US stocks were mixed on Monday, with the Nasdaq rallying led by big-cap technology shares. Alphabet shares surged as the stock price was upgraded. The Dow was the worst-performing of the major indices. Sectors in the S&P 500 index were mixed, led higher by energy shares, Industrials were the worst-performing sector. Gold prices surged higher on Monday, as geopolitics continued to dominate the landscape. President Trump doubled down on his threats in the mid-east telling Iraq that if US troops were kicked out of the country, following a vote by the Iraqi parliament. Giving up a stronghold in Iraq, that the US-built would create additional chaos in the region. US yields were slightly higher, ahead of this week’s non-farm payroll report scheduled for Friday.
Geopolitical Tensions Increase
US stocks appear to shrug off news that hundreds of thousands of people marched through Iran’s capital Monday in a funeral procession for General Qassem Soleimani, as Iranian officials rallied the nation and threatened retaliation against the US for the targeted killing of the powerful military leader. Iran has threated to retaliate, and President Trump said that any measures would be met with US forces. President Trump also said that he would levy sanctions on Iraq if the country moved forward with a vote in their parliament to kick the US military out of the country.
The VIX volatility index edged higher on Monday but the move was limited. The market is not pricing in much economic hardship in the US with a war within the middle east. The VIX attempted to push above the 15% level early in the trading session but was unable to gain traction and close near the lows of the day.
European Data Was Strong
Markit reported its final December eurozone services and composite PMI readings came in higher than expected. The headline on the services was 52.9 and 50.9, on the composite. Germany improved significantly from the flash reading. Germany also reported strong November retail sales, up 2.1% month over month versus. 1.0% expected.
This article was originally posted on FX Empire
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