My advice, never give people advice PG Wodehouse

Thanksgiving is traditionally an uneventful week for capital markets. However, it has taken investors by surprise once or twice in history. The adage when the U.S. sneezes the rest of the world catches a cold could be slightly amended. When the U.S. rests the rest of the world goes to sleep. There have been some economic highlights this week, the latest estimate for third-quarter US GDP came in slightly ahead of expectations. The latest eurozone data continues to suggest a modest economic recovery is continuing. M1 money supply has grown year on year and E.C. sentiment, still down, but there was something of a rebound in November in the eurozone. The positive developments on a Brexit outcome and the hope Boris can manage an overall majority in the election, likewise helping boost sentiment across the U.K. according to the E.C. economic survey.

Not even the announcement that Trump had signed a law supporting the Hong Kong protesters seemed to disturb investors too much. The Chinese reacted by calling the Bill as “full of arrogance and prejudice”. Mr Trump, arrogant, surely not. The U.S. ambassador was summoned in front of Beijing and told to tell Washington to stop interfering. Whether this Bill will have any impact on trade talks, time will tell.

Thanksgiving last year was a different story to this year when optimism for the coming months seems high. This time last year, the U.S. stock market had its largest one day fall since 1931, according to Barron’s article. The S&P 500 is 19pct higher today than it was this time last year. The CNN composite sentiment indicator was rooted in fear territory, once again reiterating Warren Buffet’s view, when others get fearful, time to get greedy. This year is close to extreme greed. We have said before that fear is a better buying signal than greed a selling one. Looks like the turkey will taste better this year.

Happy Thanksgiving