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how the stock market has preform.
At the bottom of this post are the all-time numbers since the current
alert was
made. The current bullish alert is moving in the right direction.
Market Direction: BEARISH alert issued 8/14/2019
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U.S. stocks finished solidly higher Wednesday, with the S&P
500 and the Nasdaq indexes more than wiping out losses from a day ago, as a survey on business conditions in the Federal Reserve’s key districts showed
that economic activity in nonfinancial service sectors was steady or improving
even while manufacturing and agriculture were unsurprising weak spots.
Major benchmarks
climbed early in the session amid easing tensions in Hong Kong, the potential
for new stimulus measures out of China and growing hopes that the U.K. could
avoid a disorderly exit from the European Union.
How are the major benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.91% gained
237.45 points to close at 26,355.47, posting an increase of 0.9%, as the
S&P 500 SPX, +1.08% added
31.51 points to end at 2,937.78, booking a 1.1% gain, and the Nasdaq Composite
IndexCOMP, +1.30% advanced
102.72 points, or 1.3%, ending at 7,976.88.
On Tuesday,
the Dow fell 285.26 points, or 1.1%, to 26,118.02, while the S&P 500
dropped 20.19 points, or 0.7% to 2,906.27. The Nasdaq Composite declined 1.1%
to 7,874.15, a drop of 88.72 points.
What’s driving the market?
The Fed’s Beige Book,
an anecdotal account of financial conditions the central bank’s districts,
isn’t necessarily a market moving report but have been closely followed of late
for signs of stress in the system amid the yearlong Sino-American trade conflict.
The survey on
Wednesday showed that overall the economy expanded at the same “modest pace”
seen in earlier reports this year, despite intensifying tariff conflicts,
highlighted this weekend by the U.S. and China following through on
implementing increases to respective import duties. Still, a majority of
business owners “remain optimistic about the near-term outlook,” the Fed found.
Manufacturing and agriculture, however, were the two weak spots
in the late summer and shouldn’t be a surprise to investors after a report on
Tuesday, the Institute for Supply Management’s purchasing manager’s
index, showed a reading
of 49.1 last month, down from 51.2 in July, its lowest since
January 2016. Any reading below 50 indicates contraction.
Wall Street stocks had been bouncing back after upbeat news from
Hong Kong set the tone for global markets after Chief Executive
Carrie Lam said she would scrap an extradition bill that
sparked months of protests in the region and raised worries that those
conflicts could eventually hurt the business environment and global financial
markets.
Although the withdrawal of the extradition bill only meets one
of five demands from protesters, mostly young students, it has given investors
some cause to cheer. Hong Kong stocks jumped 3.9% on the reports, as gauged by
the Hang Seng Index HSI, +3.90% ,
marking its biggest one-day gain since November.
Also boosting optimism toward the greater Chinese economy were
state-media reports, cited by Reuters, that the People’s Bank of China will
soon implement cuts in the reserve requirement ratio for Chinese banks, in a
move that analysts predict will boost growth and signals willingness by the
government to take steps necessary to combat the effects of higher U.S. tariffs
on Chinese imports.
“China seems willing
to move forward with monetary stimulus, and possibly more fiscal stimulus as
well to put its best foot forward into October,” when the People’s Republic of
China will celebrate its 70th anniversary, Yousef Abbasi, global market
strategist for U.S. institutional equities at INTL FCStone, told MarketWatch.
“If you want to
celebrate by showcasing prosperity, sovereignty and peace, you don’t want to be
doing so against the backdrop of protests and a slowing economy,” he said.
Meanwhile, the U.K.
Parliament late Tuesday took steps toward preventing a no-deal exit from the
European Union. Newly installed Prime Minister Boris Johnson suffered a major
defeat as lawmakers voted to seize control of the Brexit agenda, prompting him
to threaten to call for snap elections.
Still, the 328 to 301
vote on Tuesday, clears the way for Johnson’s opposition to introduce a bill
later Wednesday to prevent Britain from leaving the EU without a deal Oct. 31.
Pierre Veyret,
technical analyst at ActivTrades wrote in a daily research note that the
optimism over political developments has renewed investors’ buying appetite
after a selloff a day ago, which marked an ugly start to trading in September.
“This renewed confidence
has quickly spread to the rest of the world, especially Europe, where investor
sentiment had already been boosted by political events in the U.K…,” he said. Also on investors’ radar were a series speeches from Federal
Reserve officials Wednesday, including comments by New
York Fed President John Williams at a Euromoney conference
in New York that signaled while the U.S. economy remains in a “favorable
place,” the outlook was worse than previously thought, leaving the door open
for the Fed to cut rates for the second straight meeting, set for Sept. 17 and
18.
Dallas Fed President Robert Kaplan, a nonvoting member of the
Fed’s interest-rate setting committee, told an audience in Toronto that he is
keeping an eye on consumer surveys to determine whether a slowing economy is
affecting this key engine of the U.S. economy, according to Bloomberg.
Separately, Chicago Fed President Charles Evans said Wednesday
that the central bank estimates “that the U.S. economy’s trend growth potential
currently stands at around [1.75%],” and he said it could go to 1.5% or below,
if the economy sees less competition and less innovation, as well as more
immigration restrictions, The Wall Street Journal reported.
In other data, the U.S. trade deficit fell nearly 3% in
July on rising exports, though the balance remains higher than last year,
despite efforts by the Trump administration to reduce it.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.57% receded
by 1.3 basis points to 1.456%.
In commodities markets, the price of crude oil CLV19, -0.50% finished up 4% to
about $56.26 a barrel, while the price of gold GCZ19, -0.01% added
0.3% to end at $1,560.40
an ounce, turning positive from earlier declines and adding to a
1.5% surge on Tuesday to reach a
more-than-six-year high. The ICE U.S. Dollar IndexDXY, -0.61% a
measure of the U.S. currency against a basket of six major rivals, retreated
0.5% to 98.51.
In Asia, equities were mostly higher, as the China CSI 300 000300, +0.84% rose
0.8% and Japan’s Nikkei 225 NIK, +0.12% edged
up 0.1%. European stocks, meanwhile, closed higher with the Stoxx Europe
600 SXXP, +0.89% rising
0.9% and the U.K. FTSE 100 UKX, +0.59% ending
0.6% higher.
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may issue advising a change in the current market direction. Stay tuned
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The all-time lows since our initial
recommendation to go SHORT
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (8/14/2019)
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Dow
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down 139.80 points a 0.55% gain
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8/15/19
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Nasdaq
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down 47.39 points a 0.61% gain
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8/15/19
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S&P 500
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down 15.09 points a 0.53% gain
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8/15/19
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Related Link: http://www.stockmarket-direction.com/
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