European update – Black Friday discounts galore

Are stocks the real bargain on Black Friday this year?

US equity markets are expected to open slightly lower following the Thanksgiving bank holiday, with trading likely to be fairly light heading into the weekend.

Whether it’s a case of recovering from the previous days celebrations or taking advantage of the deep discounts in store and online, activity in the US is likely to be more muted on the final trading day of the week. And who knows, maybe after a day of grabbing bargains, some of that Black Friday mentality may rub off investors with many stocks now trading at a deep discount themselves compared to a couple of months ago.

We’re not quite seeing that rub off on the markets just yet though with US futures trading in the red but we’re heading into a very interesting time of year and they may well now be primed for a so-called Santa rally as all the festive good will finds its way onto Wall Street.

Two Brexit steps forward, one Italian step back

Europe has found itself at the centre of much of the recent news flow, with Brexit making positive strides ahead of this weekend’s EU summit – at which leaders are expected to sign off on the exit agreement – and Rome continuing on a collision course with Brussels over its budget.

GBP/USD – Pound dips as Brexit drama continues

Eurozone PMIs disappoint, weighing on euro

This morning though it’s the PMI readings that have provided the disappointment, with numbers from Germany, France and the eurozone as a whole disappointing across the board and weighing on the euro. While the slowdown in the region isn’t new and is unlikely to deter the ECB from ending QE in December, it is increasingly worrying that the numbers continue to deteriorate and could threaten next year’s rate hike.

Bargains to be found in oil and crypto?

Black Friday deals are not just confined to retail or stock markets it seems, with oil and cryptocurrencies – two things not often found in the same sentence – both experiencing considerable sell-offs in recent weeks and very much trading at a discount to early October levels.

Oil remains under pressure despite noises from some OPEC countries, most notably Saudi Arabia, about another possible coordinated production cut at the next meeting in two weeks. I do wonder how much lower traders will push it given how likely it is that members will follow through on these threats. I wonder whether we may be trading at the lower end and the price drop may be a little overdone.

The same can’t be said for crypto though which in its nature is very volatile and prone to wild swings. This time last year we were closing in on a high of close to $20,000 in bitcoin, something many said was a bubble waiting to burst – how right they were with it now trading almost 80% off those highs. I still see plenty of scope for more downside here given how much this has proven to be a sentiment driven market, not to mention the fact that even now it’s up almost 350% since January last year. In any other market, that would be considered frothy at the very least.

European open – Big weekend ahead for Brexit

For a look at all of today’s economic events, check out our economic calendar.

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