Connect with us

Market Overview

Daily Update: U.S. Stocks Waver on Trump’s Tariff Threat

Published

on

U.S. stocks ended Tuesday trading on a slightly higher note, although underlying demand was subdued by the threat of an escalating trade war.

Stocks Pull Ahead

Wall Street’s major indexes traded higher by the end of trading Tuesday, with the S&P 500 Index adding 0.3% to 2,728.12. Eight of 11 sectors contributed to the gains, with materials adding more than 1%. Industrials and consumer discretionary stocks also outperformed the market, rising at least 0.5%.

The Dow Jones Industrial Average pared gains to finish virtually flat at 24,884.12. The blue-chip index was down by as much as 166 points by midday. Only 14 of the Dow’s 30 index members finished higher, with gains concentrated in technology and industrials.

The Nasdaq Composite Index was the biggest gainer in percentage terms, rising 0.6% to 7,371.01.

A measure of implied volatility known as the CBOE VIX fell on Tuesday for a third straight session, closing down 2% to 18.36. Volatility has been simmering down over the past week following a dramatic surge in February.

The VIX trades on a scale of 1-100 and moves inversely with the S&P 500 Index roughly 75% of the time.

EU Responds to Trade Tariffs

The European Union (EU) has issued a response to President Donald Trump’s planned tariffs on steel and aluminum by signaling its preparedness to levy duties on American products. EU Commissioner Cecilia Malmstrom told reporters everything from Levi jeans to whiskey could be charged a 25% import tax in retaliation to the president’s new measures.

President Trump on Friday announced tariffs of 25% and 10% on steel and aluminum imports, respectively, but did not go into details about the countries or products affected.

Several of Trump’s allies have come out against the tariffs, including Senator David Perdue, House Speaker Paul Ryan and White House economic adviser Gary Cohn. Cohn would later resign from his post over Trump’s new policy.

On Tuesday, the president turned his tariffs into a bargaining chip offered to Canada and Mexico in pursuit of a comprehensive NAFTA deal. Washington has formally offered Canada and Mexico exclusion from the planned tariffs in exchange for a successful trade agreement. Realistically, the Trump administration has about a month to seal a NAFTA deal that would allow for ratification before July, when Mexico heads for election.

Market participants are also hoping for a resolution to NAFTA before the U.S. midterm congressional elections in November.

In economic news, U.S. factory orders declined more than expected at the beginning of 2018, raising some concern over a slowdown in industrial production. The Commerce Department said bookings for factory goods dropped 1.4% in January following an upwardly revised gain of 1.8% the previous month.

Later this week, the Department of Labor will issue its highly anticipated nonfarm payrolls report, which provides the latest on employment, workforce participation and hourly wage inflation. The February jobs report will be released Friday at 8:30 a.m. ET.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 505 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Market Overview

Market Update: U.S. Stocks Edge Lower in Tepid Trading; Earnings Up 21% So Far

Published

on

U.S. stocks finished mixed-to-lower Friday as trade uncertainty outweighed robust corporate earnings from Microsoft, one of the tech industry’s most closely-watched blue-chips.

Stocks Struggle for Direction

All of Wall Street’s major indexes hovered around break-even in afternoon trade, with the S&P 500 Index and Nasdaq eventually settling lower.

The large-cap S&P 500 edged down 0.1% to 2,801.83. Eight of 11 primary sectors led by utilities and consumer shares finished in the red.

The tech-focused Nasdaq Composite Index closed down 0.1% at 7,820.20.

Dow industrials were virtually unchanged by the close, settling at 25,058.12.

Wall Street’s VIX fear index, which trades on a scale of 1-100, was virtually unchanged at 12.86.

Earnings on Track for Large Gains

Shares of Microsoft Corp (MSFT) rose to all-time highs after the company reported stronger than expected corporate results late Thursday. The tech juggernaut posted per-share earnings of $1.14 on revenue of $30.1 billion during its fiscal fourth-quarter. Analysts on Wall Street called for earnings of $1.08 per share on sales of $29.2 billion.

Guidance was a big factor in the company’s strong performance Friday. Microsoft said it expected first-quarter revenue of between $27.35 billion and $28.05 billion. Analysts had expected a revenue guidance of $27.4 billion.

General Electric Co (GE), a former Dow blue-chip, also reported earnings and revenue that were higher than expected. However, the company’s share price declined sharply Friday.

S&P 500 companies have reported an annual earnings growth rate of 20.8% for the second quarter, according to FactSet. Eighty-three percent of S&P 500 companies have yet to report.

Trump Breaks Precedent

On Thursday, U.S. President Donald Trump scolded the Federal Reserve for raising interest rates, a move that put him at odds with a long line of presidents who have refused to get involved in central bank policy.

According to Trump, the Fed’s plan to raise interest rates could hurt disrupt the economy at a time when the recovery engine was gaining momentum.

A White House statement later clarified that the president is not trying to influence Fed policy:

“Of course the President respects the independence of the Fed. As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions ” the statement said. “The President’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments.”

The U.S. central bank has raised interest rates twice this year and is planning on hiking twice more in 2018.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 505 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Market Overview

Bankers & Politicians

Published

on

Hi Everyone,

Today is the day. Out of all the meetups, conferences, and hearings that we’ve seen regarding the future of money over the last year, imho none are as critical as the decision expected from India’s supreme court today.

Like several other places in the world, the Indian government is now working hard to form their policy regarding bitcoin and cryptocurrencies but the banking sector has made it clear that they will do everything in their power to halt this.

When Prime Minister Modi made the move to remove 86% of the paper money in India on November 8th, 2016 he inadvertently handed a big win to the banking system and it seems they’re willing to do everything in their power to maintain the status quo.

The crypto ban imposed by the Reserve Bank of India earlier this month is a clear example of this effort. Let’s hope that the judicial system sees through this today and strikes down this policy, doing what is right for the wider public now and for future generations.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Central Bank Independence
  • Stock Markets are Mixed
  • Divergence in Crypto

Please note: All data, figures & graphs are valid as of July 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

It was funny, but yesterday I was teaching a group of new eToro representatives about central banks and happened to use an example of what’s happening in the news.

The point I was making is that central banks are officially disconnected from politics but that politics do end up influencing their actions and vice versa.

In his testimony on Wednesday, Fed Chair Jerome Powell did his best not to take sides on the current trade dispute between the USA and China. However, when pressed, he did admit that the proposed sanctions of $200 billion on Chinese imports would have a negative impact on the economy.

This is similar to when Mark Carney, the Governor of the Bank of England, stated before the Brexit referendum that if the vote passes it would hurt the Pound. The statement doesn’t take sides, it simply states the view of someone who is in a good position to understand the economic impact.

So, it was a bit surprising that a few hours after our lesson, Donald Trump had a few remarks of his own about what he thinks the Fed should or shouldn’t be doing.

Though President Trump insists that he’s not trying to influence the Fed’s decision, the very fact that he stated his opinion will likely have an impact on policy, it certainly had an impact on the markets.

Here we can see the US Dollar falling at the time of the interview.

The price of gold also reacted to the administration’s new policy.

Well… maybe not a new policy. Trump did blast Yellen while on the campaign trail for raising interest rates but this is the first time that any US President has so publicly disputed central bank policy, at least not since Bush Senior & Greenspan.

Meanwhile, Trump is still under pressure for his performance with Putin in Helsinki and we’re watching that play out in the press and in Congress.

Stock markets remain mixed while all this sinks in.

Mixed Crypto Rally

There’s been a lot of excitement in the crypto markets over the last few days and everybody wants to know where this is going.

Here’s an article that’s rather bullish…

…and here is one that’s quite bearish…

My thoughts…

It’s still too early to say for certain. The chart of bitcoin is sending rather mixed signals. On the one hand, the downward trendline (yellow) that that has loomed over Bitcoin for the better part of this year has now been broken.

On the other hand, the current rally has stopped significantly short of breaking the strong line of resistance (dotted blue) that kept the price notably depressed in early June. A break above that could very well lead us to $10,000 (green line) but only a clean break above that would indicate a shift in the medium term trend.

One point that is giving a positive sign is the level of divergence between different digital assets. Here we can see a graph containing all the cryptos currently traded at eToro over the last few days.

We’ve noticed in the past that when the trend is down the cryptos tend to stick more closely together, whereas when things are moving up we tend to see more mixed results. The price action over the last 48 hours would certainly indicate the latter.

As always, tag me at the links below if you need anything at all. Wishing you a very pleasant weekend.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.7 stars on average, based on 115 rated postsSenior Market Analyst at Etoro.com.




Feedback or Requests?

Continue Reading

Analysis

Pre-Market: China Tries to Support Markets as Global Stocks Slide

Published

on

Yesterday’s risk-off shift continued today in early trading with nervous and choppy trading in Asia and Europe, as global financial markets are still haunted by trade war fears and emerging market weakness. The major US indices rolled over after another period of apparent relative strength, with the Nasdaq being the most robust market once again, while most of the key European benchmarks continue to lag behind.

S&P 500 Futures, 4-Hour Chart Analysis

Chinese assets are still in focus before the weekend, as the Yuan’s recent steep devaluation sparked fears of a credit meltdown in the country. With the largest credit bubble in human history casting its shadow on China, some analysts think that with Trump’s trade war, the bug finally found its windshield and the bubble already started to burst.

USD/Yuan, 4-Hour Chart Analysis

All eyes are on the USD/Yuan pair as Chinese authorities are reportedly intervening in the market of the currency, and most likely local equities as well, trying to prevent a serious run on the most important assets.

With the Chinese stock market already in a bear market, and the Yuan trading at fresh 12-month lows against the Dollar, it might be a bit late to stop the slide, but the intervention could cause spectacular short squeezes.

Italy also made headlines today during the European session, as Italian government bonds got slammed lower, as the future of the new finance minister is uncertain, with another round of political turmoil possibly ahead for Europe’s most vulnerable country.

Unicredit (UCG), 4-Hour Chart Analysis

Looking at the charts of Italian banks, it’s clear that the spring turmoil had a lasting effect on the financial system, as Unicredit is on the verge of hitting a new low, and the other large players also remain under pressure, in part explaining the general weakness in European equities.

Europe Still Far Behind amid Mixed Economic Numbers

USD/CAD, 4-Hour Chart Analysis

The economic calendar is almost empty today with regards to the key markets, as the Canadian Retail Sales and CPI reports are the most important releases. The Canadian Dollar rebounded when the USD entered a correction June, but now the currency edging lower again, as the weakness in commodities and the Greenback’s rally are taking their toll. New highs are likely in the USD/CAD pair in the coming weeks, although strong resistance is just ahead at 1.33.

Commodities are little changed today after yesterday’s volatile session, as the bounce in China helped to stabilize the segment. Notably copper is back above the key $2.70 level, while WTI crude oil is trading at $68 per barrel again, and gold is hovering around $1225.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 297 rated postsTrader 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.




Feedback or Requests?

Continue Reading

5 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending