Please try another search
European stocks crawled higher this morning, while US equity futures for the S&P 500, Dow and NASDAQ 100 meandered, as traders await signals on market direction, amid the uncertainties of global trade. Treasury yields for the 10-year note remain above 3 percent and the dollar has been pressured to its lowest levels since August.
The pan-European STOXX 600 climbed for the fifth straight day, boosted by a rally of auto manufacturer shares, as the recent round of 10 percent US tariffs on Chinese goods seemed mild. As well, optimism was buoyed by China announcing earlier this morning that it plans to lower average taxes levied at imports from the majority of its trading partners.
From a technical perspective the European benchmark is nearing the top of a falling channel, after the 50 DMA crossed below the 200 DMA earlier in the month, a bearish signal. On the other hand, both the MACD and RSI provide bullish signals. This mismatch of indicators clearly illustrates the uncertainty pervading the current market dynamic.
Earlier, during the Asian session, South Korea’s KOSPI advanced 0.65 percent, outperforming the region. Investor sentiment was lifted by the summit meeting of the two Koreas. However, the remainder of local benchmarks, including Japan's Nikkei, Hong Kong's Hang Seng and China's Shanghai Composite were little changed.
During yesterday's US session, the Dow Jones Industrial Average advanced 0.61 percent, outperforming the other major US indices. Shares of Caterpillar (NYSE:CAT) and Boeing (NYSE:BA) pushed theh index higher after China announced it won’t devalue its currency.
After completing a bullish flag last week, the Dow yesterday hit just 0.6 percent below its late-January peak. The pattern’s implied target coincides with the record level, demonstrating that different perspectives meet at the same price level.
The NASDAQ was little changed, falling 0.08 percent and the Russell 2000 declined 0.47 percent, as investors rotated out of domestic stocks and into multinationals, a result of the relief at the mild tariffs.
Thus far, investors have repeatedly indicated they are comfortable with the trade dispute at its current levels. They appear to persist in viewing the activity as nothing more than high-stakes negotiating tactics.
The fact that stocks continue climbing in the face of rising yields is an additional signal that investors remain bullish on stocks, since they haven't yet cashed out in order to rotate profits into 3 percent plus yields. Unless the level of global risk intensifies, or volatility picks up, it appears stocks have a green light to keep climbing.
The dollar fell against most major currencies after a report said the US and Canada are unlikely to reach a deal this week on NAFTA. Technically, the USD is about to fall to its lowest level since late July, after it fell below the 100 DMA (blue). As well, it has formed a second trough, establishing a downtrend.
West Texas crude maintained yesterday’s gains, staying above $71 a barrel, even on declining stockpiles and a weaker dollar. Technically, if the price continues to rise to $72, it would complete a H&S bottom reversal.
Brent has been flirting with the $80 level for the past week. Is this a sustainable price for the European crude oil benchmark? There are arguments to be made for and against.
All prices correct at time of publication
Stocks
Currencies
Bonds
Commodities
Looking at the weekly close of the 10-year US Treasury yield, the final yield print this week at 4.30% is the highest weekly closing yield since the 4.47% close in late November...
A rate cut is unlikely for the Reserve Bank of Australia because inflation is still higher than the 2–3% target range. Further RBA decisions are unpredictable—the market awaits the...
Market Overview: S&P 500 Emini FuturesOn the weekly chart, the market has been stalling in the last 3 weeks by trading sideways and S&P 500 Emini is forming an Emini ioi breakout...
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.