Market Commentary-January 4

Only 3 days into the New Year and it is pretty much an old but relevant story. American stock market had the ugliest December on history ever since the Great Depression, and stock markets throughout the world finished out 2018 falling into the worst type of year since the financial panic of 2008.

U.S. cash market has been once again expected to open much lower as they continued to wait to learn more about the Apple sales cautionary announcement. Stock shares have been halted during early trading following Apple's CEO Tim Cook’s letter though opened lower 8% on reopening. 

Sentiment continued to be massive for a great deal of the trading session with bounces quite short and also sharp however denied. The Institute for Supply Management (ISM) data released only added onto the slowdown worries and as a consequence, found sizeable drops forTreasury Bond yields and copper.

The cash market has swiftly re-priced the forward yield curve with at this point no interest hikes scheduled for 2019. Important to note the yield spread between the two - US Treasuries and Eurozone government bonds - as being a definite indication of precisely what the market recognizes as an essential safety!

The Nasdaq was down 214 points or 3.3%, DJI finished the day off 616 points or 2.6%, and S&P500 62 points or minus 2.5%. Today we'll hear the next installment coming from the Federal Reserve and likewise know the very last US employment numbers to close rocky 2018.

The US Dollar has been the figure of interest overnight for Asia-Pacific market given it surged versus the Euro Dollar, Sterling, Aussie Dollar, and Turkish Lira, though saw short-covering stops brought on the Japanese Yen.

The word of caution been told by Apple over its China sales outlook, and developing worries for global growth brought about the sudden safe-haven flurry into the Japanese Yen.

Eurozone as well been inflicted by the Apple announcement, as technology stocks have been sold as well as global growth worries spread.

Both the German DAX and French CAC dropped 1.5%, and the sole thing that made more comfortable for the U.K. FTSE’s index decline with minus 0.6% was the minus 0.5% damage on the currency.

Never the less it is worthy of keeping an eye on currency actions versus the domestic equity markets. 

Consequently, our forecast was/is that Gold continues to be the uttermost safe haven asset. We had forecasted while back that prices would bottom out at approximately $1140 (actual $1160) per ounce.

We now have Gold flirting with $1300 prices per ounce, once Gold solidifies higher than $1400; thus a sharp surge toward $2000 is inevitable.

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