Market Report: The End of the Correction?
Good Morning Traders,
All the markets are still trading in parallel movements, but now we can see a little better performance and maybe we are very close to the end of the correction. Yesterday on the U.S., the Dow Jones rose 40.68 points, or 0.22 percent, the S&P 500 index advanced 4.69 points, or 0.22 percent, while the Nasdaq rose 2.58 points, or 0.05 percent. Many companies presented their results, among reporting earnings Morgan Stanley, Abbott Labs and BB&T beat their earnings per share and revenue expectations. And this is the better factor for a better performance. Also the Federal Reserve released its latest iteration of the so-called Beige Book, which summarizes economic conditions in the country. In it, the Fed said economic activity in the U.S. rose at a modest pace in most regions.
Like every week, on Wednesday we received the most important data for the Oil and this week was very positive; from the U.S. Energy Information Administration showed crude stocks fell 5.2 million barrels in the week ended October 14, shattering market expectations for a 2.7-million barrel build. So, the oil prices advanced in the U.S. session following government data stateside that showed a surprising drawdown in inventory. In this moment the commodity are pulling back slightly, with a normally correction, but I think that finally the Oil have a new point of support in 50 usd.
Meanwhile in the last presidential debate Hillary Clinton held her lead over Donald Trump. Wall Street generally sees Hillary Clintons winnings as positive for the stocks as it would represent continuity of the status quo. However, markets would be less comfortable if the Democrats also gained control of Congress, as it would likely result in market unfriendly policies on taxes and regulation. U.S. stock index futures held slight gains throughout the debate and added a few points to trade near session highs after the end of the debate.
Thursday’s focus will be on the Eurozone with the European Central Bank monetary policy announcement on the calendar. Overall, we see no change at this meeting. If the president of ECB substantiates claims that the ECB is looking at tapering its QE programme early, then we could see broad euro strength. However, if he primes the markets for an extension of the Bank’s asset purchase programme then the euro may come under pressure.
BHP Billiton, which announced its production numbers on Wednesday, finished up 0.5 percent. And today is trading with the same positive trend. The next point of resistance can be close at 1.234.
Graphics by: www.etoro.com
The Eur/usd still lies within a bearish momentum despite ongoing retracement. Hourly support given at 1.0952 is on target. Hourly resistance can be found in a first step at 1.0979 and in next one step on the level of 1.1019.
Graphics by: www.etoro.com
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