Despite US markets being closed in observance of Washington’s birthday, S&P futures spiked during overnight trading, reaching new all time highs before fading some of the gains. Both Asian and European markets traded modestly higher after paring early gains. The U. S. dollar traded in a tight range ahead of a busy week for Federal Reserve events, while the pound rallied the most in more than two weeks ahead of a House of Lords Brexit debate, while South Africa’s rand fell on political turmoil. Oil advanced for a third day and spot gold rose for the fourth session in five.
The relatively benign moves this morning follow what was also a fairly tepid end to the week on Friday in markets. Equity markets in the US did however manage to eke out another small gain with the S&P 500 finishing 0.17% following a late bounce into the close. That means it has closed up in 11 of the last 13 trading sessions although at the same time has now gone 49 consecutive sessions without closing with a move up or down by more than 1%.
Global volumes have been light with U. S. markets closed for the Presidents Day holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent and back toward a 19-month peak reached last week. Shanghai stocks added 0.9% and expectations of solid economic growth in China kept commodities such as copper and iron ore well bid. Japan’s Nikkei closed flat after domestic data showed exports disappointed in January even as imports outpaced forecasts.
With U. S. bond and stock markets shut on Monday for Presidents’ Day, investors are watching developments in Europe. Political risk is in focus after a poll showed public approval for German Chancellor Angela Merkel’s ruling party fell behind the Social Democrats for the first time under her leadership. And in the U. K., some members of the parliament’s upper chamber will seek changes to the draft law that will allow the government to trigger a departure from the EU when it is discussed by the Lords on Monday, Bloomberg reported.
The Stoxx Europ 600 rose and U. S. futures pointed higher even as Unilever slumped after Kraft Heinz withdrew a $143 billion takeover bid. Shares in Unilever fell 6.7 percent; stock remains above level from before Kraft offer was revealed last week. Trading in Kraft and its erstwhile target remains in focus on the back of Friday’s surge in both stocks. People familiar with the talks at the weekend said 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. decided Unilever’s negative response made a friendly transaction impossible.
This post was published at Zero Hedge on Feb 20, 2017.