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The bulls come back:
Traders have been given the green light to embark on risky badets on Friday. This resulted in a substantial jump in global equities and a certain "risk" attitude towards trading. The impulse was probably more technical than fundamental. The renewed confidence is mainly due to the leak of information that Treasury Secretary Stephen Mnuchin was considering raising US tariffs on China. Whatever the motive, harmful or simply wrong, this story was quickly denied by the White House. However, this sufficiently indicated to the market that the negotiations on the trade war were progressing. The extra food that fueled this recovery helped to overcome the very high technical levels of the Wall Street indexes, to attract buyers and to reinforce the view that the December sale is behind us.
The biggest fan of the stock market:
There is a market player who is apparently ready to accept this idea: US President Donald Trump. The US president obviously uses the performance of the stock market to measure its success – rightly or wrongly. And over the weekend, among the many tweets tweeted by Trump, this one exposed his point of view on the US economy and the stock market: "The economy is one of the best in our history, with unemployment at its lowest level in 50 years and a stock market ready to beat a new record (set several times by us) …" A real commitment to take – and a market, participants will not take it too seriously. Whatever the case may be, the fact that the US President wants this market to rise is a perverse comforting story for the markets.
Strong technical indicators:
For the moment at least, the direction for US and therefore global equities is up. The recovery has barely recovered to begin the new year. It also seems that the market (as a whole) is beginning to believe that the start of the 2019 recovery is real. The Wall Street S & P500 benchmark technical indicators were as strong as they were year-round on Friday. The resistance at 26:30 was broken, clearly attracting many skeptical or nervous speculators, pushing the index up 1.32% during the day. The volume was well above average for the first time in several weeks as well, at 9% above the 100-day average. The width was also very impressive, with 91.3% of stocks rising and all sectors in the green for the session.
The ASX200 should follow:
Friday's strong US equity session allowed the ASX200 to jump 43 points at the opening, according to the latest price traded on the SPI Futures. The ASX had a strong performance Friday, although it lacks the substance of its American counterparts. As on Wall Street, each sector gained ground that day. But the scale and volume were not a shadow of US markets – in line with the trend of recent weeks. Computer stocks were the only sector to generate significant interest, largely due to the Afterpay Touch Group's 11% recovery after updating its underlying sales figures. The ASX200 will monitor its 200-day EMA in the day at 5909, a level that the index is expected to overtake on opening according to SPI Futures.
China in the honor:
Despite the excitement aroused by the market downturn, the week ahead raises several challenges for this story. Macroeconomic factors in the market climate remain the twin concerns of the US Federal Reserve's global growth and monetary policy. The slowdown of the Chinese economy and the fact that the trade war only exacerbates the problem is the main risk for global growth. We will have an in-depth knowledge of the situation of the Chinese economy today: a major data dump of the middle empire is happening today, with GDP figures topping the list. Much of the recent surge in markets comes from hopes and speculation that China's (and therefore globalization) economic prospects are better than expected. The data of China today will put this hope to the test.
Australian dollar:
As it always does on these occasions, the Australian dollar will probably be the barometer of opinion regarding China's current data. The comments on the foreign exchange markets, and the US dollar by extension, on the financial markets have been relatively clear. There was the flash crash that made the headlines, but apart from that, as a temporary anomaly of market malfunction, the volatility in the currency markets was relatively moderate. The current volatility of the AUD / USD is currently 5.45 – a very low value, especially for currencies that are exposed to the risk / growth dynamic – the pair trading in a range of 100 points for about 2 weeks . Although by no means guaranteed, today's Chinese growth figures will ignite some of the speculators' actions.
Other risky events:
US markets will be closed Monday for Martin Luther King's holidays. Many of the moving markets related to secondary and tertiary risk factors will remain relevant over the next 24 hours. Brexit will hit the headlines as British Prime Minister Theresa May prepares to present alternatives to the House of Commons after the failure of last week's "significant vote". The US government's closure will drag on, after Democratic leaders have refused to cooperate with President Donald Trump's latest salvo to end the blocking of funding for his wall. And the international economic elite will meet in Davos this week for the World Economic Forum, where topics such as global trade and the standardization of global monetary policy will be topical issues.
The bulls come back:
Traders have been given the green light to embark on risky badets on Friday. This resulted in a substantial jump in global equities and a certain "risk" attitude towards trading. The impulse was probably more technical than fundamental. The renewed confidence is mainly due to the leak of information that Treasury Secretary Stephen Mnuchin was considering raising US tariffs on China. Whatever the motive, harmful or simply wrong, this story was quickly denied by the White House. However, this sufficiently indicated to the market that the negotiations on the trade war were progressing. The extra food that fueled this recovery helped to overcome the very high technical levels of the Wall Street indexes, to attract buyers and to reinforce the view that the December sale is behind us.
The biggest fan of the stock market:
There is a market player who is apparently ready to accept this idea: US President Donald Trump. The US president obviously uses the performance of the stock market to measure its success – rightly or wrongly. And over the weekend, among the many tweets tweeted by Trump, this one exposed his point of view on the US economy and the stock market: "The economy is one of the best in our history, with unemployment at its lowest level in 50 years and a stock market ready to beat a new record (set several times by us) …" A real commitment to take – and a market, participants will not take it too seriously. Whatever the case may be, the fact that the US President wants this market to rise is a perverse comforting story for the markets.
Strong technical indicators:
For the moment at least, the direction for US and therefore global equities is up. The recovery has barely recovered to begin the new year. It also seems that the market (as a whole) is beginning to believe that the start of the 2019 recovery is real. The Wall Street S & P500 benchmark technical indicators were as strong as they were year-round on Friday. The resistance at 26:30 was broken, clearly attracting many skeptical or nervous speculators, pushing the index up 1.32% during the day. The volume was well above average for the first time in several weeks as well, at 9% above the 100-day average. The width was also very impressive, with 91.3% of stocks rising and all sectors in the green for the session.
The ASX200 should follow:
Friday's strong US equity session at ASX200
ready to jump 43 points at the opening, according to the last traded price on SPI Futures. The ASX had a strong performance Friday, although it lacks the substance of its American counterparts. As on Wall Street, each sector gained ground that day. But the scale and volume were not a shadow of US markets – in line with the trend of recent weeks. Computer stocks were the only sector to generate significant interest, largely due to the Afterpay Touch Group's 11% recovery after updating its underlying sales figures. The ASX200 will monitor its 200-day EMA in the day at 5909, a level that the index is expected to overtake on opening according to SPI Futures.
China in the honor:
Despite the excitement aroused by the market downturn, the week ahead raises several challenges for this story. Macroeconomic factors in the market climate remain the twin concerns of the US Federal Reserve's global growth and monetary policy. The slowdown of the Chinese economy and the fact that the trade war only exacerbates the problem is the main risk for global growth. We will have an in-depth knowledge of the situation of the Chinese economy today: a major data dump of the middle empire is happening today, with GDP figures topping the list. Much of the recent surge in markets comes from hopes and speculation that China's (and therefore globalization) economic prospects are better than expected. The data of China today will put this hope to the test.
Australian dollar:
As it always does on these occasions, the Australian dollar will probably be the barometer of opinion regarding China's current data. The comments on the foreign exchange markets, and the US dollar by extension, on the financial markets have been relatively clear. There was the flash crash that made the headlines, but apart from that, as a temporary anomaly of market malfunction, the volatility in the currency markets was relatively moderate. The current volatility of the AUD / USD is currently 5.45 – a very low value, especially for currencies that are exposed to the risk / growth dynamic – the pair trading in a range of 100 points for about 2 weeks . Although by no means guaranteed, today's Chinese growth figures will ignite some of the speculators' actions.
Other risky events:
US markets will be closed Monday for Martin Luther King's holidays. Many of the moving markets related to secondary and tertiary risk factors will remain relevant over the next 24 hours. Brexit will hit the headlines as British Prime Minister Theresa May prepares to present alternatives to the House of Commons after the failure of last week's "significant vote". The US government's closure will drag on, after Democratic leaders have refused to cooperate with President Donald Trump's latest salvo to end the blocking of funding for his wall. And the international economic elite will meet in Davos this week for the World Economic Forum, where topics such as global trade and the standardization of global monetary policy will be topical issues.
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