Market Update: Possible US budget deal in Congress – 11.12.2013

Source: Hensderson Global Investors

Wall Street stocks finished lower yesterday with both the Dow Jones and the S&P 500 0.3% lower. After the market’s close, there was news of a possible budget deal in Congress, which is set to go before the House and Senate for approval. In stock news, Twitter shares rose 6%, hitting a record high, after a spate of product announcements that could boost the social media company’s revenue prospects. Gold stocks were boosted as the precious metal reached its highest level in several weeks due to a weaker dollar. Barrick Gold gained 5.4%, Goldcorp was up 3.4% while Kinross Gold rose 5.6%.

Asian equities were generally lower due to nervousness at the prospect of a December Fed taper. If Congress passes the US budget deal over the next few days, the probability of a taper next week increases as a result of lower fiscal uncertainty (and higher spending) over the next two years. The Nikkei was down -0.7% while the Hang Seng fell -1.3%.

European bourses are mainly unchanged this morning with the FTSE 100 down 0.1% and the FTSE Eurofirst 300 flat. Imagination Technologies slumped 15% after reporting lower profits and warned of lower growth in its key smartphone market. Spain’s Inditex is 1% higher after revealing group sales were up 5% and sales rose 10% in the first six weeks of the fourth quarter.