News & Analysis

U.S stocks rise on Trump EU talks – USD stalls; Nasdaq new records – Tech looking at falls tonight after FaceBook miss

Jul 26, 2018 | Market Updates

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21:45 EUR Main Refinancing Rate Expected hold at 0.00%
22:30 EUR ECB Press Conference
22:30 USD Core Durable Goods Orders

U.S stocks finished higher in last night’s session, the DOW gained 172.16 pts; the S&P500 gained 25.67; the Nasdaq added 91.47 breaking into new record territory.

Optimism was high in last night’s session as President Trump reportedly gets concessions from EU to avoid a trade war, indexes surged in the last hour of trading after Dow Jones reported that the EU has agreed to import more U.S. soybeans. Further good news for equity’s, a bipartisan group of Senators announced a bill that could potentially delay any auto tariffs implemented by the Trump administration. The bill would require “the International Trade Commission (ITC) to conduct a comprehensive study of the well-being, health, and vitality of the United States automotive industry before tariffs could be applied.” Tech was supported by a strong session from, Google-parent Alphabet, Facebook and Amazon.

But it wasn’t all blue sky FaceBook reported after the closing bell. The company missed projections on revenue and global daily active users this quarter. Shares were down as much as 20 % in out of hours. At the current after hour’s prices, Facebook is poised to lose more than $123 billion in market value. This is going to make tonight’s open interesting on the Tech side.

“The Facebook guidance debacle will be a tough pill to swallow for the bulls and weigh on FANG names as this comes on the heels of a Netflix miss as well last week,” said Daniel Ives, head of technology research at GBH Insights. “Facebook’s outlook will cause worries on the Street and that could spread to other names with stock multiples coming under attack. Facebook’s nightmare guidance will spook tech investors with a near-term white-knuckle period ahead.”

European stocks closed lower, the FTSE lost 50.79 and the DAX fell by 110.06. Investors waiting on the Trump EU talks. (which ended well). Deutsche Bank shares closed 1.4% lower after reporting a net profit of 401 million euros ($468 million) during the course of its second quarter. Indivior shares fell as much as 7.7% after reporting a 24% drop in second-quarter pretax profit. – CNBC

Local and Asian markets are trading mixed this morning, the ASX200 -19 while the Nikkei is 23 pts higher. Chinese markets are slightly lower, the Hang Seng +256.

Oil jumped on surprise inventories last night. U.S. crude inventories fell by 6.1 million barrels in the week to July 20, according to government data, compared with expectations for a decrease of 2.3 million barrels. USOUSD added 56 cents but failed to close above $69. This morning buyers have moved back above $69. We still see this rally as a counter with the next resistance test at $69.50.

The USD moved lower post meeting between President Donald Trump and European Commission President Jean-Claude Juncker. U.S. President Donald Trump said he hoped “to work something out on a fair deal with Europe,” during his meeting with Jean-Claude Juncker.

“Short-term traders had to take notice of Trump’s comments, but other countries did not take the bait. The dollar is fairly stable. There is no currency war,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said.

Risk found direction after this hit the market making up ground to the USD. The EUR, GBP and AUD added 40+ pips. Buying has continued into today’s Asian session. The USD JPY continues to trade in the 110 handle. Risk closed higher to Yen but remains I corrective patterns for now. Gold capitalized on a weaker USD adding over $7. Buying solid again today, price holding above 1234.50.

Traders will be starting to look towards Friday’s U.S. GDP, expected to come in at 4.1% that’s a big number over the last 2.0% any decent miss could get nasty for the USD.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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