STOCK PRICES AND NEWS


Wall Street Week Ahead (SPY) (QQQ): Evergrande is not so grand and Nike just doesn't do it

A topsy turvy week with a shocking opener on Monday leading to some stabilization on Tuesday ahead of the Fed. The Fed played its hand well and we welcomed a Wednesday rally with more gains on Thursday and now a flat Friday. Equity investors are confusing themselves while bond traders know the only way is up.

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NASDAQ

Latest Nasdaq News


S&P 500

Latest S&P 500 Analysis


SPECIAL YEARLY FORECAST

S&P 500 Price Forecast 2021: Optimism is not inappropriate as bulls could enjoy another 15% winning year

S&P 500: Optimism is not inappropriate as bulls could enjoy another 15% winning year

It's not the Roaring Twenties, it's not even 2020, but pent-up consumer demand and the return of shuttered industries could boost the S&P 500 next year well beyond its recent record. Equity averages were already at all-time highs in late February when COVID-19 panicked markets into the starkest sell-off in post-war history. In one month, from February 19 to March 23, the S&P 500 shed 52.6% of its value.



US EQUITY INDICES

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The old economy stocks are said to be represented by the Dow. The Dow tends to be the leading indicator for international investment.

While the Dow reflects the BIG money, S&P 500 reflects the broader view is the preferred gauge of equity markets due to its bread coverage of the market. Historically it has shown a negative correlation to the yen (even on an intraday basis). It is a market value-weighted index made up of the prices of 500 large stocks traded in the US market, covering about 75% of US equities.

Nasdaq Composite is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. Since both U.S. and non-U.S. companies are listed on the NASDAQ stock market, the index is not exclusively a U.S. Index. The NASDAQ represents the speculative retail money.

Generally speaking, if the U.S. equity markets rise, they cause an increase in investors' risk appetite in which case foreign investment dollars will flock the U.S. equity market pumping the U.S. dollar higher.


EUROPEAN EQUITY INDICES

Germany DAX - Daily

UK FTSE 100 - Daily

The Deutscher Aktien Index, or DAX 30 for short, is the blue-chip market index for the Frankfurt Stock Exchange. It follows the top 30 German stocks on the electronic Xetra system that is used on the exchange. The DAX indices are all calculated using capitalization-weighted index using the total return Laspeyres index for calculations. 

Called the footsie, the Financial Times Stock Exchange 100 is a market capitalization-weighted index representing the top 100 blue-chip companies on the London Stock Exchange. The index is said to map more than 80% of the total capitalization in the United Kingdom. Stocks are free-float weighted to ensure that only the investable opportunity set is included within the index. 

The constituents of the index are revised every 3 months, based on market capitalization. For this reason, the FTSE 100 should not be assessed for any market breadth index, other than for the recent period for which the components have remained unchanged.


JAPANESE EQUITY INDICES

The Nikkei is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the Nihon Keizai Shimbun (Nikkei) newspaper since 1950. It is a price-weighted average (the unit is yen), and the components are reviewed once a year. This market is close correlated with US 10-Year Treasury notes. It's also useful to spot risk appetite and gauge FX flows. 
Usually it's negatively correlated to the Yen. It can be explained as a reasonable decline in the yen usually lifts stocks of export-oriented companies (cheaper Japanese products), which tends to boost the overall stock index. 
But the Nikkei-yen relationship is sometimes reversed (positive correlation): wherein a strong open market in the Nikkei tends to boost the yen (weighs on USD/JPY) as investors’ funds flow into yen-denominated stocks.

Nikkei225 - Daily


Relationships between stocks and currencies

Currencies are probably the most difficult asset class to fit into a consistent or idealized intermarket model. To start with, think that in order to purchase stocks from a particular country, investors must pay in the local currency, increasing the demand for it. The other way round, a strong currency makes bonds and stocks from that particular country look attractive.

In any case, the correlation is not always clear, there are response lags between each of the markets' reactions, Forex and equities, which leaves the investor holding foreign equities exposed to exchange rate fluctuations.

This correlation can also be fragile among international equity markets themselves. There are so-called "global divergences" when the stock market in one country starts performing better than the stock market in another country. Currency driven capital flows from the country with the weaker stock market to the country with the stronger stock market, is often the cause.

US Dollar Index - Daily

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Latest STOCK INDICES Analysis

Editors' picks

EUR/USD struggles around 1.17 in aftermath of German elections

EUR/USD is trading around 1.17, struggling to rise amid the close German elections. The safe-haven dollar dropped earlier as the Evergrande crisis eased. US Durable Goods Orders and a speech by the ECB's Lagarde are eyed.

EUR/USD News

GBP/USD rises to 1.37 as upbeat mood outweigh petrol crisis

GBP/USD is trading at around 1.37, benefiting from the upbeat market mood and last week's BOE hawkishness. Brexit-related shortages of petrol in the UK hurt sterling earlier. 

GBP/USD News

USD/JPY climbs to the highest level since July 5, around 111.00 mark

USD/JPY attracted some dip-buying on Monday and turned positive for the fourth straight day. The risk-on mood continued weighing on the safe-haven JPY and extended support to the pair. A modest pickup in the USD demand provided an additional boost and remained supportive.

USD/JPY News

XAU/USD eyes $1767 critical supply zone

Gold is easing off the higher levels, as the risk-on market environment amid ebbing China Evergrande fears and US stimulus optimism dulls the safe-haven appeal of the bright metal.

Gold News

WTI renews 11-week top around $74.50 amid cautious optimism

WTI extends a five-week uptrend to refresh multi-day high with a $74.52 mark during Monday’s Asian session. In doing so, the black gold cheers mildly positive market sentiment while paying a little heed to the US dollar strength and challenges to risk appetite from China.

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