Stocks in decline as holiday season sets off

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By Simeon87 (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons
By Simeon87 (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

European stock markets are trading lower with the exception of the DAX which is holding at 0.2% higher. In London utilities and a mixture of consumer orientated companies are sliding, mainly those dependent on the domestic UK market. Miners have gained ground but not enough to balance out the declines.

US government shutdown set to dominate American markets

The standoff between President Trump and Congress over the financing of the Mexican Wall seems set to continue into January with the US government unable to pass any laws in the near future. All of the markets are slightly distorted today because of lower than usual volumes and a short trading day and although US stock futures are nudging higher at present, there is likely to be a cooling off once markets restart in full operational mode.

Asian stocks are in a wait-and-see mode ahead of the holiday season but news from China is preparing the ground for a post-holiday bounce. One of the more positive signs has been China’s plan to look into improving a domestic law that will address one of the USA’s key issues about safeguarding intellectual property.

Dollar fragile, pound marginally stronger

The US government shutdown is not doing the greenback any favours and the currency is losing ground across the board. Trump’s plan to fire the chair of the Federal Reserve also rattled the market but despite his intentions, this is unlikely to happen given that he doesn’t have the authority to dismiss the Fed chair. However, the acrimony will no doubt leave a trace on some asset prices as it will mean likely future friction between Trump and the central bank.

Oil prices inched higher this morning but then slipped into negative territory. Given that trade volumes are far thinner than usual the oil price could fluctuate more than usual before the UK close today but it would be too early to draw any conclusions about the fundamentals of oil supply based on the price changes during holiday trade.