
Mnuchin spoke on Sunday with the heads of the six largest US banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly".
But investors said his move to convene a call on Monday with the President's Working Group on Financial Markets, commonly known as the "Plunge Protection team", may have weighed on investors.
"When the Dow is down 600 points, it's hard to say it was a positive," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
"Although his intention was a very good one, the net feeling I think was, 'Is there a bigger problem that we don't know about?'" he said.
Aside from Mnuchin's move, Trump's budget director and chief of staff, Mick Mulvaney, on Sunday said a partial US government shutdown could continue to January 3, when the new congress convenes and Democrats take over the House of Representatives.
The stock market closed at 1pm local time ahead of Tuesday's Christmas holiday.
Given the extremely restricted liquidity at this time of year, Pande said, "any selling here will beget a very large decline".
About 5.9 billion shares changed hands in US exchanges, compared with the 8.9 billion-share daily average over the past 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by a 3.56-to-1 ratio; on Nasdaq, a 2.68-to-1 ratio favoured decliners.
The S&P 500 posted no new 52-week highs and 242 new lows; the Nasdaq Composite recorded five new highs and 837 new lows.
US stocks have risen modestly at the open, boosted by technology shares and an Amazon-led jump in retailers, helping pull the S&P 500 from the brink of bear market territory following punishing few sessions.
The technology sector, whose 9.2 per cent slump in the past four sessions was the steepest among the 11 major S&P sectors, rose 1.15 per cent on Wednesday.
Retailers gained, with the S&P 500 retailers sub-index jumping 1.75 per cent, after a Mastercard report showed US holiday sales were the strongest in six years. Amazon.com rose 2.22 per cent after reporting a "record-breaking" season.
Other members of the FAANG group, Facebook, Netflix and Alphabet, which has also been under pressure recently, rose between 0.4 per cent and 2.8 per cent.
"We expect a relief rally that may continue for a few days as end of the quarter window dressing ups the chances of bargain hunting," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 10.04am local time on Wednesday, the Dow Jones Industrial Average was up 35.68 points, or 0.16 per cent, at 21,827.88, a day after the Christmas holiday.
The S&P 500 was up 9.05 points, or 0.38 per cent, at 2,360.15 and the Nasdaq Composite was up 67.39 points, or 1.09 per cent, at 6,260.30.
But after rising more than 1 per cent shortly after the start, the gains started fading.
The S&P has lost 7.7 per cent in the past four sessions, ending Monday at a 20-month low and 19.8 per cent below its all-time closing high, just shy of the 20-per cent threshold that commonly defines a bear market. Roughly three-quarters of the S&P 500 stocks are already in the bear market territory.
The Dow is off 18.9 per cent from its closing high, while the Nasdaq is already in bear market along with the Dow Jones Transport Average and the small-cap stocks.
"The 'Bear Grip' is feeding on itself as Trump continues to spread uneasiness," said Cardillo.
President Donald Trump said on Tuesday the partial shutdown of the US federal government, which has entered the fifth day, will last until his demand for funds to build a wall on the US-Mexico border is met.
The political impasse over the funding bill and the recent unexpected departure of the US defence chief have added to investor worries that include US-China trade tensions and other geopolitical events crimping global growth and corporate profit.
Trump has said the Federal Reserve is the "only problem" for the US economy, repeatedly criticising the central bank for raising interest rates. He hit out at the Fed again on Tuesday, but expressed confidence in Treasury Secretary Steven Mnuchin.
Mnuchin on Monday held a call with US regulators to discuss plunging US stock markets. The call did more to rattle markets than to assure them and all three major US stock indexes ended down more than 2 per cent on the day.
The S&P and the Dow have fallen about 12 per cent for the year, while the Nasdaq has shed 10 per cent, with just four more trading sessions left to wrap up the year.
Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and a 2.15-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 106 new lows, while the Nasdaq recorded three new highs and 207 new lows.
Source: 9 Finance
I'm putting you all in detox mode this morning with a Fruit and Acai Bowl. I want you to drink plenty of water today.
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