News The Markets Should Embrace...
The markets are getting some timely positive news for a change:
- British and European appear to be making progress, U.K. lead negotiator suggesting a deal will be reached by end of November.
- Times of London reports that the EU is willing to give U.K. financial services companies access to European markets after Brexit. (report unconfirmed)
- China has stated they are willing to provide more stimulus to combat slowing growth caused by trade war with the U.S.
- President Trump’s economic advisor suggested on CNBC that it is possible they will not implement the promised China tariffs which are proposed to take place in the new year.
But in an effort to keep perspective and not get carried away with the recent bounce in equity markets:
January-September 2018 Dow Jones Industrial average +7.04% , October -5.07%, YTD +1.60%
January-September 2018 S&P 500 +8.99%, October -6.94% YTD +1.43%
January-September 2018 Nasdaq Composite +16.56%, October – 9.20%, YTD +5.83%
Some 40 S&P companies will report on Q3 results today, none bigger than Apple. Watch to see market reaction on a beat or a disappointment for signals on the mood of the market!
Friday we get the U.S. unemployment report which will also give the market some idea of the strength of the economy, in spite of the fact it is a lagging indicator.
For the markets in general, we feel that a holding pattern is the most likely scenario into the midterms next week. With the U.S. equity markets focused on the reporting season and also the possible outcomes related to the elections, we don not expect much movement. We have a long position in the S&P from yesterday looking for a bounce/short covering into the weekend. We saw it trade up, but come back to entry level this morning.
USD: holding at highs, but unable to break above resistance. Patience is important.
Oil: struggling, we think there is a good possibility that the market trades up post-election.
Gold: holding the Range of 1210 to 1238. We will trade a breakout.
Global equities: We expect consolidation into election
|Ticker||Date Opened||Entry Price||Stop||Target Price||Current Price|
|Long Gold (XAUUSD)||11/10||1209||1209||Increase on break above 1231/1238||1234.81|
|Long S&P CFD||31/10||2711||2670||2800||2735|
|Long Deutsche Bank (DBK)||2/11||9.22||8.80||First 11.00|
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– Mark W