The Santa Rally may be up on us as markets have rallied strongly this afternoon, rebounding after heavy losses on Friday. Where we have lacked data during the session we have managed to make up for in general festive good will as markets have rallied from the get go this morning. Commodities have again been in focus as the fall in oil prices continued, however it hasn’t dampened spirits with markets seemingly prepared to rally regardless today.
We have now slipped into the Christmas week with volume falling off a cliff, however with the fall in volume comes the pickup in volatility and that has happened today, with some big moves seen in the major indices as well as Gold prices and the US Dollar. As the week moves on and volume fall more and more the markets will be subject to heavy position keeping and profit taking so we can expect more in the way of big point movements as traders will close out positions for the end of the year.
Today’s session has EURUSD break back above the key upside level at 1.09 but with the dollar weakness came a selloff in stocks towards the end of the session. The FTSE was boosted by Glencore (L:GLEN) again as the miner continued to post strong gains after what has been a tumultuous last 3 months. However the big news on the FTSE was from ITV (L:ITV) as the company was boosted almost 4% on the back rumours that a potential takeover was in the offing.
Interest seems to be coming from across the pond in the form of huge broadcaster Comcast, the owner of NBC, there would be a long way to go if a potential deal was on the table. Liberty Global (O:LBTYA) has slowly been building a stake in ITV and the owner of Virgin Media and now ITV’s largest shareholder could well have something to say about a potential deal. ITV shares have been performing well for the year despite a blip a few months back.
Overall we have seen volume drop but volatility pick up as expected, tomorrow sees more in the way of economic data but we could well be looking at the same story as the week runs on. Gain its going to be the commodity story if anything that could kick Santa off his sleigh so we must keep an eye on the oil price. The whole year the fall has taken us by surprise and it would be foolish to think the price couldn’t dip lower in the last couple of weeks of the year.