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US Market Outlook 24 August 2018

Posted by Tim Sholl on 24-Aug-2018 23:22:32

US stock indices look to open higher today after a moderate selloff on Thursday. The indices remain at or near to record levels so the corrections have been very small so far with the underlying fundamentals looking very strong and corporate profits continuing to impress the market. Consumer and corporate sentiment remains high and the retail sector is performing well on the back of strong consumer spending.

The Dow looks to open at 25719 up 63 , the S&P500 is at 2862 up 5 , and the Nasdaq 100 is at 7436 up 22.

Talks between the US and China are completed with no news released about any progress and it looks like the market is not yet concerned that the tariffs will hurt the global economy. If the threatened large tariffs do eventuate then we could see a more significant correction in market prices.

In the FX market we have seen some USD strength the past 3 days , but overall the trend is now lower for the USD , especially against the EUR and GBP , as future interest rate moves seem to be factored in and market positioning is way too optimistic for the USD.

EUR is last at 1.1600 up 0.51% , the GBP is at 1.2853 up 0.29% , the JPY is at 111.36 and flat. Gold has rallied strongly from support at 1285 to be last at 1194. WTI crude oil futures are trading strongly at 68.72 up 1.31% on concerns with the potential lost production from the Iranian sanctions which may be introduced in November.

Bond yields have been steady with US10 at 2.82% , the UK10 at 1.27% and the DE10 at 0.34%. Market expectation is for a further 0.25% rate rise at the next US Fed meeting in September.

In economic data we have seen German GDP growth come out as expected with 0.5% q/q and 2.0% y/y.

US Durable goods number was weak at -1.7% m/m with exp -0.5% m/m.

Topics: Trading, Market News, US Market Outlook