Kristal Weekly Feed I 13th January 2020

Had a busy week? Missed out on the latest news in the financial world? Here’s a short summary of some major global headlines over the last week.

Positives

• The US Labor Report results in the dollar and stocks indexes reaching fresh highs
• Major Asian markets close higher this week

Negatives

• Renewed Middle-East tensions lead to stocks sliding from their record highs
• Gold has a volatile week – reaches seven-year high before falling

Now, for more detail.

Positives

1. The US Labor Report results in the dollar and stocks indexes reaching fresh highs

What You Should Know

On Friday, the US Labor Report highlighted that the job growth had slowed in December close to a 50-year low of 3.5 percent. Further, the Labor Department also reported an increase in non-farm payrolls that were keeping up with the growth of the population. Further, there was a drop in the yield on US government debt that kept in track with the country’s longest economic expansion in history. This led to the markets reaching fresh highs. The Dow Jones Industrial Average crossed the 29,000-mark for the first time. The S&P 500 Index climbed 0.20 percent and the Nasdaq Composite Index climbed 0.32 percent. The US Dollar also had its biggest weekly gain in over two months.

What You Should Look Out For

While the US-China trade war was leading to a lot of volatility in the market, the recent tensions between Iran and the US have made it more unpredictable. As the US economy strives to maintain its growth path despite the obstacles, investors will do well to keep a close watch on the updates surrounding these events to ensure that they are on the right side of the line.

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2. Major Asian markets close higher this week

What You Should Know

As the tensions between the US and Iran eased over the course of the week and the US markets reached fresh highs, major Asian markets found themselves in positive territories. Japan’s Nikkei 225 climbed 0.47 percent and Topix climbed 0.35 percent. South Korea’s Kospi climbed 0.91 percent and Taiwan’s Taiex climbed 0.45 percent. Also, Hong Kong’s Hang Seng Index climbed 0.19 percent.

What You Should Look Out For

With renewed tensions between Iran and the US, the market had already started rolling back the highs. Investors need to keep an eye open for developments around the US-Iran conflict and the trade agreement between China and the US to determine if the growth will continue as a trend.

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Negatives

1. Renewed Middle-East tensions lead to stocks sliding from their record highs

What You Should Know

While the positive US Labor Report had driven the market sentiment positive, renewed tensions between Iran and the US, led the dollar and equity markets to slide back from their record highs. Iran initiated a missile attack on the US troops this week that led to the US imposing sanctions on Iran. After the initial climb, the dollar fell from the four-week high against the Yen. The Dow Jones Industrial Average fell 0.36 percent, S&P 500 0.17 percent, and Nasdaq Composite fell 0.14 percent.

What You Should Look Out For

With worries about the conflict continuing for a longer term, the markets are treading carefully. Investors need to keep a close eye on the updates as they develop in the Middle East and the US-China trade negotiation to ensure that they make the right investment decisions.

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2. Gold has a volatile week – reaches seven-year high before falling

What You Should Know

Gold experienced a highly volatile week with prices reaching a seven-year high of $1613 per ounce and closing at a low of $1541 per ounce. This volatility was a direct outcome of the tensions between Iran and the US. Subsequently, as the leaders of both the countries declared that they won’t retaliate further, the markets gained composure and gold futures rose by $8.50 and fixed at $1562.80.

What You Should Look Out For

Although the de-escalation seems to have allayed the fears and the markets seem to be recovering, it will be prudent for investors to stick to the basics and focus on the fundamental economic data before making investing decisions.

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