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US Market Outlook 19 Sept 2018

Posted by Tim Sholl on 19-Sep-2018 23:09:46

Markets continue to ignore the potential problems that may arise from the US/China trade dispute and continue to assume that the Chinese will give in to US demands , but I would not be so sure as China is not known to back down . Analysts have estimated that 2.5% of world trade is now affected by tariffs and this would jump to 4.0% if the extra proposals are implemented by the USA. World growth is at risk as business confidence in Asia has fallen to 3yr lows.

So as investors continue to look through any negative news we see the stock indices moving higher , bond yields also moving higher , and strangely the USD weakening.  The Chinese government has come out and said that it would not use a weak currency as a means of offsetting the tariffs and this has helped improve the risk environment. Meanwhile the underlying US economy continues to remain strong and bond yields are pushing higher with the 10  yr now at 3.04% close to yearly highs at 3.10%.

 In news from the UK the PM Theresa May has rejected a deal from the EU around the Northern Ireland border which has seen a fall in the GBP from 1.3214 to now 1.3135 as some risk now comes back to that market.

Latest prices are:  

Dow Jones 26241 down 10 / S&P500 2901 down 3 / Nasdaq 100 at 7486 down 8.

EUR at 1.1674 up 8 / GBP at 1.3140 down 8 / JPY at 112.30 stronger by 4 / DXY at 94.20 down 3.

Gold at 1205 up 7.00 / WTI Crude oil at 69.81 flat after a strong up session on Tuesday with market concern over supply the main driver.

 

Daily Chart - Copper futures - HGc1 - Sharp rally from 260 support level has opened a move to 300 as sentiment improves.

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Topics: Trading, Market News, US Market Outlook