2:00 PM PT: Markets grind higher in quiet trading.
View previous commentaries.
Asian markets got a chance to react to Friday’s surprise PBOC rate cuts which were announced after the close there. Although the Japan market was closed for a holiday, the Shanghai Composite (+2.55%) and the Hang Seng Index (+1.95%) showed their approval.
The November German IFO business climate index rose 1.5 to 104.7 when expectations were for a decline. Components such as the current assessment and expectations were also stronger than expected. After opening higher, markets trimmed their gains when ECB Governing Council member Ewald Nowotny said that the ECB should wait to provide additional stimulus until they are better able to measure the effects of measures already taken.
US markets opened in record territory again and traded sideways on very light volume. 10-Year Note yields drifted lower, along with the US$, gold, and crude. This morning’s Markit PMI Service Flash for November came in at 56.3, below the consensus of 57.8 and below October’s reading. Backlog accumulation, employment growth, and business outlook all pointed to better results in the future. In the final hour, markets shook off any overriding concerns and finished with solid gains at new all-time highs.