Archives of “May 2019” month

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US Indices take it on the chin, but late day buying softens the blow

  
Analysis, US Market

Broad decline on Iran tension and US/China fear

There were a couple of catalysts for stocks.  There is some anxiety coming from Iran, and the fear from US/China trade hiccups was a concern.
Having said that the Dow was down 648 points at the low. It is ending down 472 points. The Nasdaq and S&P had similar rebounds into the close.
The final numbers are showing:
  • The S&P index fell -48.42 points or -1.65% at 2884.05. The low reached 2862.60
  • The Nasdaq index fell -159.53 points for -1.96% at 7963.75. The low reached 7899.02
  • The Dow fell -473 points or -1.79% at 25965.09. The low reached 25789.71.
Below is the % change range for the North American and European major stock indices today.  Things certainly could have been a lot worse (thanks to the rally into the close).
Broad decline on Iran tension and US/China fear

The USDJPY dips to new session lows on risk off flows

  
Analysis, Forex

Moves away from 100 day MA

The USDJPY waffled around the 100 day MA for most of the trading day. That was lower from the close yesterday (at 110.76). With stocks trading at/near lows, the USDJPY has seen more risk off lows into the JPY. The GBPJPY and EURJPY are also making new lows in the last few minutes of trading.

Moves away from 100 day MA
Drilling to the 5-minute chart, the pair in the NY session did stall at the 200 bar MA (green line in the chart below) currently at 110.65. That kept shorts more in control intraday. The fall lower has now moved below a lower trend line at 110.49. That is a close risk bias level.

If the price today were to get back above the 38.2-50%  area at 110.567 – 619 area (and the falling 100 and 200 bar MAs (throw in the 100 day MA), the sellers now would likely be spooked. The price should not trade back above those levels if the selling/bearish tilt is to continue.

USDJPY on the5 mintue chart is below trend line now and key MAs

Iran and EU are close to deal to allow Iran to sell oil – report

  
Analysis, Crude

RIA report

That would be bearish for oil and provocative to the US.
Europe has been against the US withdrawal from the Iran nuclear deal but has been hamstrung by efforts to target any European companies that bought Iran’s oil. The details will be important but it will be interesting to see how many barrels Iran can get to market.
WTI is down 65-cents to $61.57 while Brent is down 81-cents to $70.44.

Dollar catches a light bid across the board

  
Analysis, Forex

EUR/USD has been marked down to a low of 1.1193 from around 1.1210

EUR/USD H1 07-05
The bid in the greenback comes alongside a move higher in the yen as well with USD/JPY inching lower to 110.65 currently. EUR/USD is nearing session lows now as price tests the 100-hour MA (red line) as buyers will now have to show their resolve in defending the near-term bullish bias once again.
Meanwhile, cable is also brought to a session low of 1.3086 after having traded around 1.3110-20 levels earlier at the start of the session. There aren’t any notable headlines for the pick up here as it is taking place just as most European/London traders are getting busy in the morning.
That said, there are some notable changes to risk assets over the past hour with oil prices now down on the day with Brent lower by 0.7% to a low of $70.70. US 10-year yields have also dropped slightly from near 2.50% earlier to 2.48% currently. US equity futures are also slowly surrendering its earlier pullback as it is down by 0.3% now after having pared losses to just under 0.1% earlier.

US trade representative Lighthizer says US tariffs on China will rise on Friday

  
Analysis, Economy

Confirming the Trump tweet from Sunday. Comments crossing from US trade representative Lighthizer and US Treasury Secretary Mnuchin:

  • Lighthizer says over the course of the last week we have seen an erosion in commitments from China
  • Mnuchin says China moved away from language in the agreement that would have changed it substantially
  • Lighthizer says China was reneging in commitments
  • Lighthizer says over the last week or so the Chinese pulled back, and that was what precipitated trump’s tweet
  • Lighthizer says we are continuing talks, China delegation will be here Thursday and Friday
  • Lighthizer says he expects that the Chinese vice premier will attend the talks on Thursday and Friday
  • Mnuchin says it would be unfortunate if we cannot conclude an agreement
  • Mnuchin says the entire economic team is unified in recommending to trump that the US go ahead with tariffs if there is not an agreement by Friday
  • Lighthizer says we had good commitments on eliminating market distorting subsidies
  • Mnuchin says we had hoped to conclude a deal by the end of this week one way or another
  • Mnuchin says we are not going to negotiate to go backwards, says we have negotiated in good faith
  • Lighthizer says trump would like a deal with substantial structural changes, that is not where we are right now
  • Lighthizer says ustr will probably put out a notice on Tuesday about the increase in tariffs to 25 pct on $200 bln of Chinese goods
  • Mnuchin says if we hear something different from the Chinese this week, we will report that to trump
  • Mnuchin says the reaction by the stock market is not playing into consideration about the tariffs
  • Mnuchin says if the Chinese changed position, the US would be willing to keep talking
  • Lighthizer says he does not want to speculate on timing of a potential deal
  • Lighthizer and Mnuchin say they have not talked to the vice premier in the last 24 hours
  • Lighthizer says you have to have specificity in the agreement to make it enforceable
  • Lighthizer says there will be an exclusion process for the tariffs to deal with companies’ difficulties
  • Mnuchin says there were communications over the weekend that moved the agreement substantially backward
  • Mnuchin says we were in the process of planning a summit with Trump and Xi
Headlines via Reuters.
Risk lower on these. There had been recovery during the US day after big falls in Asia on Monday. The two officials confirming Trump’s tweet though. Risk be on the back foot heading into Asia time.

US stocks stage big comeback. Still close down but way off the lows

  
Analysis, US Market

Dow was down -471 points at the lows.  Closes down -68 points

The US stocks staged a big comeback after opening at the lows and slowly recovering throughout the day.
The final numbers are showing:
  • The S&P index, -13 points or -0.44% at 2932.61. The low was on the open at 2898.21
  • The Nasdaq fell -40.70 points or -0.5% at 8123.28. The low reached 7981.85
  • The Dow fell -68.10 points or -0.26% at 26436.85. The low reached 26033.95.
Losers today:
  • Dupont, -3.64%
  • Alibaba, -3.54%
  • AMD -2.83%
  • Micron, -2.77%
  • Nike, -2.52%
  • Nvidia, -1.73%
  • Caterpillar, -1.65%
  • Netflix, -1.65%
  • Apple, -1.54%
  • Twitter, -1.37%
Winners today:
  • Anadarko Petroleum, +7.17%
  • UnitedHealth, +3.69%
  • Chevron, +0.96%
  • Gilead, +0.83%
  • McDonalds, _0.73%
  • Pfizer, +0.60%
  • General Mills, +0.53%
  • Walt Disney, +0.52%
  • Walmart, +0.36%
  • Alphabet, +0.33%
  • Mastercard, +0.33%

Trump continues to lambaste China on trade, says “won’t be losing anymore”

  
  Analysis

Trump tweets continue in the new day

Trump

This just reaffirms his stance from the weekend and if his plan is to pressure China into caving in on a trade deal, it looks like he’s sticking with it. Not much reaction across markets on the tweet this time around but what this means is that he won’t backtrack on his stance on tariffs, so if this is the hard line being drawn, look out for potential China retaliation.

Guess what? US major indices open lower.

  
Analysis, US Market

No surprise there

No surprise, US major indices are opening sharply lower. That is the bad news. The good news is the major indices are recovering in the early trade.
The snapshot is showing:
  • S&P is down -38.74 point or -1.33% at 2906.37. The low reached 2898.21
  • Nasdaq is down -139 points at 8025.62. The low reached 7981.85
  • Dow is down -375 points at 26132. The low reache 26033
For the Nasdaq, the price gapped below the 100 hour MA at 8067.407.  That MA will be eyed on a test. Stay below keeps the sellers more in control.  Move above, and the waters are more muddy (with the 50 hour MA eyed).
Nasdaq
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