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Opening Bell: U.S. Futures Push For New Records; Europe Clings To 4-Year High

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewNov 05, 2019 07:29AM ET
www.investing.com/analysis/opening-bell-us-futures-push-for-new-records-europe-clings-to-4year-high-200482133
Opening Bell: U.S. Futures Push For New Records; Europe Clings To 4-Year High
By Investing.com (Pinchas Cohen/Investing.com)   |  Nov 05, 2019 07:29AM ET
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  • U.S. futures tune into Wall Street's fresh records
  • European shares lag on profit taking but hold onto Monday's 4-year high
  • Asian valuations hit 20-month high
  • Yields keep surging but head for resistance level

Key Events

Futures on the S&P 500, Dow, NASDAQ 100 and Russell 2000 climbed this morning, building on yesterday’s Wall Street rally, where equities hit new records on trade bullishness.

Trading on European shares, however, was slightly more subdued, as utility stocks wiped out gains posted by miners shares, thereby leaving the STOXX 600 mostly flat. The standstill was likely driven by profit-taking: on Monday, the regional benchmark reached a four-year high with industrial firms and banks shares, after U.S. commerce secretary Wilbur Ross said tariffs on European vehicles might be unnecessary.

Earlier, across Asian markets, valuations reached a 20-month high thanks to upbeat third-quarter mega-cap earnings, on top of the promise of a trade deal. Due to the rise in the P/Es, regional shares are catching up with the valuations of their global peers, Refinitiv data showed.

Japan’s Nikkei 225 (+1.76%) led gains, with traders catching up across all indices to a risk-on market after being closed Monday for a holiday.

Global Financial Affairs

Dow Daily Chart
Dow Daily Chart

Yesterday, the Dow Jones Industrial Average finally joined the S&P 500 and the NASDAQ Composite in posting new records, on news that China and the U.S. are nearing the first phase of a trade deal.

In the losers camp, Utilities (-1.28%) and Consumer Staples (-0.96%) slipped lower, with McDonald's) leading losses after CEO Steve Easterbrook was fired over a relationship with an employee. Under Armour (NYSE:UAA) also fell after the group revealed it is undergoing an accounting investigation.

UST 10-year Daily Chart
UST 10-year Daily Chart

Meanwhile, yields on 10-year Treasurys jumped for the third day, as they neared the nexus of the top of a symmetrical triangle and the downtrend line since November 2018.

DXY Daily Chart
DXY Daily Chart

The Dollar Index followed yields higher, climbing for the second day. Technically, the index may have completed the second trough of a downtrend, if the previous rally—which found resistance by the uptrend line since February 2018—was enough to consider a peak. The greenback also returned above the 200 DMA.

AUD/USD Daily Chart
AUD/USD Daily Chart

In other FX markets, the Australian dollar rose after the country's central bank left interest rates unchanged and said past easing measures are yielding enough support. Technically, the Aussie is forming a falling flag, especially bearish after crossing above the downtrend line since late January 2018 and completing a peak and trough ascension in the short term. It still has the 200 DMA above it.

Oil rose for the third day, benefiting from the improved outlook on trade.

Up Ahead

Market Moves

Stocks

  • The Shanghai Composite advanced 0.5%.
  • TheMSCI Emerging Markets Index gained 0.5%.
  • Currencies

  • The Dollar Index edged up 0.05%.
  • The euro climbed 0.1% to $1.1138.
  • The British pound inched 0.1% higher to $1.2902.
  • The onshore yuan gained 0.5% to 6.998 per dollar.
  • The Japanese yen fell 0.2% to 108.82 per dollar.
  • Bonds

  • The yield on 10-year Treasurys jumped four basis points to 1.81%.
  • The yield on 2-year Treasurys climbed one basis point to 1.60%.
  • Germany’s 10-year}} yield gained three basis points to -0.32%.
  • Britain’s 10-year yield increased two basis points to 0.746%.
  • Japan’s 10-year yield advanced five basis points to -0.122%.
  • Commodities

  • West Texas Intermediate crude climbed 0.2% to $56.64 a barrel.
  • Iron ore gained 0.6% to $80.69 per metric ton.
  • Gold slid 0.2% to $1,506.20 an ounce.
  • Opening Bell: U.S. Futures Push For New Records; Europe Clings To 4-Year High
     

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    Opening Bell: U.S. Futures Push For New Records; Europe Clings To 4-Year High

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