Holiday closings make it hard to judge global market reaction to the end of U.S. fiscal cliff negotiations
To go off the cliff or not to go off the cliff? We’ll know by the end of today.
What we won’t know, because of the timing of various holidays, is how global financial markets will react. At least not immediately.
Stocks in China and Japan have spent much of the run-up to the U.S. fiscal cliff moving ahead on promises of big domestic stimulus efforts from the governments in Beijing and Tokyo.
Can stocks in those markets stay focused on those domestic plans? Or will the results of today’s U.S. fiscal cliff negotiations set the tone for a rally or sell off? The staggered spacing of holiday closings will make it hard for markets to generate one of those global waves of buying or selling that can follow the rising of the sun around the world when traders in New York arrive at work already aware of what has happened in Tokyo or London.
In Tokyo we won’t know for days since the markets there are closed on January 1 for New Year’s Day, January 2 for Banking Holiday #1 and January 3 for Banking Holiday #2.
China’s markets will give us an earlier—but still delayed read since the Hong Kong Stock Exchange is closed to observe New Year’s Day on January 2—the day following the first day of January, according to the exchange’s web site–and the Shanghai Stock Exchange is closed on January 2 and January 3.
The quickest read will come from European markets. The Frankfurt Stock Exchange is closed today for New Year’s Eve and tomorrow on New Year’s Day but will be open on Wednesday. London will also be open on Wednesday.
Back in the United States markets were choppy in the first hour of trading. The Senate is scheduled to meet at 11 a.m. Eastern Time today.
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