We have seen an attempt of a new push up on stocks indices in the last few sessions with E-mini S&P500 moving into 2815 level while German DAX rallied yesterday toward 12770. If the DAX will stay in uptrend and U.S. markets also later, the U.S. dollar/Japanese yen currency pair can see more upside as well, but maybe after a deeper pullback as part can be stepping into a fourth wave after that intraday reversal down from 113.00 area.
Asian equities followed Wall Street higher on Thursday, as investors cheered strong quarterly results from corporate America that have taken away the focus from trade jitters, for now at least. Out of the 55 companies that announced results, 87% managed to beat earnings estimates while only 7% missed the mark. With EPS growth exceeding 22% we are obviously heading towards the best earning season in eight years.
Every market participant knew this day was coming; trade tensions return to the forefront. While acquisitions relevant to U.S. and China trade negotiations stemming from Larry Kudlow’s interview escalated overnight, the White House Chief Economic Advisor, the true burden is a weakening Chinese yuan and the EU preparing a list of countermeasures to U.S. tariffs on European autos.
To say this week has been a poor one for the British pound is an understatement. The downbeat currency – already reeling from ongoing Brexit and political uncertainties – has been hit further by disappointing domestic economic data. Investors have been left wondering whether the soft data may have any implications on the Bank of England’s decision to hike interest rates next month. Although a 25 basis point rate rise is still likely, the probability of a no change has risen thanks to the disappointing wages, inflation and now retail sales figures.
European markets are trading in the red early in the session on Thursday, with the FTSE 100 the only major index in the green, supported by weakness in the pound after the release of some more disappointing data for the UK.
If you want 11 million reasons to be optimistic about America, you might want to start with counting barrels of crude oil. The Energy Information Administration (EIA) reported that U.S. crude oil production exceeded 11 million barrels a day for the first time in history. Not too many years ago, that would have seemed to have been impossible by many who lacked the imagination and drive of those in the U.S. energy industry.
Bitcoin and other cryptocurrencies such as Ethereum and Ripple have risen sharply over the past few days, most notably on Monday and Tuesday. It doesn’t feel like it but Bitcoin has risen nearly 30% from its lowest point in June. Sentiment has been boosted by a number of positive developments including news that BlackRock, the world’s biggest asset management company, is looking to invest in the digital currency.
After the sluggish wages data yesterday, the pound was hit again this morning on news UK inflation remained flat in June, raising further doubts over an August rate hike from the Bank of England. But this was good news for the stock markets, with the commodity-heavy FTSE 100 extending its gains after a sizeable rally the day before and despite ongoing weakness in prices of crude oil and metals.
Fed Chairman Jerome Powell’s testimony took its toll on crude oil, and a bearish report from the American Petroleum Institute (API) isn’t helping either. The Fed chairman caused the dollar to soar which pressured many commodities as he told the Senate Banking Committee that "Several years” of strong jobs, low inflation still ahead of us."