Spreadex Market Analysis: S&P 500, Dow On Course For Huge Gains

AM Analysis – “Asian stocks traded in positive territory” – Lee Mumford
Asian stocks traded in positive territory for a second night as investors await a conclusion from Chinese policy maker’s four-day meeting. The secret policy meeting is expected to set the economic and political agenda for the next decade after the world’s second largest economy struggles to sustain the rapid growth it witnessed during the last three decades.

The outlook on the dollar remains upbeat with many expecting the Fed might soon taper its $85 billion-a-month bond-buying program. The Euro remained unchanged after bouncing 0.3 percent on Monday, ending two days of losses after the ECB unexpectedly cut interest rates.

UK inflation figures which are due later this morning are expected to show a fall in the rate of inflation to a six-month low. The fall is likely to be linked to easing petrol prices which is likely to push down CPI to around 2.5%. The data comes 24 hours ahead of the Bank of England’s UK economic report due tomorrow.

PM Analysis – “S&P 500 and the DOW average both touched records over the last week” – Max Cohen

The S&P 500 and the Dow average have both touched records over the last week after the Federal Reserve refrained from tapering its $85 billion in bond purchases per month and economic reports and earnings released beat forecasts. In fact, some 75 percent of the 450 S&P 500 companies that have reported earnings so far this period have beaten analysts’ estimates.

However, U.S stock index futures have retreated during today’s session as investors take a breather and calls for a correction strengthen. What must be kept in mind is that traditionally, the markets tend to go up in November and December. With the S&P 500 surging 24 percent already this year, the benchmark gauge is on course for its biggest gain since 2003.

Whilst the FTSE 100 is trading lower as we prepare for the U.S open, the index is still within striking distance of its recent high and there is little in the current technical picture to suggest that it is about to fall away. Additionally, British inflation unexpectedly dropped to its lowest rate for more than a year in October, falling to an annual rate of 2.2 percent in October from 2.7 percent in September.

[The original articles by Spreadex can be found here.]

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