Pre-Market Analysis And Chartbook: Global Stocks Mixed on Trade Confusion

Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,651 0.45%
DAX 30 11,277 -0.52%
WTI Crude Oil 66.14 -0.84%
GOLD 1,225 -0.49%
Bitcoin 6,267 0.02%
EUR/USD 1.1371 -0.01%

Yesterday’s late-day selloff in US stocks halted the broad rally in risk assets but so far, most of the major global indices are holding up above their recent lows today. President Trump hinted on a looming deal with China following yesterday’s reports on yet another round of trade tariffs, causing a hectic session in Chinese equities.

Nikkei 225 Futures, 4-Hour Chart Analysis

The Nikkei on the other hand had a decisively bullish session, with the Yen’s continued weakness boosting the benchmark that shed more than 12% in October. The market continues to bet on a dovish surprise on tomorrow’s Bank of Japan meeting following the recent rout in global stocks and the spike in the main safe-haven assets. While the Japanese unemployment rate came in below expected, the selloff in the Yen didn’t stop, with the Dollar Index getting closer to its August high in the process.

EUR/USD, 4-Hour Chart Analysis

European shares are weaker following yesterday’s relatively strong performance as French consumer spending and Italian economic growth came in below expected. The Euro also continues to drift lower amid the broad Dollar rally, with still no meaningful progress in the EU-Ital budget debate, and the EUR/USD pair is getting closer to testing the 1.13 level and the August lows.

FTSE 100 Index CFD, 4-Hour Chart Analysis

The Great British Pound continues to lose ground against the Greenback and the Euro as well and that is helping British equities this week before Thursday’s Bank of England meeting. The FTSE 100 is hovering near last week’s highs, helped also by the broad stability in Europe. That said, the benchmark is still in a steep downtrend, and given the bearish shift in global markets, the trend is expected to continue after the consolidation phase.

Stocks Expected to Stay Volatile Amid Earnings Bonanza

The US market could see further wild swings today, as more than $2 trillion in market cap will report, and as the Volatility Index (VIX) is still near 25. The major Wall Street indices are trading within yesterday’s ranges, as the market settled down following the pre-close chaos.

The CB consumer confidence index will also come out after the opening bell, so a very active trading day is expected with the after-hours session also promising to be busy, given the quarterly reports from Facebook, Amgen, and Baidu.

Dow 30 Futures, 4-Hour Chart Analysis

The Dow has been performing in line with the other major US indices so far this week, failing to maintain the bullish momentum yesterday amid the renewed trade worries. The benchmark hit its lowest levels since early July and it is currently testing the 24000-24500 zone that is the last major area of support above the 23,500 level that halted the spring correction.

For now, the steep short-term downtrend is intact, but should small-caps continue to outperform, a more durable, counter-trend rally is possible. That said, we remain bearish on stocks from a broader perspective, and we still treat rallies as selling opportunities, given the global risk-off shift, and the technical setup in the major markets.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Featured image from Shutterstock

Author:
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.