Market Direction: BULLISH alert
issued 2/15/2018
Asian markets closed mostly lower in reaction to
the tariff news, with the Shanghai Composite SHCOMP, -1.76% sliding by 1.8%. European
stocks SXXP, -1.26% finished in the red across the
board.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.
Tariffs, Tariffs, and more Tariffs...
U.S. stocks snapped a four-session
winning streak Wednesday after the Trump administration announced new tariffs
on Chinese goods, further escalating tensions between the two largest economies
in the world, which some investors fear could morph into a full-on trade war.
How
did the market fare?
The Dow Jones Industrial Average DJIA, -0.88% slumped 219.21 points, or 0.9%, to 24,700.45.
The S&P 500 SPX, -0.71% fell 19.82 points, or 0.7%, to
2,774.02. Only 1 of the 11 primary S&P 500 sectors closed in the green,
with materials and the industrial sectors, both of which are seen as sensitive
to trade issues, among the biggest losers. The energy sector also weighed on
the market, tumbling more than 2% alongside a steep drop in the price of
crude-oil futures. The utilities sector, up 0.9%, was the sole gainer.
The Nasdaq Composite Index COMP, -0.55% shed 42.59 points, or 0.6% to
7,716.61.
What
is driving the market?
The White House late Tuesday said it
would assess 10% tariffs on a further $200 billion in Chinese
goods. The move is seen as deepening the rift with Beijing and
sending a message to other trading partners that the U.S. is willing to
escalate a trade fight. The U.S. last week hit Beijing with levies on $34
billion in goods, and Beijing retaliated with tariffs of the same amount. A
final decision on the products to be hit with the new tariffs is expected after
a consultation period in late August.
China’s Ministry of Commerce said in a statement that the
new levies are “totally unacceptable” and that the behavior is hurting not just
China but the whole world.
Recent gains in the market have come
as Wall Street has attempted to pivot its focus to coming second-quarter
earnings, which are expected to be strong. Such signs of economic strength,
along with improving economic data, could provide a floor under equity prices,
just as the trade issue serves as a ceiling.
What
were analysts saying?
“This is different from the other
trade announcements, because the size is significantly larger, and because
China is unable to directly reciprocate at $200 billion because they don’t
import that much. It’s unclear what it might do next, but it is clearly another
step closer to a full-blown trade war,” said David Carter, who oversees about
$2 billion as chief investment officer at Lenox Wealth Advisors.
“If the trade skirmish escalates
into a full-blown trade war, that will be a bigger force in the markets than
the strong fundamentals.”
“Even though the tariffs actually
imposed up to now are relatively small in comparison to overall trade flows and
GDP, it is hard to see how a full-blown trade war can be avoided at this stage.
There is no-one left in the administration or in Congress to rein in President
Donald Trump’s long-held protectionist beliefs and other countries are not
shying away from the fight,” said Paul Ashworth, Chief U.S. economist at Capital
Economics.
What’s
on the economic calendar?
The June producer-price index rose 0.3%, as did the
core PPI, which excludes volatile food and energy. The 12-month rate of
wholesale inflation, meanwhile, climbed to 3.4% from 3.1%, marking the highest
perch since the waning months of 2011.
Separately, wholesale inventories
rose 0.6% in May.
Among Federal Reserve speakers, New
York Fed President John Williams was slated to deliver a speech on the economy
to Brooklyn Town Hall at the Brooklyn Law School at 4:30 p.m. Eastern.
What
were other markets doing?
The ICE U.S. Dollar Index DXY, +0.01% was higher while the yen USDJPY, +0.12% was weaker against the greenback.
The buck bought ¥112.02, up from ¥111.00 late Tuesday in New York.
Gold futures GCQ8, -0.10% settled lower and oil suffered
one of its sharpest daily declines in more than a year, on a
percentage basis.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.
The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (2/15/2018)
|
||
Dow
|
up 599.98 points a 2.38% gain
|
2/27/18
|
Nasdaq
|
up 550.17 points a 7.58% gain
|
6/20/18
|
S&P 500
|
up 70.70 points a 2.59% gain
|
3/13/18
|
Related Link: http://www.stockmarket-direction.com/
No comments:
Post a Comment