Market Review By TraderXP:
Gold rose in Tokyo for the first time in four days, as the incoming Prime Minister Shinzo Abe, the pressure on the central bank to raise its inflation target, increasing demand for bullion as a safe haven.
Gold prices rose 6.4 percent this year, heading for the 12th straight annual gain.
"Gold has been supported in part by news of inflation target in Japan," said Hiroyuki Kikukawa, general manager of research IDOSecurities company in Japan, a weaker yen also supported TOCOM futures, he said.
Market News
Start the "Santa Claus rally" dampened "cliff" worried
U.S. stocks edged lower on Monday, as a warning about the potential volatility due to worries about the U.S. "financial cliff" dampened enthusiasm in the beginning of the season strong during the campaign.
Investors are betting Congress will reach an agreement to prevent the majority of austerity measures due to come into force from the beginning of the year ofnext. This led to a better year for stocks since the financial crisis rebound. However, these benefits can be quickly restored if a deal is not reached soon.
S & P 500 index posted its biggest drop in more than a month on Friday, as the Republican plan to prevent breakage - $ 600 billion in tax increases and spending cuts, it may affect the U.S. economy into recession - failed to gain traction on Thursday evening.
Sharp moves like that highlight both titles fromWashington can Whipsaw markets, especially in thinly traded period during the Christmas holidays.
However, with the S & P 500 rose 0.7 percent in December, and on the way to its strongest month since September, some analysts predict that stocks will find their position in the seasonal market known as the "Santa Claus rally."
"Right now, we have seen some very constructive action in the market, so I think that bodes well for this to be a positive seasonal period" Santa "in the next seven days," said Ari Wald, a technical analyst at PrinceRidge.
He noted all time high in NYSE advance decline line, which compares the promotion and inventory reduction, and provide an active part in the rally from the lows of November.
"Prototypes are buying opportunities," said Wald. "There was a really great participation at this step, many small and mid-cap stocks is behaving well, pushing to the top, we can see some good leadership from the onset of market sectors, as well."
The high degree of advancement in a decrease of the issues shows that there is broad participation in the securities market.
Seasonality Santa covering the past five years and tradingdays first two new year. Since 1928, S & P 500 by an average increase of 1.8 percent over this period increased, and 79 percent of the time, according to PrinceRidge.
Index Dow Jones Industrial Average fell 51.76 points, or 0.39 percent, to 13,139.08. 500 Index Standard & Poor fell 3.49 points, or 0.24 percent, to 1,426.66. The Nasdaq Composite Index lost 8.41 points, or 0.28 percent, to 3,012.60.
S & P 500 rose more than 13 percent for theyear, recovering most of the losses incurred as a result of the U.S. elections. The annual increase would be the best since 2009.
Some U.S. lawmakers have expressed concern on Sunday the country will go to the rock, as some Republicans have said that was the goal of President Barack Obama. Negotiations have stalled with Obama and House Speaker John Boehner in Washington for the holidays.
"It does seem that we are still using the same drift of the same thing we've had the last couple of weeks - Discussion of 'The Rock'," said Nick Scheumann, wealth partner Hefty Wealth Partners in Auburn, Indiana.
"You can not trade on the fact that you do not know and we do not really know what they're going to do," he said.
Congress is expected to return to Washington next Thursday, as U.S. President Barack Obama returned from a trip to Hawaii. As the deadline approaches, the deal "bung", to be the most likely outcome of any negotiations.
Trading volume was muted, with the U.S. stock marketsclosing at 1 pm (1800 GMT) in front of the Nativity on Tuesday.
In addition, a number of European markets operate on a shortened session, with other markets closed.
U.S. retailers may not see a surge in sales of thisweekend as ho-hum discounts and fears of imminent tax increases and cuts in government spending give Americans less reason to open their wallets in the last few days before Christmas.
Aegerion Pharmaceuticals Inc said the U.S. Food and Drug Administration approved Juxtapid capsules in patients with homozygous familial hypercholesterolemia, but it will be done after approval study to test the long-term safety and effectiveness. Shares fell 1.8 percent to $ 25.25.
Herbalife Ltd dipped 4.4 percent to $ 26.06 after the company said it expects to exceed its previously announced repurchase authorization and guidance retained Moelis and Company as a strategic advisor. Reducing supply warehouse on the way to ninth straight decline.
Yum Brands Inc advanced 1.8 percent to $ 65.01 after the Shanghai food safety authorities said that the level of antibiotics and steroids in the company's KFC chicken was within the official limits. Reuters.com
Currencies
Yen hits 20-month low amid fears the Bank of Japan, the financial cliff buoys dollar
Yen hit a 20-month low against the dollar on Tuesday as members of the Japanese prime minister has stepped up pressure on the Bank of Japan (BOJ) to loose monetary policy, while the dollar maintained uncertainty about the U.S. budget negotiations.
The dollar rose to a height of 84.965 in early Asian trade, its highest level since April 2011, before giving up the benefits of the last stand at 84.84 yen in thin trade Christmas. Many shopping centers are closed.
Shinzo Abe, who is going to be prime minister onWednesday, renewed pressure on the Bank of Japan to a higher and more explicit inflation.
Abe also plans to revise the law to guarantee the independence of the Bank of Japan, if his demand mandatory 2 percent inflation rate - double its current goal - is not met in January.
He said he would meet someone who agrees with his views on the need to alleviate the monetary bolder succeed Bank of Japan Governor Masaaki Shirakawa, when his term expires in April next year.
While the specter of a radical change of policy of the Bank of Japan is likely to keep the yen under pressure, technical analysts say that the dollar has clearly overcome the 200-week moving average around 84.95 yen to support further growth.
"While we have no reason to buy the yen now, there's no doubt the fall was due to the yen speculators and expectations," said Makoto Noji, senior strategist at SMBC Nikko Securities.
"But in the end, all that the inflation target is the Bank of Japan, there is not much, the Bank of Japan can do, other than buying more government debt easing. Thus, at some point, traders will take money from this (yen sales) trade, "he added.
The greenback was also broad support against riskier currencies like the U.S. politicians struggle to reach an agreement to avoid a $ 6billion "financial cliff spending cuts and tax increases, starting in January.
Some U.S. lawmakers have expressed concern on Sunday that the country will go over the cliff, perhaps, sending the world's largest economy into recession, though many market participants were hoping for a 11-hour deal ahead at the end of the year period.
The dollar index was 79.659, near its 10-day high of 79.71 hit on Monday.
As the dollar gains, the euro traded at $ 1.3181, compared with its 7 1/2-month high of $ 1.33085 hit last week, but not much has changed on that day.
The Australian dollar also stayed near one-month low hit on Monday, receiving $ 1.0367, just above the Monday low of $ 1.0357. Reuters.com
