Daily Analysis: Small Caps Surge on Trump Tax Plan
Wednesday Market Recap
|Asset||Current Value||Daily Change|
|WTI Crude Oil||52.12||0.48%|
Donald Trump’s much-awaited tax cut proposal got leaked in all its glory, and it is mostly in line with expectations. The plan’s focus is on reducing the weight on small businesses and corporations, and the Russell 2000, the US small-cap index, acknowledged the proposal by a surge to new all-time highs today. While some analysts stated that the cut is smaller than expected, and the major US benchmarks dipped lower after the leak, the plan is a step in the right direction, if it makes it through Congress and the Senate that is.
Russell 2000, Daily Chart Analysis
The Dollar continued its recent rally in early trading, but the advance stalled after the leak, and the currency retraced some of its gains against the majors. That said, the Yen, the Pound, and the Loonie are all significantly lower compared to the greenback, although the Euro is slightly up since yesterday, currently trading at 1.1750. Global stocks have also been bullish today, while gold dipped back below $1300 on the continued strength of the Dollar.
DXY, 4-Hour Chart Analysis
Cryptocurrencies are on the rise once again today as all of the majors are well in the green, and with NEO, Ripple, and Ethereum Classic leading the way higher with double-digit gains. Bitcoin and Ethereum are all above key resistance levels, $4000 and $300 respectively, as the post-crash rally continues to dominate the market. The previous leaders, Dash, Monero, and Litecoin are still lagging regarding the short-term performance, but all in all, the segment continues to heal, and the deep correction left the long-term uptrends unscathed.
Ripple/USDT, 4-Hour Chart Analysis
The NASDAQ recovered from its recent dip well today, as the broad rally in equities pulled the tech benchmark out of its short-term correction. The index is still below its all-time highs, lagging the other major benchmarks, but the 5850 support held up, and a rally above the 6000 level is still the most likely scenario. The likes of Apple (AAPL) and Facebook (FB) have been dragging the index lower in recent days, but given the bounce in those stocks, and the strong showing in small-caps, bulls should hold on to their short-term long positions, even considering the clear valuation issues with US equities.
NASDAQ 100, 4-Hour Chart Analysis
Key Economic Releases on Wednesday
|14:30||US||Core Durable Goods||0.2%||0.2%||59.3|
|14:30||US||Pending Home Sales||-2.6%||-0.5%||-0.8%|
|16:00||US||Crude Oil Inventories||-1.8 mill||2.9 mill||4.6 mill|
Key Economic Releases on Thursday
|10:15||UK||BOE’s Carney Speaks||–||–|
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