Market Update & Important Indicators:
The Dow Jones Industrial Average slipped overnight as reporting season continues in U.S. equity markets. Financial shares have propelled a post-election rally in U.S. stocks that has carried indexes to new highs and the Dow Jones Industrial Average within reach of 20000. Investors have struck a cautious tone ahead of President-elect Donald Trump taking office Friday, unwinding some risk-driven trades that have dominated since the U.S. election on Nov. 8. While markets initially focused on Mr. Trump's plans to slash taxes and regulations and boost infrastructure spending, the president-elect's rhetoric against free trade has also worried m any analysts. Investors are now waiting for further clarity on such policies, as well as corporate earnings, to decide whether growth and inflation will come through, or whether markets have gotten ahead of themselves after the election.
European stocks wrapped up trading with a tepid gain during an up-and-down session, as investors sifted through corporate updates. The Stoxx Europe 600 ended 0.2% higher at 363.07, after drifting in and out of losses throughout the session. Among major indexes, Germany's DAX 30 moved up 0.5% to 11,599.39 and France's CAC 40 dropped 0.1% to close at 4,853.40. The U.K.'s FTSE 100 edged up 0.4% to 7,247.61. The London index on Tuesday slid 1.5%, its worst performance since June 27, according to FactSet data.
Asian markets lacked direction Wednesday as traders grappled with the uncertainties about the policies of U.S. President-elect Donald Trump, whose inauguration looms. Asian traders are now focused on how Mr. Trump tackles China in his first week of presidency. Japan's Nikkei turned positive after spending most of the morning in the red, closing up 0.4%. Compounding this, the yen fell further during Asian trade and Korea's Kospi closed down 0.1%. In an interview Friday with The Wall Street Journal, Mr. Trump said the U.S. dollar was already too strong, in part because China holds down its currency, the yuan.
A further drop in financial stocks Wednesday weighed on Australia's equity market, which finished down as uncertainty grew over the possible impact from coming U.S. policies in the run-up to President-elect Donald Trump's inauguration. The weakness locally tracked the reversal of post-election trades on Wall Street overnight, with U.S. bank stocks retreating and the dollar sliding to a one-month low. Australian banks have risen with optimism, surging about 20% before stumbling in recent sessions as analysts questioned valuations given a backdrop of expected sluggish revenue growth at home. Falling for a second straight day, the S&P/ASX 200 ended down 20.6 points, or 0.4%, to 5678.8. The nation's four biggest banks, among the largest stocks in the ASX 200, collectively knocked more than 12 points off the index. That offset gains among energy stocks as oil prices ticked higher in Asia on heightened optimism that declining output in major producing nations will rebalance the market.
Copper for delivery in three months was up 0.3% at $5,769/t on the London Metal Exchange. Other base metals were mainly higher on Wednesday. Aluminium prices rose 2.0% at 1,839/t, lead prices rose 0.6% at 2,307/t, nickel prices rose 0.1% at 10,123/t and zinc prices rose 2.1% at 2,759. Tin bucked the trend, falling 0.1% at 21,096/t.
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