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Equity markets finish the week mixed; Oil takes a breather; Risk ends the week higher

May 14, 2018 | Daily Market Outlook

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US markets – ended the week mixed, the Dow added 91.64 the S&P500 added 4.65 and the NASDAQ lost ground closing 2.0p points lower. Healthcare was Friday’s big mover as President Trump spoke about controlling drug prices. Healthcare stock price plunged at the beginning of Presidents Trumps speech. As the speech went on, the selling stopped. Soon, PBMs like CVS Health Corp., which ended the day up 3.2 percent, and Express Scripts Holding Co., which bounced 2.6 percent, were on the upswing. Makers of some of the world’s most expensive drugs also soared. Biotechs including Biogen Inc., up 3.1 percent, Regeneron Pharmaceuticals Inc., up 6.2 percent, and Celgene Corp., up 2.6 percent, all bounced back from late-afternoon doldrums. The S&P500 was driven higher by telecom companies. “What has gotten stocks going again is the reality that maybe rates are not going to be rising to the moon and the dollar is not going to continue to strengthen,” Krishna Memani, the chief investment officer at OppenheimerFunds Inc., said in an interview at Bloomberg’s New York headquarters. “The underlying fundamentals in terms of economic growth, earnings, has been extraordinarily good.” Earning continue to remain a strong driver for stocks as they closed out a positive week.

Europe – ended mixed, the FTSE added 23.58 – the DAX fell by 21.63 and the CAC lost 4.01. European stocks on track to record their best winning streak since March 2015. While the first quarter earnings season was winding down in Europe, basic resources.SXPP was the best-performing sector after shares in ArcelorMittal (MT.AS) rose 2.2 percent. The world’s biggest steelmaker beat earnings forecasts and gave an upbeat outlook for 2018. While the Italian banking sector. FTIT8300 has been under pressure recently on the back of political jitters, the sector is up more than 13 percent this year while Italy’s benchmark FTSE MIB.FTMIB has risen 10 percent.

Oil – ended the week in the red losing 94 cents to settle at $70.47. Price still remains at strong levels. Iran sanction opposition and rising U.S drilling are some of the current concerns in the market. U.S sanctions on Iran could remove up to 1 million barrels a day if introduced. U.S. drillers added 10 oil rigs in the week to May 11, bringing the total count to 844, the highest level since March 2015. Hedge funds and money managers slashed their bullish wagers on U.S. crude in the latest week to the lowest level in nearly five months, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Forex – The USD settled lower to most currency’s on Friday but closed higher to the Canadian dollar. Weaker than expected Canadian jobs data gave the USDCAD a boost. The AUD EUR and GBP all finished in the black and have continued to rally today. The JPY edged slightly higher to a weakening USD. Major risk currencies made gains to the Japanese Yen and have continued higher this morning. Gold had a strange session on Friday, it failed to trade higher to a weaker USD settling $3 lower after rallying to test 1325.30 resistance. Buyers are active this morning, price is trading $3.60 higher.

Good trading from Eightcap.

Sources; Reuter – Bloomberg All times are AEST

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