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Dow Jones Shows Remarkable Poise as Record Streak Hits Six Days

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U.S. stocks advanced Monday, with the Dow Jones Industrial Average setting a new record high on resurgent materials and energy companies.

Dow Jones Extends Record

The Dow Has been on a tear over the past two weeks, putting up gains in eight of the past nine sessions. The index rose 63.01 points, or 0.3%, to 22,331.35. That was the sixth consecutive record close.

Fifteen of 30 index members contributed to the gains. General Electric Co (GE) was the biggest gainer, climbing 2%. Caterpillar Inc (CAT) also advanced 2% per share.

New York-based JPMorgan Chase & Co (JPM) and Goldman Sachs Group Inc. (GS) were also among the biggest contributors, rising 1.4% and 1%, respectively.

On the opposite side of the ledger, Apple Inc. (AAPL) fell 0.8%. Nike Inc. (NKE) also fell 0.7)%.

The blue-chip index has added 3% over the past month as investors shrugged off geopolitical risks and violent weather events. Markets caught a favorable tailwind after U.S. President Donald Trump backed a deal proposed by Democrats to raise the debt ceiling and keep government funded. The agreement, which was panned by several GOP lawmakers, averts an imminent shutdown of government ahead of the Sept. 30 deadline.

September is a historically difficult month for stocks as investors return from the summer lull period. Since 1950, the Dow has posted an average decline of 1.1% in September.

Dollar Rallies Ahead of FOMC

The U.S. dollar strengthened against a basket of competitor currencies Monday, but wasn’t far off last week’s multi-year low. The dollar index (DXY) rose 0.2% to 92.02.

A stronger dollar hastened the decline of precious metals, which have been in a broad retreat over the past week. Gold futures for December settlement fell 1.1% to $1,311.00 a troy ounce, a three-week low on the Comex division of the New York Mercantile Exchange. December silver futures also plunged 2.8% to $17.20 a troy ounce.

The Federal Open Market Committee (FOMC) will begin its policy meeting on Tuesday, with the official rate statement due the following afternoon. Nearly 71% of economists polled by The Wall Street Journal expect the Federal Reserve to announce plans to shrink its portfolio holdings.

Through a series of bold moves, the Fed allowed its portfolio to swell to $4.5 trillion in the years following the financial crisis. With the economy back on track – at least, on paper and while ignoring things like wages, workforce participation and productivity – the central bank has been slowly removing policy accommodation.

Central bankers will also release their quarterly economic projections on Wednesday. The projections cover GDP, unemployment and inflation. The central bank’s now infamous “dot plot” summary of interest rate expectations will also be released.

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.

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4.6 stars on average, based on 548 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.




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Market Overview

Market Update: U.S. Stocks Surge Ahead of China Trade Talks; Bitcoin Eyes Bullish Reversal

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U.S. stocks surged on Thursday after a senior White House official confirmed that trade talks with China will resume later this month, sparking optimism that the world’s two largest superpowers can resolve a lingering tariff dispute.

Stocks Rebound

All of Wall Street’s major indexes put up firm gains on Thursday, with the Dow Jones Industrial Average surging 396.32 points, or 1.6%, to 25,558.73. Shares of Walmart Stores Inc. (WMT) surged more than 9% after reporting its best sales growth in a decade. Boeing Company (BA) and Caterpillar Inc. (CAT) each rose 4.4% and 3.2%, respectively.

The broader S&P 500 Index rose 0.8% to 2,840.69, with all 11 primary sectors reporting gains. The consumer staples category was among the best performers, rising 1.5%. Financials stocks added 1.3% as a whole.

The technology-driven Nasdaq Composite Index finished well off session highs, rising 0.5% to 7,806.52.

A measure of implied volatility known as the CBOE VIX declined on Thursday, partially offsetting the previous day’s sharp climb. The so-called “fear index” fell 9.5% to 13.25 on a scale of 1-100 where 20 represents the historic mean.

U.S.-China Trade Talks Back On

White House economic adviser Larry Kudlow confirmed Thursday that China will send an envoy to Washington later this month to re-start trade negotiations between the two countries. Although the talks are expected to be low-level, they mark important progress in a relationship that has quickly deteriorated.

“The Chinese government, in its totality, must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and nontariff barriers and quotas, to stop the theft of intellectual property and to stop the forced transfer of technology,” Kudlow told CNBC’s Squawk Box on Thursday.

U.S. tariffs targeting $50 billion worth of Chinese goods have been implemented so far. President Trump has warned Beijing that the next round of levies will be much larger.

Bitcoin Eyes Breakout

The cryptocurrency market stabilized on Thursday, with bitcoin eyeing a bullish reversal amid reports of a new bitcoin exchange-traded note (ETN) being offered in U.S. brokerage accounts.

According to Bloomberg, the Bitcoin Tracker One ETN will be available to U.S. traders under the ticker symbol CXBTF. The ETN has been publicly traded on Nasdaq Stockholm since 2015. Technically, the ETN will be quoted as a foreign debt in U.S. over-the-counter markets.

Bitcoin’s price reached a high of 6,476.70 on Bitfinex. The leading digital currency would consolidate at $6,380 for a gain of 1.1%. As Hacked reported earlier, BTC has crossed the 50-day moving average and appears poised for further gains amid a sharp rise in momentum.

The broader cryptocurrency market was valued at $206.2 billion Thursday afternoon, with most major assets reporting 24-hour losses. Ethereum Classic was a notable exception; the cryptocurrency spiked 18% after Coinbase Consumer confirmed full support for ETC listings.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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.

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4.6 stars on average, based on 548 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.




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Market Overview

Finally Fighting Back

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Hi Everyone,

Perhaps one of the most revered personalities in the crypto world is Vitalik Buterin, the creator of Ethereum. His pioneering work on smart contracts is arguably one of the most important technological advancements in the development of cryptos.

Ethereum’s co-founder Joseph Lubin recently stated on Bloomberg that he doesn’t see the current falling prices as a hindrance to growth and I have to agree with him there.

What might prove to be a hindrance though, is the sheer popularity of the Ethereum network. As we saw with Bitcoin in early December, the Ethereum blockchain is now seeing times of stress as there are more transactions than the miners can confirm in a timely manner.

This morning, Vitalik provided a 75 tweet report on the network’s multiple paths forward, including the much anticipated Casper upgrade.

The good news is that the Ethereum developers seem to have good solutions for most of the issues. Unfortunately though, the timeframe remains elusive with some experts estimating that it could take more than a year to properly scale the busy network.

Many agree that decentralized applications will play a prominent role in our daily lives in the future. Currently, Ethereum is the prevailing platform for the creation of these dApps. What’s clear today is that they will have to work very hard to keep it that way.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trump & China – Talking Again
  • Dollar Step Back
  • Crypto Also Rebounding

Please note: All data, figures & graphs are valid as of August 16th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Markets are breathing a sigh of relief this morning as

The Turkish issue is still far from resolved, but it seems that Angela Merkel has been able to make some headway on the issues. In any case, this spat has roiled markets far more than it probably should have and it’s good to see things returning to some level of normality.

Asian and European markets have started out in a good mood. Let’s hope it sticks.

Dollar Pullback

Along with this positive risk sentiment, we do see some much-needed signs of weakness from the Greenback.

Most of the Emerging Markets currencies that we saw falling apart at the beginning of the week are now fighting back hard.

Here we can see the USD falling today against the Lira, Rand, and the Peso…

Even though the precious metals did continue to get hammered throughout the day yesterday and most of last night, they do seem to be rebounding this morning.

Crypto Fighting Too

Not to be left out, the crypto market also seems to have found relief in the Dollar’s pullback.

The markets are now seeing some much-needed calm after the declines of the past two weeks, which seems to have culminated with Tuesday’s plunge.

Let’s have an excellent day ahead!

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.

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4.7 stars on average, based on 122 rated postsSenior Market Analyst at Etoro.com.




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Analysis

Pre-Market: Trade War Optimism Sparks Another Bounce in Stocks

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Global stocks are markedly higher today before the US open, Donald Trump’s quite aggressive negotiating seem to be paying off, at least with regards to China, as in the wake of the pronounced weakness in Chinese assets, and the notable slowdown in the economy, the country wants to reopen the talks with the US.

Shanghai Composite, 4-Hour Chart Analysis

The Shanghai Composite hit a new bear market low overnight before recovering above support into the close, and the Dollar’s rally also ran into resistance, thanks to the Yuan’s bounce of its fresh 13-month low. Emerging market assets are also somewhat higher today, with the help of the Turkish Lira’s continued bounce, but the segment is still deeply wounded technically, and more pain is almost inevitably ahead, as the negative trends still stand.

 

DAX Index, 4-Hour Chart Analysis

Walmart’s great earnings report also fueled the pre-market rally in US futures, as the retail segment in the largest economy still seems to be doing just fine, despite the global woes. The major US indices are after an orderly looking correction, in stark contrast with their European and Asian peers, which are stuck in broader downtrends or even full-blown bear markets.

Nasdaq, 4-Hour Chart Analysis

Yesterday’s tech selloff, which was triggered by the weak report of Chinese giant Tencent has almost been erased after the better than expected numbers of Cisco restored confidence in the market-leading segment. Nvidia (NVDA) will also report after the market close, and as the earnings season is drawing to a close, we can conclude that corporate profits had a blowout quarter in the US, even as cracks in the global economy appeared.

Momentum is still clearly on the side of the FAANGS and the whole US tech sector even after discounting Facebook’s recent plunge, but should the tightening cycle of the Fed continue to drain liquidity from financial markets and should the rising trend in rates persist, we expect valuations to suddenly matter soon.

Dollar Pulls Back

Dollar Index (DXY), 4-Hour Chart Analysis

The possible resumption of the US-Chinese trade talks sparked a, so far, weak correction, which also due from a technical standpoint, with the EUR/USD pair finding support near $1.13, and with the broader Dollar Index running into resistance near the 97 level. The rally in the reserve currency is no danger by any means, as the break-out is clearly intact, but a deeper pullback would help risk-assets in the coming days.

WTI Crude oil, 4-Hour Chart Analysis

Commodities are slightly higher thanks to the relief rally in emerging markets and the dip in the Dollar, but the previously stronger crude oil is just holding up above the $65 support, while gold is clearly below $1200, and copper couldn’t get back anywhere near yesterday’s break-down level close to $2.70.

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.

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4.6 stars on average, based on 320 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.




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