Weekly comment M In the market’s opinion, a December interest rates raise by the FOMC is certain. In fact, this attitude is not unfounded – the latest macroeconomic data from the US once again confirmed the strength of the American economy. The readings of the annualized GDP growth (3.2%), the Chicago PMI (57.6 pts.) and the manufacturing PMI (54.1 pts.) turned out to be significantly higher than expected. What is more, data from the American labor market did not fail as well. The non-farm payrolls stood at 178K vs 175K projected and the unemployment rate amounted to 4.6% vs 4.9% expected. M Prime TFI  - December 5, 2016

Despite the facts that the American stock exchanges were closed on Thursday (Thanksgiving Day) and they were open shorter on Friday (Black Friday), their major indices ended last week in the green color – the DJI and the NASDAQ rose by 1.5% and the S&P500 increased by 1.4%. What is more, all of them reached their historical peaks. In Europe, the market sentiment was rather bullish as well. During the whole week, French CAC40 went up by 1%, German DAX soared by 0.3%, whereas British FTSE250 fell by 0.3%. Investors focused on the latest macroeconomic data readings, especially from the US. The dynamic of the durable goods orders stood at 4.8% m/m vs 1.5% expected.

Emotions related to the American elections subsided clearly. Nevertheless, most of major global stock indices ended last week in positive territory. In the US, the NASDAQ rose by 1.6%, the S&P500 soared by 0.8% and the DJI increased by 0.1%. In Europe, British FTSE250 took off by 1.2%, French CAC40 went up by 0.3% and German DAX fell by 0.03%. There were a lot of significant movements in the bond markets and the foreign exchange market. An increase in risk aversion contributed to the sell – off of the treasury bonds on the global market. In addition, during the speech in the American Congress Janet Yellen reiterated that the decision concerning the interest rates raise should be made in the near future.

The presidential election in the US was not only the highlight of the week – it was one of the most important events of the year. The choice of Donald Trump as the 45th President of the US was supposed to be this year’s black swan. Famous billionaire won the race for the White House, whereas there was not any panic in financial markets. Furthermore, last week brought significant increases of major global stock indices. In the US, the DJI took off by 5.4%, while the NASDAQ and the S&P500 went up by 3.8%. In Europe, German DAX rose by 4%, French CAC40 increased by 2.6% and British FTSE250 grew by 1%.

The past week was extremely interesting and full of market emotions. Investors focused on the FOMC meeting. As expected, the interest rates remained unchanged. However, the market consensus assumed that the Fed would tighten the monetary policy during the last meeting of the year - it will take place on the 13th and 14th of December. Moreover, investors’ attention was paid to the terminative race for the White House. Successive scandals involving Hilary Clinton led to the increase in support for Donald Trump in the latest polls. This had an adversely impact on the global market sentiment. During the whole week, the NASDAQ fell by 2.8%, the S&P500 decreased by 1.9% and the DJI went down by 1.5%. In Europe, German DAX declined by 4.1%, French CAC40 dropped by 3.8% and British FTSE250 fell by 2.1%.