Markets around the world are off to a roaring start with traders returning from holidays in a good mood and optimistic about 2017.
Some markets in europe were open Monday and posted 1%+ gains and this positive momentum has continued around the world. The Hang Seng gained 0.7% while Australia rallied 1.2%. The FTSE is up 0.4% while the Dax is holding steady. US index futures are up 0.8%.
In addition to the usual New Year’s Rally enthusiasm, markets are being propelled higher by positive manufacturing PMI reports for the UK and China and a positive employment report for Germany. Signs of improvement in China are also boosting commodities with copper up 1.0% and crude oil up 2.3%. Crude is also benefitting from anticipation of production cuts coming this month from OPEC and Russia with Kuwait apparently already starting to deliver on its promises.
Markets in the US and Canada may remain active through manufacturing PMI reports and US construction spending later this morning.
While 2017 appears to be off to a strong start it remains to be seen how long the party can last. Germany has already flattened out although the CAC and IBEX are stil climbing up 0.4% today. More importantly, the US Dollar remains strong gaining today against gold and JPY. This could present a big short-term headwind for US corporate earnings which could impact guidance as earnings reports come out later this month.
