The Christmas break may already seem like a distant memory, but the party continued on Wall Street ahead of the weekend as optimism over global trade and a more dovish line from the Fed combined to deliver significant upside for stocks. DOW futures clocked more than a 1,000 point gain between 1am Friday and 1am this morning (GMT), although perhaps unsurprisingly we’ve already seen some of the upside being given back.
Although China has already telegraphed that it is happy to resolve the trade spat amicably, it’s difficult not to see Beijing as pushing for the best deal here. The White House is on the back foot, with a potentially damaging government shutdown ongoing and Donald Trump very much seen as the culprit of the recent stock market volatility. The trade deal – assuming it’s reached - should be good for stocks, but this point won’t have escaped Chinese negotiators. There’s not too much on the US economic calendar today, with the composite ISM reading later today not expected to deliver much of interest. Arguably the biggest risk here is that further signs of rampant economic growth will push back against that restrained message Jerome Powell issued on Friday, bolstering the greenback and adding fresh downside pressure to equities.
Ahead of the open we’re calling the DOW down 43 at 23390 and the S&P down 5 at 2527.
The information provided here has been produced by third parties and does not reflect the opinion of AxiTrader. AxiTrader has reproduced the information without alteration or verification and does not represent that this material is accurate, current, or complete and it should not be relied upon as such. The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.
Two-year yields have covered their prior six-month range in the last week alone – and whether or not this move is sustainable matters a lot