News & Analysis

S&P500 retakes 2800 – NASDAQ – DOW end week higher; Risk rebounds to USD – Yen selling continues

Jul 16, 2018 | Market Updates

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Friday saw gains for U.S. stocks with the S&P500 closing at it’s highest point since February and the NASDAQ getting close to new record highs. The Dow Jones 94.52. Tech support and lifted indexes.  Amazon rose to an all-time high, along with Facebook and Microsoft, lifting the broad S&P 500 index. For the first time since February 1st the S&P500 closed above 2800.

“2,800 has been a significant level both mentally and technically for the market,” said Jeff Kilburg, CEO of KKM Financial. “I think this will be a short-lived move above 2,800, however” as trade concerns and corporate earnings releases keep gains at bay.

Jeremy Klein, chief market strategist at FBN Securities, said the “response to the earnings announcements from three of America’s biggest money center banks seemingly hints at an uneven upcoming reporting season,” He also added, however, that ”if companies can maintain their extremely elevated profit forecasts for the next several quarters, then stocks should enjoy a stiff tailwind at their backs.“

In Europe, shares lifted to finish the week in the green. The EURO Stoxx 50, DAX and FTSE closed in the black. British recruitment company Hays boosted the industrials sector by saying on Friday that a rise in hiring in Germany and Australia had boosted fourth-quarter net fees by 14%. Shares in French technology consultancy Altran slumped 28.2% after the company said it had uncovered $10 million in false purchasing orders at recently acquired U.S. firm Aricent. Trade war fears continue it bubble in the background but are having less impact on trader sentiment at the moment.

Asian trade is mixed, the Nikkei is closed for a bank holiday. The ASX200 is 17 pts lower while the Hang Seng +44 and the Shanghai Composite -2.02 in thinner trade with Chinese GDP data to be released at 12:00 pm today. The Market is expecting 6.7% growth in the Chinese economy.

Oil ended the week volatile rallying up to $70 before retracing gains to close flat at $69.54. Traders eyed potential supply increases by Russia and other oil producers. President Trump rejected calls for new sanction delays against Iran. “Crude oil prices fell as fears of supply disruptions eased. News that Libya’s state oil producer had restarted output from a major oilfield ignited the selloff earlier in the week,” ANZ Bank advised.

The market focus shifted towards possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike. Russia and other major oil producers may increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday.

This morning USOUSD is trading 35 cents higher, 65.25 continues to act as short-term support for buyers.

Gold as with a few risk currencies broke weekly lows only to recover and finish higher for the session. Gold closed lower but buyers held 1240.70. This morning price has moved higher adding $4.50. As mentioned, the USD started Friday’s London session in demand risk majors all traded lower.

The USD faded from highs as the New York session kicked into gear. The dollar’s pullback likely stemmed from modest gains on Wall Street and a drop-off in trading volume before the weekend, analysts said. “The U.S. dollar has been moving inversely with stocks. They could have restrained the dollar somewhat,” said Eric Viloria, currency strategist at Wells Fargo Securities in New York.

Things were and still are still very one dimensional for the Yen. Risk majors are following up gains on Friday with further gains today. The AUD, EUR and GBP all trading 30 pips higher. The USDJPY is trading just above 112.50. Bitcoin has gapped higher on this mornings open. Price starting the week at 6352, decent short-term resistance remains 6360 – 6370 traders.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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