Waiting for Dow to breach 20,000 is main focus in markets

AP News
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Posted: Dec 19, 2016 7:31 AM
Waiting for Dow to breach 20,000 is main focus in markets

LONDON (AP) — Global stock markets traded in fairly narrow ranges Monday with most investors monitoring whether the Dow Jones industrial average will finally breach the 20,000 mark for the first time after several near-misses.

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was up 0.1 percent at 7,020 while Germany's DAX was flat at 11,405. The CAC-40 in France was 0.2 percent lower at 4,825. U.S. stocks were poised for a similarly uninspiring open with Dow futures and the broader S&P 500 futures up 0.1 percent.

20,000 MARK: The Dow Jones index, which closed last week at 19,843.41, has made several attempts to break through the 20,000 mark but each time it's fallen just short. The index has rallied strongly since the election of Donald Trump as the next U.S. president amid hopes that the incoming administration will be kind to business and back more spending on such things as infrastructure.

ANALYST TAKE: "I would be surprised if we're not trading above 20,000 before the end of the year," said Craig Erlam, senior market analyst at OANDA. "The Trump rally has stalled a little in recent sessions but so far, I'm seeing few signs that we're going to see the year out on a negative note."

DRONE DISPUTE: One issue that's proved a bit of a dampener on stock markets heading into year-end has been China's seizure of a U.S. Navy unmanned underwater glider. China says it will return the device but President-elect Trump, who takes office in a month, tweeted China can keep it. The incident is making investors nervous as markets enter a week of holiday-thinned trading.

ANALYST INSIGHT: "It remains to be seen whether Trump will soften his tone when he moves to the White House," said Piotr Mays, a strategist at Rabobank. "Based on his previous remarks it is reasonable to assume that the relationship between the U.S. and China will be completely different under Trump's presidency, which may have serious implications for the markets due to potentially significant changes in global trade policies and geopolitical risk."

JAPAN POLICY: Investors are sitting tight as they watch for the outcome of the Bank of Japan's final monetary policy meeting of the year, which wraps up on Tuesday. Central bankers may revise their outlook for Asia's second biggest economy based on recent data, including import and export figures released Monday that showed a surplus for the third month in a row.

ASIAN SCORECARD: Japan's benchmark Nikkei 225 index slipped 0.1 percent to end at 19,391.60 while South Korea's Kospi edged 0.2 percent lower to 2,038.39. Hong Kong's Hang Seng shed 0.9 percent to 21,832.68 and the Shanghai Composite index dipped 0.2 percent to 3,118.08. Australia's S&P/ASX 200 rose 0.5 percent to 5,562.10.

CURRENCIES: The euro was down 0.2 percent at $1.0425 while the dollar dropped 0.5 percent to 117.36 yen.

ENERGY: Crude oil rose 18 cents to $52.08 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 17 cents to $55.38 a barrel in London.