USA500, Daily
U.S. equities resumed their rally after Abe’s reelection in Japan as PM boosted the Nikkei 1.11%, though the HK Hang Seng sank 0.64% and China’s CSI 300 gained only 0.1%. Europe is mildly higher itself with the Euro Stoxx 50 +0.28%, though Spain’s IBEX is 0.35% lower as Catalonia prepares to respond to Madrid’s effort to take over governance of the renegade region. The Chicago Fed index rose 0.17 in September vs a -0.37 fall, though the third tier data didn’t have any significant impact. The USA30 is 31-points higher, and the key USA500 gained 2-points Earnings will continue to flood out with a very meaty week of results. Indeed 189 of the USA 500 and 12 of the USA30 companies, report earnings this week. Top of the shop are technology heavy weights Amazon and Alphabet. Momentum has continued to swing back towards tax cuts in the wake of the Senate budget resolution last week, while Trump winnowed his Fed chair short-list down to three last week and plans to make the decision “shortly,” while he also said there would be no change to 401(k) plans in the tax plan. The dollar index is up 0.12% to the key 94.00 area after the Abe election, while gold is back below $1,275 in risk-on trade.
Technically, the USA500, is screaming overbought with an RSI at 83.00 and rising, but know one appears to be interested, and its been over the important 70 for the last 3 weeks. 2580 I mentioned at the beginning of the quarter as its first resistance level, with 2630 representing a 5% rise for the fourth quarter, not unheard of in such bullish heady markets. Buyer beware, the behemoth that is APPLE report November 2nd the same day as the iPhone X goes on sale.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
AUD/USD weakens further as US Treasury yields boost US Dollar
The Australian Dollar extended its losses against the US Dollar for the second straight day, as higher US Treasury bond yields underpinned the Greenback. On Wednesday, the AUD/USD lost 0.26% as market participants turned risk-averse. As the Asian session begins, the pair trades around 0.6577.
EUR/USD stuck near midrange ahead of thin Thursday session
EUR/USD is reverting to the near-term mean, stuck near 1.0750 and stuck firmly in the week’s opening trading range. Markets will be on the lookout for speeches from ECB policymakers, but officials are broadly expected to avoid rocking the boat amidst holiday-constrained market flows.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
President Biden threatens crypto with possible veto of Bitcoin custody among trusted custodians
Joe Biden could veto legislation that would allow regulated financial institutions to custody Bitcoin and crypto. Biden administration’s stance would disrupt US SEC’s work to protect crypto market investors and efforts to safeguard broader financial system.
US inflation data in the market purview
With next week's pivotal US inflation data looming, we're witnessing a stall in stock market momentum and an uptick in US Treasury yields. This shift comes amid murmurs of hawkish sentiment from Fed speak. Indeed the mind games intensify even further as investors cling to their rate cut hopes.