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US Market Outlook 25 Oct 2018

Posted by Tim Sholl on 26-Oct-2018 00:19:42

Markets continued with the large volatility that saw strong selling across the globe. Stock indices were hit hard with most indices down up to 3% to leave the markets suffering the worst month since 2009. Investors moved out of stocks and bought bonds with the US10 yield down to 3.10% which is the bottom of recent range.

The US dollar continued to strengthen as safe haven buying took place , with the uptrend clear. The GBP has continued to weaken as the Brexit saga continues with a deal still uncertain. The head of the ECB just held a news conference where he kept rates at the same level and confirmed that the stimulus will be ending  in Dec as planned. The EUR has rallied slightly since the meeting. The Bank of Canada raised rates last night in a sign that volatility will not deter any planned moves.

US quarterly earnings continue to mostly impress with even Tesla able to report a profit , Ford reporting strong numbers , but the market seems to be selling on the basis that these results are as good as it gets for this cycle , and next year profit growth is heading back to single digits.

Some bargain hunters will be out for quality stocks , but the markets have broken down quite badly , so I would expect more weakness over next few weeks.

Latest prices :

Dow Jones 24748 up 168 / S&P500 2675 up 20 / Nasdaq 100 6884 up 102.

EUR 1.1417 up 25 / GBP 1.2895 up 16 / JPY 112.26 flat / DXY 95.99 down 19.

WTI Crude Oil 67.17 up 39 / Gold 1233.00 flat.

Daily Chart - Nasdaq 100 Index CFD - continues to look negative .

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Topics: Trading, Market News, US Market Outlook