News & Analysis

Earnings lift stocks Dow jumps 547 points; USD hits 2week lows; Uk CPI and Fed Minutes to come tonight

Oct 16, 2018 | Market Updates

Upcoming high impact news:

19:30 GBP CPI
First Day EUR EU Economic Summit
01:30 Oil Crude Oil Inventories
05:00 USD FOMC Meeting Minutes

U.S stocks rebounded overnight the Dow posting is best one day rally since March. Earnings beats the main driver for buyers. The Dow closed 547 points higher, the S&P500 closed 59.13 points higher and the Nasdaq gained 214 points as tech shares jumped. Netflix jumped by 14% in after-hours trade as earnings easily beat expectations. Morgan Stanley reported better-than-expected earnings, along with Dow-members Goldman Sachs, Johnson & Johnson and UnitedHealth.

Kim Forrest, senior portfolio manager at Fort Pitt Capital, said more companies should report stronger-than-expected earnings moving forward. “We were overly worried about the economy at the start of October,” Forrest said. “I think the bar has been set pretty low by sell-side analysts.” – CNBC

European markets continued to watch Brexit developments, but US earnings took centre stage. The Dax added 162, the FTSE closed 30 points higher. Markets are also looking at developments from the disappearance of Jamal Khashoggi — a U.S. resident and prominent critic of Crown Prince Mohammed bin Salman — disappeared after entering the Saudi consulate in Istanbul, Turkey on Oct. 2.

Oil fount back from close to new weekly lows to finish higher. Strength in the equity markets a factor in the recovery. Oil production from seven major U.S. shale basins is expected to rise by 98,000 barrels per day (bpd) in November to a record of 7.71 million bpd. Iran exports close to 1.5 million bpd of crude in the first two weeks of October, down from 2.5 million bpd in April. Saudi Arabia continues to face political pressure over the disappearance of journalist Jamal Khashoggi. USOUSD closed 47 cents higher at 71.99.

Gold lost 1.80 after testing 1232.37 to the upside, traders will need to work out its value point with stocks on the rise and the USD backtracking. 1223.50 seen as short-term support. The USD hit 2-week lows last night, emerging currencies and risk majors mainly increasing. The EUR pulled back from a 42 lead to finish in the red. The GBP settled higher but pulled back from a 84 pip gain at one stage. Ongoing Brexit developments driving the GBPs gain. The AUD spent most of the day in the red but gained demand to close 12 pips higher. The Risk posted good to strong gains to the Yen. The USDJPY added 48 pips but the USDCAD dropped to new weekly lows losing 52 pips.

Bitcoin added 65 USD, this morning risk is flat to the USD and slightly higher to the Yen. The ASX200 is up a further 50 points after yesterday’s rebound., price back above 5900. Busy night data wise coming up with UK CPI, EU Economic Summit and the Fed minutes.

Good Trading from Eightcap

Sources; CNBC – All times are AEDT

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