News & Analysis

Stocks mixed; US higher as Syrian fears ease – earnings; Europe lower due to political worries & WPP; Oil retreats after 67.60 test; GBP continues to charge

Apr 17, 2018 | Market Updates

Upcoming high impact news:

Ôû© 12:00 CNY GDP
Ôû© 18:30 GBP Average Earnings Index
Ôû© 22:30 USD Building Permits

US markets – rallied on Monday as fears of escalating conflict in Syria eased for the moment, while some of the biggest U.S. companies reported strong quarterly results. Earnings season continued to show strong momentum as J.B. Hunt and Bank of America reported better than expected results. “This represents a high bar for stocks to get over and [the] pattern of the past 20 years is that stocks have tended to struggle when upside earnings surprises have slowed,” said Bruce Bittles, chief investment strategist at Baird. “Elevated earnings expectations are coming with stock market valuations stretched.” In overnight data, core retail sales hit 0.2% as expected and retail sales beat expectations coming in at 0.6%

The Dow Jones added 212.90, the S&P500 added 21.54 and the NASDAQ closed 49.63 pts higher.

European markets – failed to follow the US lead trading in the red for the session. Europe’s food and beverages stocks were some of the worst performers amid earnings news. WPP shares which have already fallen around 30 percent this year fell by a further fell 6.5 percent by Monday after its CEO Martin Sorrell quit due to allegations of personal misconduct.

The FTSE lost 66.36, the DAX lost 50.99 and the CAC closed 2.06 pts lower.

Oil – fell as tensions in Syria eased combined with profit taking after some very strong gains last week. Price snapped a 5-day winning streak last night. Last week price rallied over five dollars. $67.60 remains current 2018 high for buyers to retest. Currently, Fund managers hold more Brent futures and options than at any time since records began in 2011, data from the InterContinental Exchange showed.

Forex – choppy night with the USD starting the London session with a pulse, this was short lived as sellers moved back in and risk picked up renewed interest. Better than expected retail sales data failed to give the USD a lift. The EUR and the GBP were the best performing currencies last night. The GBP continued its hot April run adding 101 pips to the USD and 58 pips to the JPY. This morning the cable has touched new 2018 highs hitting 1.4336. Pairs were mixed to the Japanese Yen, the USD and AUD fell while the EUR and GBP closed higher. Despite a weaker oil price the USDCAD fell, that show’s you the level of interest in the USD during last nights NY session. The USDCAD finished 28 pips lower closing around the 1.2560 range low. Gold had a choppy session with mixed influences, this morning the market has had more direction. Price is trading 2.80 higher, traders 1348.80 is the current 4H resistance high to watch.

GBPUSD – hit new 2018 highs this morning, has price started to overextend? If we see a pullback there’s a good chance 1.4252 could come in as support.

Good trading from Eightcap.

Sources; CNBC. All times are AEST

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.