Global Markets Mixed On Christmas Eve, Politics Weighs On Market, Slowing Growth Outlook Points To Bear Market

Asian Markets Were Mixed On Christmas Eve

Asian markets were mixed as traders around the world prepare for the Christmas Holiday. Most markets in the region were open the full day except for Australia which closed early in anticipation of Santa Claus arrival. The Australian ASX led the region with an advance near 0.50% and was closely followed by the Shang Hai Composite’s 0.43% gain.

While global politics and fear of slowing growth are weighing on equities around the world Chinese markets were supported on Monday by word of high-level talks between the US and China. The Chinese Ministry of Commerce posted a message on its blog to the effect US/China trade talks had occurred over the past week between vice-ministerial level officials. No concrete developments were reported but the Ministry of Commerce does day deep exchange was made, new progress was achieved, and there are plans for more calls as the world’s largest trading nations work on a lasting agreement.

European Markets Mixed In Shortened Holiday Session

European markets were mostly lower in the shortened holiday session as traders and investors get ready for a day of family and friends. While most indices posted small losses the CAC fell -1.47% while the German DAX was able to post a small gain in today’s thinly-traded session.

Shares of Delivery Hero were the winners in Monday’s trade, up 10% on merger news. The company, which operates in several major EU markets, sold its German unit to a Dutch competitor for $1.1 billion. The deal will allow Takeway.com to operate on a much larger scale than it has been and without competition from DeliveryHero that has cost both companies millions in advertising and marketing dollars.

Shares of BMW fell on news South Korea had issued a fine against the company. The fine, about $9.96 million, is in response to allegations BMW has not been timely in its recall procedures and created a hazard for consumers. One of the allegations is BMW has been concealing the possibility of engine fires.

Slowing Growth Outlook Points To Bear Market, Or Does It?

US markets were indicated lower in early Monday trading but the outlook for the holiday week is not positive. Slowing global growth outlook, reinforced by the FOMC’s caution over growth risks, as traders and investors fleeing to cash. The problem is that the move is driven by fear and a market preparing for the worst despite outlook for 2.5% to 3.0% GDP growth in 2019 (for the US).

Along with the FOMC, trade disputes with China, a US government shutdown, and political uncertainty are pressuring the market lower. On the political front, US Secretary of Defense James Mattis is quitting his position weeks ahead of schedule in response to conflicts of opinion with President Trump. Trump is planning to reduce US forces in Syria and Afghanistan despite the view fro Mattis and the military community it would take several more years of committed fighting to fully defeat ISIS and the Taliban.

Traders should be cautious this week. The market will reopen on Wednesday but trading volumes will be light until after New Year’s Day. Index action may be volatile, traders should be wary of exaggerated movements and the possibility of whipsaw and snap-back trading action