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US Market Outlook 20 Sept 2018

Posted by Tim Sholl on 20-Sep-2018 23:23:40

Investors continue to ignore the potential fall out from the US/China trade dispute and instead continue to focus on the underlying strength of the US economy and the ability for companies to grow their profits . Analysts believe that the tariffs placed on Chinese goods mostly at the rate of 10% will not have a large economic input and is unlikely to upset the consumer balance sheet.

Markets instead are focusing on corporate profits , dividends , buybacks , and M&A activity , and watching the USD lose some of the recent strength even with US10 yields now up at 3.09% near 2018 highs. Stock indices continue to rally with the S&P500 at a new record , the Dow within 1% of record highs and the Nasdaq100 beginning to head higher after recent weakness in Amazon , Facebook , and Apple knocked the index lower. The weakness in the USD seems to be a matter of market positioning because economic performance continues to favour the US as does interest rate levels with the Fed clearly moving on with normalising monetary policy while both the ECB and the BOJ continue to hold the stimulus at maximum levels.

Current prices are as follows:

Dow Jones 26550.4 up 146 / S&P500 at 2919 up 11 / Nasdaq 100 at 7535 up 45

EUR at 1.1760 up 89 / GBP at 1.3270 up 127 / JPY at 112.16 stronger by 14 / DXY at 93.47 down 65.

Gold 1206 up 2.35 / WTI Crude Oil at 71.27 up 15

In economic data in the US we have seen continued strength in the jobs market with the weekly jobless claims lower by 3k to 201k which I think is a record low.

Daily Chart - US Dollar Index futures - DXc1 - Large fall seen today as downtrend continues on unwinding of large USD long position as risk sentiment improves.

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Topics: Trading, Market News, US Market Outlook