U.S equity indices rose on Wednesday as upbeat data from China's services sector eased concerns about a global economic slowdown, while Hong Kong's withdrawal of a controversial bill supported sentiment. No doubt that the activities in China's services sector expanded at the fastest pace in three months in August; providing a boost to the world's second-largest economy that has been struggling to reverse a prolonged slump in its manufacturing sector.
On the other hand, sentiment also got a lift after Hong Kong leader Carrie Lam withdrew an extradition bill that had triggered months of often violent protests in the Chinese-ruled city. No doubt that the positive economic news out of China is offsetting the weak manufacturing data from the U.S. yesterday and diminishes the fear of an economic downturn, but warning issued by the U.S. President Donald Trump on Tuesday still seems to weigh upon the movement of global equity markets. He said on Tuesday that trade talks between the United States and China were going well, though he warned that he would be "tougher" in negotiations if the discussions drag on until his second term. For watching my videos on S&P 500 futures.
No doubt that a strong Chinese economy is important for the global economic growth, but tactics of devaluating Yuan by the China itself, from time to time enhance doubts over the China’s proclamation about the strength of Chinese economy. Global equity markets struggled last month as escalating trade tensions and the inversion of a key part of the U.S. yield curve, often seen as a sign of recession, drove investors away from risky assets and pushed the S&P 500 (SPX) to log its worst August in four years. Secondly, further easing concerns of a slowdown were comments from New York Federal Reserve President Williams <!--(NYSE:WMB)--> who said he is ready to "act as appropriate" to help the United States avoid an economic downturn but so far the economy appeared to be in a good place.
On analysis of the movements of S&P 500 futures, in different time frames, I find that the S&P 500 futures are still look under bearish pressure as the exhaustion from the level of 2936, looks evident enough for enhancing suspicion among the traders about the sustenance of S&P 500 futures above the important support level at 2929. I find that a sustainable move below the level of 2929 will confirm the prevalence of exhaustion in S&P 500 futures. No doubt that a downward move below 2877 will push the S&P 500 futures below the level of 2860.
Finally, I find that if the S&P 500 futures close below 2919 on September 4th, 2019, one more ‘Exhaustive Candle’ may appear in the daily chart; which will enhance more bearish pressure on S&P 500 futures till the two major economies of the world seal a final deal on tariff trade war tussle. Secondly, the steady Gold futures look ready to sustain above the level of $1550; which ensures the prevalence of recessionary fear in the global equity markets.
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