Daily Market View-U.S Stock Market

The S&P 500 and the Dow edged lower yesterday as a resurgence of COVID-19 cases globally sapped appetite for stocks, while market participants digested earnings from U.S airlines and AT&T, along with mixed readings on economic data. Investor sentiment gradually improved by early afternoon, with seven of the 11 main S&P 500 sectors rising. The S&P 500 healthcare sector hit a fresh record high, while industrials were the biggest gainers. Supporting the mood was data showing the number of Americans filing new claims for unemployment benefits last week dropped to a fresh one-year low. The Labor Department report suggested layoffs were subsiding and expectations were rising for another month of blockbuster job growth in April. Investors are now awaiting quarterly results from technology behemoths next week to provide markets with some direction. Shares of Apple Inc. rose 0.3%, helping the tech-heavy NASDAQ remain afloat.

Dow Jones Industrial Average

The Dow Jones Industrial Average declined 0.94%. The best performer of the session on the Dow Jones Industrial Average was Salesforce.com Inc., which rose 0.39% or 0.89 points to trade at 231.45 at the close. Meanwhile, McDonald’s Corporation added 0.34% or 0.78 points to end at 233.04 and Visa Inc. Class A was up 0.07% or 0.15 points to 227.60 in late trade. The worst performers of the session were Dow Inc., which fell 6.01% or 3.90 points to trade at 60.92 at the close. Walgreens Boots Alliance Inc. declined 2.72% or 1.47 points to end at 52.58 and JPMorgan Chase & Co was down 2.12% or 3.19 points to 147.35.

NASDAQ 100

The NASDAQ index lost 0.94%. The top performers on the NASDAQ Composite were Ocugen, Inc. which rose 42.77% to 9.2800, Codiak BioSciences Inc. which was up 35.41% to settle at 15.87, and Qualtrics International Inc. which gained 22.92% to close at 41.57. The worst performers were Evolus Inc. which was down 18.94% to 9.50 in late trade, Tiptree Inc. which lost 13.01% to settle at 12.37 and Sleep Number Corp which was down 11.92% to 110.04 at the close.

Oil

Oil futures finished with a slight gain yesterday, after falling to their lowest intraday levels in more than a week before reversing course, as traders tried to assess the impact on energy demand of the recent surge in COVID-19 cases in Asia in particular. Despite the pessimism seen this week, the overall oil demand remains robust in two of the largest oil markets, the U.S and China. Data Thursday showing new U.S jobless claims now at pandemic lows strengthens that optimism. Despite the rapidly rising cases in India, economic activity, road traffic, and energy consumption remain well above the levels seen last year. Economic activity and oil demand are not expected to decline to the levels seen last year, even though the COVID-19 cases are far greater. West Texas Intermediate crude for June delivery tacked on 8 cents, or 0.1%, to settle at $61.43 a barrel on the New York Mercantile Exchange after tapping a low at $60.61. For oil prices to build up again, it will take global signs of recovery, and such indications are now scarce in key Asian countries.

Precious and Base Metals

Gold slipped 1% yesterday, retreating from a two-month high, as an uptick in the dollar and U.S Treasury yields hurt the metal's appeal, while palladium lingered near an all-time high. Spot gold was 0.7% lower at $1,780.36 per ounce, after hitting its highest since Feb. 25 at $1,797.67. U.S. gold futures dipped 0.7% to $1,780.90. $1,800 was a bit of psychological resistance, so we've come back with tests. The dollar and the 10-year yields are both a little bit higher and that's pressuring gold as well. The dollar was up 0.1% versus a basket of other major currencies, with the 10- year yield rising as far as 1.587%. Gold has dropped 6% so far this year, mostly pressured by rising yields. The downside in gold is likely to be short-lived amid central bank buying and increasing demand for physical gold from China and India. Switzerland in March recorded its biggest monthly gold exports in ten months as shipments to India jumped. But clouding that outlook was a record COVID-19 surge in the country. Also, dimming bullion's appeal was data showing a drop in claims for unemployment benefits last week, strengthening expectations for another month of job growth in April. Meanwhile, palladium eased off a record high of $2,891.50 per ounce and was last down 1.7% at $2,827.20. Silver slipped 1.6% to $26.14 per ounce and platinum fell 0.7% to $1,205.89. Copper prices in London fell yesterday on subdued demand from physical buyers reluctant to purchase the metal after a 21% rally so far this year, although a softer dollar lent some support. Copper prices have more than doubled since March last year to near a decade high on strong macro and fundamental factors, diminishing appetite from some end-users, especially as an economic recovery in top consumer China slowed.

Traditional Agricultures

Corn, wheat, and soybean futures hit multi-year highs yesterday as concerns about tightening global grain supplies triggered short-covering and fund-driven buying. Wheat futures climbed on unfavorable weather in North America and the prospect of high corn prices boosting demand for wheat in livestock feed. This rally is because corn is in short supply and is likely to remain so in 2021-22.

S o u r c e: News & Quotes (Courtesy: Reuters)

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Market Update: US30 Has Support But Can it Clear Resistance to Set New Records?

Hi traders, today we’re looking at the US30 daily chart as buyers have set support, but still have resistance to beat to get the trend back on track.

Looking at the current Dow D1 chart, we can see price remains on two trend lines. With the fast to med-term being the main trend at this point. Price has made a two-bar retracement back to the fast trend before yesterday’s fightback reconfirming current support seen at 33,800. This is why we have noted this point as it’s a repeat of the previous price action. You will notice this support came from previous resistance. This pattern was also seen in March. This can also be called a step.

Resistance becoming support is a good sign in a trend. It’s good to see it repeating as it shows price can respect the pattern. That’s not saying this will work on this occasion but it’s a good sign from a buyer point of view.

Dow price today has also started to test the minor downtrend line, but we still see supply and resistance remaining from 34,110 to 34,180. Buyers need to build on yesterday’s move and break this area of resistance to suggest that we may have a continuation in the process. The next step after that will be a test and break of the current all-time high.

If we see resistance hold and price moves back to support caution on the buy-side could be taken as the current retracement has widening bars which can be seen as a small warning unless US30 price breaks higher.

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Trading Week Ahead

A Mixed Week for Currencies

Last week, we saw some mixed results on the currency front as the USD pulled back as yields fell and profit takers set in. A few factors came into play, one being the IMF upgrading their global growth forecasts. Risk majors were far from unified as the AUD had a mixed week, while the EUR strengthened strongly and the GBP fell. After basically 3-months of gains to the JPY, the USDJPY finally succumb to decent seller pressure. Price was unable to get back to the previous week's highs, and I think that gravity looks to have finally caught up.

Staying on the Yen risk majors had a mixed week with the AUD and GBP falling while the all-conquering EUR moved higher.

The Fed Continues Its Support 

The Fed signaled that the central bank is nowhere near to reducing its support for the US economy. The Fed advised that an uptick in prices will most likely be temporary, and any uptick in COVID cases could slow the recovery. Inflation is also seen to be unlikely at this stage. Some of these points don’t do the USD any favors but are supportive of stocks.

Thursday’s unemployment claims came in higher than expected at 744K this was a touch surprising considering the stronger NFP data seen on the previous Friday.

Stocks Had a Stellar Week

Last week was an excellent week for stock indexes. The Dow and SP500 both hit new all-time highs. Tech stocks looked to have a better week as the Nasdaq outperformed the Dow. The S&P500 was a close second; this index does have a decent tech component, so this was a contributing factor in its gains.

Indexes in Europe moved higher, the FTSE and CAC were the better performers for the week. The DAX and Eurostoxx50 failed to find more momentum after amazing weeks prior.

Oil and Gold Highlights

Oil spent most of the week lower but did see some demand come back into the market on Friday. Crude stockpiles came in at -3.5M during the week, and the outlook remains positive on lower stockpiles and demand as economic growth picks up. One worry remains around the current third wave in Europe and what lockdown actions might do to demand.

Gold continues to remain rangebound, currently price trading between 1700 to the downside and 1758 to the upside. The weaker USD gave buyers some direction last week, but for now, price remains in a medium-term downtrend, and we need some direction to give us an idea of who really has control on the short term.

Looking Ahead

This week we have some significant data coming up, US CPI, which remains a bit of a hot topic and US retail sales data which I would think traders will be watching closely to gauge signs of the current US recovery. Back in Australia, we have unemployment data, and this is the first after the end of Jobkeeper in March. Another to watch out for will be the Chinese GDP which is expected to increase by 18.3%.

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

FOREX-Pulse of the Market

The biggest news yesterday turned out to be concerned about Johnson & Johnson vaccine and not the U.S inflation report. The country’s two health agencies (FDA and CDC) recommended halting the use of the one-shot vaccine after 6 cases of a rare but deadly blood clot disorder. Six cases is small when measured against the nearly 7 million Americans that have received the Johnson & Johnson vaccine but coming off the heels of similar concerns related to AstraZeneca’s shot, regulators are being very cautious as the disorder may appear up to 2 weeks from vaccination. Even if the FDA and CDC deem the vaccine safe after an investigation period, this revelation will increase vaccine skepticism/resistance, dealing a blow to the government’s accelerated vaccination plans. This is bad news for stocks, which ended the day lower, and the U.S. dollar which gave up earlier gains. U.S consumer prices rose 0.6 percent in the month of March with core prices rising 0.3 percent. While these increases were more than expected, investors worried about a much larger upside surprise. The more modest increase made it easier for everyone to heed the Federal Reserve’s guidance and look past the rise. Thursday’s retail sales report is the most important piece of U.S data on this week’s calendar. With a sharp increase in spending expected, the dollar’s decline may be limited. The Fed’s Beige Book report will also be released on Wednesday and optimism is widely anticipated. After the J&J news, the euro reversed its slide to end the day higher against the greenback. German investor confidence fell more than expected in April. Widespread lockdowns and slow vaccine rollout caused the country’s ZEW survey of investor sentiment to fall to 70.7 from 76.6. Not only was this the first drop since November but economists were looking for an increase. The Eurozone ZEW index also dropped from 74 to 66.3. Euro outperformed sterling because U.K GDP expanded less than expected in the month of February. The economy grew 0.4% against 0.6% forecast. Industrial production increased but the trade balance deteriorated significantly. Still, with the outlook brighter for the U.K than the Eurozone, we expect this outperformance to be short-lived. The Canadian and Australian dollars failed to rally despite higher oil prices. AUD was set back by weaker business confidence.

Euro

The single currency stood near three weeks high against the Greenback after a larger-than-expected uptick in a U.S consumer price gauge did not spark wider fears about accelerating inflation and the Federal Reserve's tapering. Still, many investors are wary of risk of further acceleration in the U.S economy as vaccination rollouts have moved fast. Overall, the EUR/USD traded with a low of 1.1865 and a high of 1.1918 before closing the day around 1.1899 in the New York session.

Yen

The Japanese Yen gained yesterday as the dollar fell as the U.S consumer price index jumped 0.6% in March versus the previous month, the largest gain since August 2012, and rose 2.6% from a year earlier, both 0.1 percentage point above market expectations. Inflation has been expected to accelerate in the April-June quarter. Overall, the USD/JPY traded with a low of 109.19 and a high of 109.94 before closing the day around 109.64 in the U.S session.

British Pound

The British Pound rose for a second day against the dollar and the euro yesterday, as analysts said Britain’s vaccination drive had not been derailed by its curbing of the use of AstraZeneca’s COVID-19 vaccine. The pound lost 1% against the dollar last week as Britain advised alternatives to the Oxford-AstraZeneca vaccine to vaccinate under-30s. Overall, the GBP/USD traded with a low of 1.3668 and a high of 1.3748 before closing the day at 1.3702 in the New York session.

Canadian Dollar

The Canadian Dollar was little changed against its U.S counterpart yesterday as oil rose and U.S data showed a tamer-than-expected increase in U.S underlying inflation, with the loonie rebounding from an earlier six-day low. Business sentiment in Canada continues to improve and many firms consider the impacts of the COVID-19 pandemic behind them. Overall, USD/CAD traded with a low of 1.2522 and a high of 1.2608 before closing the day at 1.2530 in the New York session.

Australian Dollar

The Australian Dollar has found itself undermined by vaccine rollout concerns in Australia and a mixed business confidence index from the country. National Australia Bank’s (NAB) Business Confidence edged down to 15 in March missing forecasts of 18. Despite the hawkish comments from the bank, Australia’s economic recovery seems to be dependent on the coronavirus vaccine rollout. Overall, AUD/USD traded with a low of 0.7584 and a high of 0.7646 before closing the day at 0.7638 in the New York session.

Euro-Yen

EUR/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 58 and lies above the neutral zone. In general, the pair has gained 0.25%.

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 46 reading and lies above the neutral zone. On the whole, the pair has gained 0.15%.

Aussie-Yen

Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 50 reading and lies above the neutral region. In general, the pair has lost 0.09%.

Euro-Sterling

This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 62 and lies below the neutral region. Overall, the pair has gained 0.12%.

Sterling-Swiss

This cross is trading below 14, 50, and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 42 and lies above the neutral region. In general, the pair has lost 0.20%.

Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Daily Market View-U.S Stock Market

The S&P 500 closed at another record high yesterday and the NASDAQ composite index jumped, as investors shook off concerns about the halt in Johnson & Johnson’s COVID-19 vaccine rollout and strong U.S inflation. The drug maker’s shares hit a one-month low before recovering some losses to close down 1.3%, as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic. The news came as U.S data showed the consumer price index (CPI) in March rose by the most in more than 8-1/2 years, kicking off what the majority of economists expect will be a brief period of higher inflation. U.S futures initially dropped on the J&J news, but pared losses after the CPI data. Solid demand for yesterday’s U.S Treasuries issue pushed down yields further, highlighting investors’ lack of concern about any imminent bump in interest rates. The Dow Jones Industrial Average fell 68.13 points or 0.2%; the S&P 500 gained 13.6 points or 0.33% and the NASDAQ added 146.10 points or 1.05%.

Dow Jones Industrial Average The Dow Jones Industrial Average declined 0.20%. The best performers of the session on the Dow Jones Industrial Average were Apple Inc., which rose 2.41% or 3.16 points to trade at 134.40 at the close. Meanwhile, Boeing Co added 1.45% or 3.62 points to end at 253.14 and Salesforce.com Inc. was up 1.40% or 3.21 points to 231.97 in late trade. The worst performers of the session were International Business Machines, which fell 2.50% or 3.37 points to trade at 131.22 at the close. Nike Inc. declined 2.28% or 3.12 points to end at 133.52 and Johnson & Johnson was down 1.32% or 2.13 points to 159.51.

NASDAQ 100 The NASDAQ index climbed 1.05%. The top performers on the NASDAQ Composite were Mackinac Financial Corporation which rose 59.53% to 21.01, Novocure Ltd which was up 49.66% to settle at 197.37, and vTv Therapeutics Inc. which gained 33.07% to close at 3.420. The worst performers were Avenue Therapeutics Inc. which was down 23.91% to 5.41 in late trade, Adapthealth Corp which lost 19.57% to settle at 29.75, and Lucira Health Inc. which was down 18.70% to 8.87 at the close.

Oil

Oil prices settled higher in yesterday’s trading session on strong Chinese import data, but the rally was capped by concerns that pauses on the Johnson & Johnson vaccine could delay economic recovery and limit oil demand growth. U.S crude oil futures gained 48 cents, or 0.8%, to $60.18 a barrel. We’ve been trading in a range, and need clear demand data and direction on U.S inventories to break out of this trough. China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery, as global demand picked up amid progress in COVID-19 vaccinations. Import growth surged to the highest in four years. Crude oil imports into China jumped 21% in March from a low base a year earlier as refiners ramped up operations. The Organization of the Petroleum Exporting Countries in its monthly report raised its forecast for 2021 oil demand growth by 70,000 barrels per day from its previous forecast to 5.95 million BPD, or 6.6%.

Precious and Base Metals

Gold prices rebounded yesterday from their lowest levels in more than a week after data showing a sharp rise in U.S inflation bolstered bullion's appeal as an inflation hedge and weighed on the dollar. Spot gold was 0.7% higher at $1,744.33 per ounce after earlier dipping to $1,722.67, its lowest mark since April 5. U.S gold futures rose 0.7% to $1,743.90. We needed to see some inflation to get gold moving and we saw it this morning with that CPI number. U.S consumer prices rose by the most in more than 8-1/2 years in March, kicking off what most economists expect will be a brief period of higher inflation. The U.S dollar slipped to three-week lows after the data, making gold cheaper for holders of other currencies, while benchmark 10-year Treasury yields also drifted lower. Further supporting safe-haven gold were concerns raised by U.S. health officials' decision to recommend a pause in the use of Johnson & Johnson's COVID-19 vaccine. At the moment, we need to see a decisive breakout above $1,765 in order to spark another wave of buying up to $1,800. The $1,750 level has been a strong resistance, so we're getting up near that level. Adding that geopolitical risk tied to news of Iran stepping up its nuclear enrichment had also sparked a lot of buying of gold and silver. Silver rose 2.1% to $25.36 per ounce, while palladium gained 0.5% to $2,689.67 after climbing to its highest level since March 18 at $2,710. Platinum fell 1.1% to $1,157.31 per ounce, having earlier dipped to its lowest price in about two weeks at $1,155. Copper’s turbo-charged rally has stalled over the last few weeks as funds have taken profits and physical buyers have refused to chase prices higher. Yet there is real tightness in the copper market. It’s just that it’s playing out upstream in the opaque raw materials segment of the supply chain.

Traditional Agricultures

Corn and soybean futures rose in yesterday’s trading session, bouncing back from two days of declines on bargain buying by investment funds and concerns about tight supplies of both commodities. Wheat futures also firmed, with concerns about dry soils limiting U.S and European production underpinning prices. Corn and soybean futures found support at key technical points overnight.

Source: - News & Quotes (Courtesy: Reuters)

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

FOREX-Pulse of the Market

The greenback extended lower against all of the major currencies with sterling leading the gains. Aside from CPI and retail sales, the Empire State and Philadelphia Fed surveys are scheduled for release. A number of Federal Reserve officials will also speak. On Sunday, Fed Chairman Powell said the U.S is at an inflection point, the outlook brightened significantly and with America going back to work, the economy will start growing more quickly. He also cautioned against reopening too quickly and stressed the importance of taking steps to avoid flare-ups in virus cases that could set back the recovery. Euro kicked off this busy trading week with modest gains against the U.S dollar. Despite continued lockdowns in some of the region’s biggest economies, slow vaccine rollout and lower growth forecasts from France and Spain, the single currency has been extraordinarily resilient. It quietly moved higher since the beginning of the month rallying from 1.17 to 1.19. Better than expected retail sales data helped extend the pair’s gains yesterday. Consumer spending rose 3% in the Eurozone in February, double the market’s expectations. Spending in January was also revised up to -5.2% from -5.9%. This follows last week’s upwardly revised German PMIs and the strongest German business confidence since June 2019. So while the near term outlook is grim, the recovery is delayed not threatened and that prospect keeps economic activity going. The question now is how much longer can the rally continue with U.S inflation and retail sales numbers scheduled for release this week. Vaccinations and stimulus checks should drive strong spending in March. Economists are looking for 5.7% rise but the numbers could easily beat expectations. Inflation is also on the rise and between these two reports, we could see renewed demand for the greenback. Add to that the possibility of Germany lowering its growth forecasts and there’s a good chance the rally could fizzle quickly this week once U.S CPI numbers are released. Before that, the German ZEW survey is due and it will be interesting to see if investor confidence is finally dented by recent lockdowns. Sterling traded sharply higher ahead of today’s industrial production, monthly GDP and trade balance reports.

Euro

The single currency posted slight gains in yesterday’s trading session. The euro has been on a steady decline since mid-February, but reversed directions and gained 1.19% last week, its best weekly performance since mid-December. If the upward trend continues, the euro could pressure the symbolic 1.20 line as early as this week. Overall, the EUR/USD traded with a low of 1.1865 and a high of 1.1918 before closing the day around 1.1899 in the New York session.

Yen

The Japanese Yen gained yesterday as the dollar slipped yesterday towards a three-week low as Treasury yields traded near recent lows and traders awaited crucial U.S inflation and retail sales data in coming days. The dollar’s performance has been tied to U.S Treasury yields for most of 2021, after concern about rising inflation in the United States. Overall, the USD/JPY traded with a low of 109.19 and a high of 109.94 before closing the day around 109.64 in the U.S session.

British Pound

The British Pound rose yesterday, recovering partly after a weekly loss. The UK’s vaccine rollout - one of the fastest in the world - helped the pound have its best quarter since 2015 in the first three months of 2021. With vaccinations now fading as a driver of GBP, investor attention should turn to the sustainability of economic growth. Overall, the GBP/USD traded with a low of 1.3668 and a high of 1.3748 before closing the day at 1.3702 in the New York session.

Canadian Dollar

The Canadian Dollar edged down against its U.S counterpart in yesterday’s trading session, unwinding some of the gains logged in the previous session, but buoyant oil prices helped keep the currency near recent highs. Investors' expectation for a continued rise in U.S Treasury yields has been supportive of the greenback. Overall, USD/CAD traded with a low of 1.2522 and a high of 1.2608 before closing the day at 1.2530 in the New York session.

Australian Dollar

The Australian Dollar opened the week slightly lower as investor mood soured following setbacks in the country’s vaccination program, while the New Zealand dollar was little changed. Australia has abandoned a goal to vaccinate nearly all of its 26 million population by the end of 2021 following advice that people under the age of 50 take Pfizer’s COVID-19 vaccine rather than AstraZeneca’s shot. Overall, AUD/USD traded with a low of 0.7649 and a high of 0.7659 before closing the day at 0.7616 in the New York session.

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 59 and lies above the neutral zone. In general, the pair has gained 0.25%.

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 48 reading and lies above the neutral zone. On the whole, the pair has gained 0.15%.

Aussie-Yen

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 48 reading and lies above the neutral region. In general, the pair has lost 0.09%.

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 60 and lies below the neutral region. Overall, the pair has gained 0.12%.

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 40 and lies above the neutral region. In general, the pair has lost 0.20%.

Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.