|Day's Range||7,523.87 - 7,582.43|
|52 Week Range||5,839.89 - 7,691.10|
On Thursday, the Dow Jones Industrial Average may have surged to an all-time high, but a third of its components still remain in a correction. Weekly U.S. jobless claims fell to their lowest level in nearly 49 years last week, totaling 201,000, according to the Labor Department. Economists were looking for claims to come in at 210,000. The 10-year yield hit its highest level since May earlier today after the release of strong U.S. economic data. Crude oil prices fell on Thursday after U.S. President Trump called on OPEC to “get prices down now!” ahead of this weekend’s meeting of major oil exporters.
Recently, Alibaba’s (BABA) Jack Ma said that the US-China trade war could last for decades. In this part, we’ll see where China stands in the US-China trade war. First, we’ll discuss how China could retaliate against the US (QQQ).
President Trump has taken a hard stance on several issues including trade, Iran, and North Korea. President Trump has lashed out against existing trade deals that he says aren’t favorable to the US. He’s more comfortable with bilateral trade deals compared to multilateral trade deals.
In the Asian markets, it seems that the recovery rally has exhausted. After two days of growth, Asian markets mixed, returning to the levels of the end of last week. Global stocks mostly higher.
Bank shares are being driven higher by a jump in the U.S. Treasury note yield to 3.09 percent, its highest level since May. Higher rates tend to increase a bank’s profitability. Among the winners in the banking sector, J.P. Morgan Chase. It’s the best performing stock in the Dow.
Based on the early price action, the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session will be determined by trader reaction to the steep uptrending Gann angle at 26442.
Based on the early price action, the direction of the December E-mini S&P 500 Index is likely to be determined by trader reaction to a downtrending Gann angle at 7531.50.
The major U.S. equity indexes are trading higher shortly after the cash market opening on Tuesday as the latest tariffs on U.S. and Chinese goods failed to lead to lead to knee-jerk selling as anticipated during the pre-market trade. U.S. Treasury yields were trading mixed when the news came out this morning. However, shortly after the stock market opening, yields are trading higher. The U.S. Dollar is trading lower against most major currencies except the Japanese Yen despite rising Treasury yields which tend to drive up demand for the greenback
Based on the early price action, the direction of the September E-mini NASDAQ-100 Index is likely to be determined by trader reaction to the 50% level at 7431.75.
The US-China trade spat intensified after President Trump imposed additional 10% tariffs on $200 billion worth of goods from China. Some market participants believe that since China exports much more to the United States, the country is more likely to be negatively impacted in the trade war as compared to the US.
Yesterday, President Trump imposed a 10% tariff on $200 billion worth of goods from China. For now, tariffs don’t yet cover Apple (AAPL) smartwatches and some other consumer products. While the tariffs are a somewhat toned-down version of what Trump previously threatened, they have nevertheless hurt sentiments. Trump also warned China that “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports” if the country retaliated against the tariffs. China has previously retaliated against US tariffs with tit-for-tat measures.
September marks a decade since Lehman Brothers collapsed. After ten years, some economists are contemplating whether we’re heading towards another recession. Some analysts see a flattening yield curve as a recession indicator. Leaving aside the yield curve, macro data look encouraging. Asset prices aren’t really inflated like in 2007. However, the trade war and sanctions could depress sentiments.
Based on Monday’s price action, the direction of the September E-mini NASDAQ-100 Index the rest of the week is likely to be determined by trader reaction to the uptrending Gann angle at 7327.75. The first downside target is 7369.25. This price is a potential trigger point for an acceleration to the downside with the first target the minor bottom at 7316.50.
According to The Wall Street Journal, one senior Chinese advisory official said China would not negotiate “with a gun pointed to its head”. That sounds like a sensationalistic statement. However, it actually signals a major escalation in the trade crisis because in April, a similar official said China would not conduct talks “under these conditions”.
Lehman Brothers collapsed a decade ago. Since then, global markets have recouped their losses and equity markets have risen above their 2007–2008 highs. Broader markets have been hitting fresh highs this year. The PowerShares QQQ ETF (QQQ) has risen 18.6% for the year based on the closing prices on September 14. Two US companies hit the coveted market capitalization of $1 trillion this year. While Apple (AAPL) is still holding onto that feat, Amazon (AMZN) pared its gains after momentarily exceeding a market capitalization of $1 trillion.
The indexes rose steadily throughout the week even after China said it was looking to seek permission from the World Trade Organization to inflict sanctions upon the U.S., and President Trump stated he was “ready to go” on hitting China with an additional amount of tariffs. The Commerce Department said Friday retail sales edged up 0.1 percent last month, the smallest rise since February. But July’s figures were revised higher to show sales rising 0.7 percent instead of the previously reported 0.5 percent gain. The yield on the benchmark 10-year Treasury note to better than 3 percent on Friday for the first time since August 2.
Based on the early price action, the direction of the September E-mini NASDAQ-100 Index futures contract is likely to be determined by trader reaction to the short-term Fibonacci level at 7581.00.
U.S. Treasury yields fell on Thursday after the release of the CPI report. The news won’t take the September rate hike off the table, but when combined with yesterday’s weaker-than-expected producer inflation, it could slow down the pace of future rate hikes.
Trade war fears and emerging market sell-offs have led to a risk-off sentiment in the last month. As for metals, concerns about China’s economic growth that were exacerbated by the trade spat with the United States have been pushing investors away. The trade war was an offshore battle as the United States engaged with foreign governments ranging from NAFTA members to the European Union.
Global stocks trade mostly higher on Wednesday morning on strong US data. Oil prices rise as Hurricane Florence approaches US.
Apple speculators jumped on-board ahead of a big marketing event at company headquarters on Wednesday, where it’s expected to announce several new products. The National Federation of Independent Business (NFIB) reported that small business optimism jumped to a record high last month, boosted by lower taxes and looser regulations. U.S. job openings surged to a record high in July and more Americans voluntarily quit their jobs, pointing to sustained labor market strength and confidence that could soon spur faster wage growth.
Global trade worries remain an issue. Canada and the U.S. have yet to secure a final deal that would replace the North American Free Trade Agreement (NAFTA). Trump told reports last week the U.S. and Japan had begun talks over trade. Trump also said he was “ready to go” on hitting China with an additional $267 billion worth of tariffs.
Based on last week’s close at .7438.50 and the price action, the direction of the September E-mini NASDAQ-100 Index this week is likely to be determined by trader reaction to the 50% level at 7432.00.
Technology stocks have led the major indexes higher this year, and they could fuel any substantial near-term correction. Some analysts are saying that last week’s sharp sell-off in the chipmaker sector was the “canary in the coalmine”. However, further weakness in social media stocks and the “Trillion-Dollar Twins” – Apple and Amazon, could be the major catalysts driving the price action this week.
Based on Thursday’s close at 7457.50 and the early price action, the direction of the September E-mini NASDAQ-100 Index on Friday is likely to be determined by trader reaction to the Fibonacci level at 7462.00.