Asia: Asian markets sluggish start largely ignoring Western moves. Overnight Italian banks shone on well received capital raising from UniCredit. DOW closes in on 20,000. Energy led in a delayed reaction to weekend Oil moves and a report by the IEA says if production cuts happen it could wipe out the Oil surplus in the market. Energy and Tech led with FAANGs rebounding +2%. DXY steady and VIX slightly higher. FOMC decision day and rate hike a given. US2yr closes at a 6-year high. US Retail Sales and IP data later today. Nikkei -0.2% and some commentators calling a pause in recent Index run as Index has erased losses for 2016. USDJPY 115.16 remains steady and Utilities outperform. Japan casino bill to be voted on later today, but has already passed an Upper House legislative panel. Shanghai -0.1% with Banks and Energy outperforming. Southbound flows turning +ive again and targeting Chinese Banks. HK +0.6% with Energy sharply higher. Tencent and China Mobile +1.5% bouncing off Demark sell exhaustions. Sunny Optical 2382 HK -3% chart is breaking down, and one of its peer’s Q Tech has just issued a ton of shares for capacity expansion, may also affect Largan? Taiwan, flat and Insurers see a little profit taking. TSMC flat but our technical gurus see upside potential in the charts. King Yuan +1% and technically right at breakout of the 5-month downtrend.Korea -0.1% with LG group erasing yesterday’s gains. Hynix +2% following SOX. Currencies unchanged. Gold $1160 and Oil $52.31 Best Sectors Energy, Utilities and Internet. Worst Sectors Autos, Steel and Property.
U.S Equities: Major U.S. stock indexes set records again Tuesday as energy companies continued to climb following international deals that will cut oil production. Big-name technology companies like Apple and IBM also traded higher as the Dow Jones industrial average closed above 19,900 for the first time. It was another set of records for the main US Indices as Energy (+1.27%) and Tech (+1.23%) led markets higher. Industrials and Materials were the only two sectors in the red. Commodities, Currencies, Treasuries, and the VIX finished little changed. The FED meets tomorrow and it’s a virtual certainty that they raise rates by 25bps. Nine of 11 S&P 500 industry groups rose, with industrial and materials shares down no more than 0.2%. Tech companies up 1.3%, with gains of at least 2.1% in Facebook Inc, Intel Corp. Red Hat Inc. CA Inc. and Seagate Technology Plc. High-dividend groups including phone and utility companies gained at least 0.6%; consumer staples reversed earlier losses to add 0.4%
Oil: Rubber’s rally is dwarfing the gain in crude. While OPEC’s historic deal to cut output for the first time in eight years has prompted headline-grabbing gains for oil, an agreement by a much less famous producer group has helped deliver a bigger advance for rubber. A February deal by Thailand, Indonesia and Malaysia, which together produce more than 60 % of the world’s natural rubber, to cut supply sparked a rally that’s been aided by adverse weather conditions, surging truck sales in China and the plunging yen.
Gold: traded near a 10-month low before an interest rate decision from the Federal Reserve, with investors expecting policy makers led by Chair Janet Yellen to deliver the central bank’s first hike of the year just as U.S. equities power to records.
Metals: Exports from the world’s second-largest copper mine in Indonesia are under threat as a government ban on overseas concentrate shipments is scheduled to come into force from the middle of January.