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Daily Analysis: US Stocks Slide as Trump Fires FBI Director and Litecoin Explodes Again

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Daily Analysis: US Stocks Slide as Trump Fires FBI Director and Litecoin Explodes Again

Introduction

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2391 -0.33%
DAX 12760 0.02%
WTI Crude Oil 46.56 1.20%
GOLD 1223.00 0.14%
Bitcoin 1765 -2.11%
EUR/USD 1.0865 -0.24%

 

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The two-faced period for global stocks continued so far today, as European stocks and the NASDAQ continue to outperform the broader US indices, while volatility remains very low. Chinese stocks are still very weak, although commodities stabilized somewhat, removing some of the pressure off the connected assets. The mixed economic numbers coming out of China today triggered a negative response, and that could mean that the current decline will continue in the coming weeks. Global sentiment also turned slightly negative after the surprising move by Donald Trump that reignited fears regarding his impulsive leadership style.

Safe-haven assets saw an increase in demand, as the Japanese Yen and gold both rebounded off their weekly lows today. Gold trades near the $1220 level, with the bearish short-term trend still being intact. Crude oil continued to trade sideways in a choppy fashion following the liquidation last week, with the $46.50 level being in the focus in the WTI market. The Euro continued lower against the US Dollar in the aftermath of the French election, as the speech of Mario Draghi failed to prop up the common currency this morning.

Oil Futures, 4-Hour Chart Analysis

Cryptocurrencies

Volatility is still the name of the game in the Cryptocurrency market, with Litecoin and Bitcoin being the two most active coins so far today. LTC experienced yet another break-out, surging past the $35 level, after a brief dip earlier on this week. Bitcoin, on the other hand, is still below $1800, although the highs are not far away, and BTC as edging higher today. The other majors failed to bounce back strongly, with Ethereum, Dash, and Ethereum Classic trading only slightly above their weekly lows. Ripple and NEM, and Monero are a bit stronger but they are also well below their recent highs, as the recent euphoria calmed down.

Litecoin, 4-Hour Chart Analysis

Technical Picture

The ETF representing the US financial sector has been glued to the 23.75 resistance level recently, and it remains well below its March highs after the prior correction. The segment which was one of the leaders of the Trump-rally failed to join the party in recent weeks, and it might be preparing for a move to test the April low near 22.75. The NASDAQ comparison shows the apparent relative weakness of the sector, which largely contributes to the lagging of the broader US indices.

XLF Futures, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Day Country Release Actual Expected Previous
3:30 CHINA CPI Index 1.2% 1.10% 0.90%
3:30 CHINA PPI Index 6.4% 6.8% 7.6%
14:00 EUROZONE ECB President Draghi Speaks
14:30 US Import Prices (monthly) 0.5% 0.2% -0.2%
16:30 US Crude Oil Inventories -5.2 mill -2.0 mill -0.9 mill


Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
9:15 SWITZERLAND CPI Index 0.20% 0.20%
10:30 UK Manufacturing Production -0.20% -0.1%
13:00 UK Official Bank Rate 0.25% 0.25%
13:00 UK Monetary Statement
14:30 US Initial Jobless Claims 245,000 238,000
14:30 US PPI Index 0.2% -0.1%
14:30 CANADA NHPI Index 0.3% 0.4%
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Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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