Law Debenture investment trust gets boost from hydrogen

Saloni Sardana looks at recent developments in the Law Debenture investment trust, one of the six funds in MoneyWeek’s model investment trust portfolio.

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Market Spotlight: Trading The November NFP

NFP Up NextThe US labour reports for November are due today and will be the main data focus for the week. On the back of the Fed’s tapering announcement in November and with inflation and other indicators pointing higher, a positive reading today has the potential to ignite tapering expectations for December. However, given the uncertainty around the new COVID variant, it would likely take a very strong set of numbers to see USD trading sharply higher. Given that most health authorities warn it will take at least a few weeks to assess the severity of the Omicron, it seems reasonable to think that the Fed will look to refrain from further tightening. That is, of course, unless the data makes it very difficult not to.With the market looking for mid 500k on the NFP, a reading over 600k will be the best news for bulls. The unemployment rate is forecast to tick lower again, down to 4.5%. However, it would be a strong beta on the hourly earnings number that could really be interesting. If earnings are seen sharply higher, this might be the biggest incentive for the Fed to taper further this month and would likely see USD trading higher near term.Where to Trade US Labour Reports?USDCADThe rally in USDCAD has seen price trading up to just shy of the major 1.2885 – 1.2952 resistance zone. This is a huge band of resistance for the pair and a break higher here would open the way for a much fuller bullish reversal targeting 1.3079 initially and 1.3239 as a longer-term level (the ABCD completion level).

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-trading-the-november-nfp"
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How Much Will Omicron Overshadow Today's NFP Release?

COVID Uncertainty DominatesThe uncertainty around the recently announced Omicron COVID-variant has been well reflected in the price action we’ve seen across asset classes this week. While most leading indices remain broadly in the red for now the initial decline has yet to be advanced and, instead, we are seeing price moving in choppy consolidation mode as traders await further details on the new variant. Interestingly gold prices remain under pressure here suggesting that the asset is not the preferred safe haven of the moment, likely given US tightening expectations.Waiting On Further DetailsThe initial global reaction to Omicron has tempered somewhat in line with advice from scientists to “wait and see” with regard to how serious the new strain proves to be. So far, the only encouraging sign is that the new strain appears to lead to milder symptoms (less hospitalisations and deaths) which might mean that countries are able to avoid going into lockdown again (which was the key fear initially). However, should the new strain prove to be more deadly than it initially seems, this could quickly lead to fresh downside in risk sentiment.US Jobs In FocusAway from COVID, the focus today will be on the US jobs reports for November. The market is broadly expecting an improvement on the prior month. With most indicators having ticked higher recently, reflecting a pickup in activity, expectations are well primed for the release. However, it would likely take a strong beat here to significantly impact the Dollar higher against the COVID backdrop. If we do see USD trade higher today, however, this is likely to weigh on gold prices further in the near term.NFP Expected To ImproveIn terms of numbers then, the market is looking for the headline NFP to come in at 553k from 531k prior. Additionally, the unemployment rate is forecast to fall back to 4.5% from 4.6% prior while average hourly earnings are set to remain unchanged at 0.4%. Given the Fed’s focus on employment (and with inflation surging), a strong set of numbers today will sharpen the focus on December tightening. Alternatively, any disappointment today will likely add further uncertainty given the resurgence in COVID fears, likely sending USD lower near term.Technical ViewsDXYFor now, the Dollar index is holding in a tight band between the 95.61 and 96.46 levels. While support holds, the focus is on a continuation higher in the near term, resuming the bull move we saw over November. A break below that level, however, will turn the focus to 94.54 next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/how-much-will-omicron-overshadow-todays-nfp-release"
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Could the oil price hit $150 a barrel by 2023?

The oil price has fallen as a new strain of Covid brings fresh restrictions around the world. But in the long run it’s a different story, with some analysts predicting $150 a barrel. John Stepek looks at how likely that is.

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FOMO Friday: AUDJPY On The Rocks

COVID Fears ReturnAnother week winds down, bringing us just that bit closer to the end of the year. It’s been a week of uncertainty for most, given the return of COVID fears created by the Omicron variant. In markets, it’s been something of a tricky week as traders await further details on the new strain. This has created mostly choppy conditions, especially with the NFP sitting at the top of the week also. However, as always, there have been moves and there have been winners and losers. Talking with traders this week about the market action we’ve seen it seems the main focus has been on the more than 2% drop we’ve seen in AUDJPY. So, let’s take a look at what caused the move and, as ever, if you caught it? Well-done, if not? There’s always next week!What Caused the Move?The almost 200 pip drop in AUDJPY this week was a very clear cut move in response to the current news-flow we are seeing around the new COVID variant. Given AUD’s status as a risk currency (tied to commodity prices and global trade) and JPY’s safe-haven status (used as a store of value during times of uncertainty), AUDJPY was all but guaranteed to sell-off this week. In fact, the pair is often a great barometer for overall risk sentiment in the market as a result of the divergence between the two currencies.AUD Lower On Risk AversionSo, with risk assets under pressure this week over fresh COVID fears, AUD was seen trading lower. Fears that the virus will lead to a fresh global wave and, most importantly, potentially require a return to nation-wide lockdowns, has been a big blow to risk sentiment. Although the initial knee-jerk sell-off in risk assets has mostly abated for now, there is still the risk that should scientists confirm that the variant is more deadly than previous strains, selling will pick up pace again. While this uncertainty remains, AUD is likely to remain under pressure near term.JPY Safe Haven DemandSimilarly, this same uncertainty which is weighing on risk assets is instead driving demand into JPY as a result of safe-haven inflows. Given that the Fed recently began tapering and is expected to continue tightening, it seems that JPY is a preferred safe haven destination, over gold, currently, which is adding extra support. Again, unless there is a big shift in narrative around the new COVID variant, this dynamic is likely to continue, keeping AUDJPY under pressure near term.Technical ViewsAUDJPYThe sell-off in AUDJPY has seen the market breaking down below the 80.69 level this week. With both MACD and RSI firmly bearish, and with the retail community holding an almost 70% long position, there is plenty of room for the current sell off to continue towards 79.57 and 78.44 beyond.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/fomo-friday-audjpy-on-the-rocks"
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Investment Bank Outlook 03-12-2021

Credit AgricoleAsia overnightRecorded cases of omicron are showing a greater geographical dispersion with cases now being recorded in Malaysia and New York. Hawkish Fed speak continues with several members justifying the need for a faster tapering of asset purchases. China’s technology stocks fared poorly as both China and US officials are pressuring companies to delist from exchanges in the US. Asian bourses held up, however, and most were trading modestly higher at the time of writing. S&P 500 futures were trading flat. The USD was modestly stronger in the Asian session on the back of hawkish Fed speak. The Antipodean currencies were the worst performers in the G10 in the Asian session and the CAD the strongest performer.CitiEuropean OpenAdditional cases of Omicron were detected in the US, as reported by Reuters. On the back of that, we saw a slightly risk off tone during the start of Asian trading. However, initial knee-jerk reactions unwound as the session progressed, underscoring a lack of conviction and the presence of some jitters. NZD and AUD ticked lower, although they pared some of the losses later in the session. A similar theme in equities, where we saw S&P e-minis paring losses from -0.7% down to trade +0.1% . Oil ticked higher, although at a moderate pace in comparison to the volatility of late. THB reversed some losses to trade in the green, on-track to end its ten day losing streak.Markets were quiet ahead of NFP at 13:30 GMT. We will also sight Fedspeak ahead of the blackout period from Bullard at 14:15 GMT, prior to ISM Services Index at 15:00 GMT. CAD will see a set of job data at 13:30 GMT, with net change in employment being the most significant for markets. Over in the EM space, we will see TRY CPI (07:00 GMT) and BRL IP data (12:00 GMT).USD was flat in the Asian session, with UST also trading flat at the time of writing. Against the G10, USD was slightly stronger on the day.–Our UST trader Hideyuki Liu observes that treasuries rallied on the Omicron news led by intermediates, but flows were surprisingly one of better selling across the curve - from 2y to 30y by a variety of accounts. Perhaps finally wising up to all the Omicron news, treasuries ended up paring much of its gains as we head into the London open, with the front-end leading the weakness.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-03-12-2021"
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Ewan Markson Brown: the joy of small companies

Merryn talks to Ewan Markson-Brown of Crux Asset Management about why when it comes to emerging markets, he much prefers to invest in micro- and small-cap companies than the likes of Tencent and Alibaba

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Forget socialism – shareholder capitalism is delivering

Most "Millennials" think they would prefer to live in a socialist society. That's understandable. But while socialism promises everyone ownership and power, it has never actually delivered. Shareholder capitalism, on the other hand, does deliver.

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Power your portfolio with renewable-energy stocks

The COP26 conference showed that fossil fuels are on their way out. This is a big opportunity for companies developing the equipment and technology that will make green energy viable, says Matthew Partridge

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Lithium price embarks on a long boom

Rising demand for electric vehicles has driven the lithium price in China up by 276% since the start of the year to $30,940 a tonne

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Bubbles grow in global property markets as house prices continue to rise

House prices grew by 6% in the year to mid-2021 in 25 global cities, with the German property market in particular showing signs of overheating.

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Stockmarkets are trading on thin ice as Omicron variant spreads

The Omicron variant of Covid-19 is driving stockmarkets down, with travel and leisure stocks particularly badly hit.

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Share tips of the week – 3 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.

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In praise of capitalism, the noble path that leads to profits

Contrary to modern myth, profits are not always a result of greed, but a signal of virtue. Stuart Watkins reports.

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