Global stocks rose for the fourth day in a row, marking their best streak in over two months. This came as trade tensions eased and Federal Reserve officials signaled they might lower interest rates sooner than expected.
Markets were more optimistic that the US and China were prepared to negotiate a deal. This came after Bloomberg News reported that Chinese Authorities were prepared to suspend its 125% tariff on some US imports.
U.S. futures also benefited after Google’s parent company Alphabet (NASDAQ:GOOGL) exceeded profit expectations and confirmed its AI investment plans; its shares jumped nearly 5% in after-hours trading, boosting other tech stocks as well.
European futures rose, with STXEc1 up 0.6% and FTSE futures increasing by 0.2%. Meanwhile, on Wall Street, the S&P 500 gained 2% despite mixed corporate earnings.
On the FX front, the US dollar, which had struggled in recent weeks due to tariff updates and shifts in investor confidence, stabilized at 1.1330 to the euro and 143.6 against the Japanese yen.
Currency Strength Chart, Strongest - Weakest: USD, AUD, CAD, GBP, NZD, EUR, CHF, JPY
Source: FinancialJuice
The commodities side saw safe-haven Gold falter again on the improved sentiment. The precious metal fell from an early Asian session high around $3371/oz to trade around $3300/oz mark at the time of writing.
Oil prices rose for a second day on Friday, supported by hopes of easing the U.S.-China trade tensions. However, the market was still on track for a 2% weekly drop due to worries about oversupply.
Is the worst behind us? When it comes to tariffs this is the question that market participants will grapple with moving forward.
Given the comments by both US and China officials over the past 72 hours, one could reasonably assume that the worst may be behind us. Both parties now seem to understand that nobody wins when it comes to tariffs and this could be the boost that market participants have been looking for.
Economic Data Releases
From a data standpoint, it’s a bit of a quiet day in terms of data for the EU and UK. The highest impact data release for the morning, which was wage data from the UK, has been released with markets likely to focus on overall sentiment as EU earnings releases are also relatively slow today.
Chart of the day - DAX
From a technical standpoint, the DAX has continued its advance in line with other risk assets.
This has brought the index to a crucial confluence level around the 22300-22400 handle where the 50-day MA rests.
The index has also broken above the 50 level on the period-14 RSI, a sign of the bullish momentum in play.
A break above the 22400 handle could lead to further gains with resistance at 22800 and 23200, respectively.
A rejection here could bring the support level around the 21800 handle into focus before the 20 and 100-day MAs around 21500 become an area of interest.
Source: TradingView.com