Equity markets finished a strong week on firm footing Friday after President Trump’s speech on drug prices. There was some de-risking ahead of the speech as the S&P 500 retested the overnight low and traded about 0.5% from the session high on fears the speech would attack the biotech and healthcare industries.
Crude oil prices are pulling back from three-and-a-half-year highs after a leap in the U.S. oil rig count and a relatively calm weekend when it came to geopolitical tensions. Drillers added 10 oil rigs and 3 gas rigs bringing the total oil rig count to 844, the highest level since March 2015, according to Baker Hughes.
The U.S. dollar rally lost momentum during the week and recorded its third day of depreciation versus other major pairs. The U.S. dollar continues to gain versus emerging market currencies as more signs of a global growth slowdown appear. The US consumer price index (CPI) came in under expectations and raised concerns on how many rate hikes could the Fed get away with in 2018.
It is the season for trend and breakout traders, according to my chart range statistics, aggregate statistics, and pivots. I do love sideways markets like I love Nashville biscuits with slow-pouring molasses & butter. Trying to pinpoint range reversals is a thrill. However, these breakout markets, at this moment wrecking my range-prediction precision, are teaching me honesty, flexibility, and caring service to others.
The S&P 500 closed at the highest level since March 20. Yesterday was the sixth positive session in a row and the soft read on inflation spurred broad-based buying. Price action tested out above major three-star resistance but settled hugging the big level in which it failed at less than a month ago.
Global equity markets have attempted to trade cautiously higher at the end of the week, as a combination of soft U.S. inflation figures, stronger commodity prices and slightly easing geopolitical tensions seems to have had a small impact on risk sentiment.
Crude oil prices are hovering just below a three-year high as many are still shocked that oil prices are again trading this high. Oil prices started out strong on Iranian-Israeli war tensions but pulled back after data from Genscape put crude storage at Cushing, Okla., at 39.56 million barrels as of Tuesday, up 479,644 barrels from Friday.
Yesterday, the S&P settled at the highest level since April 18th and the NQ at the highest since March 20th. While each is more than 4% and 6% from their all-time high, the Russell finished at the highest since March 13th and sits just more than 1% from its all-time high.
It’s been a relatively positive start to trading in Europe on Wednesday, with much of the attention falling on President Donald Trump’s decision to withdraw from the Iran nuclear deal. Crude oil is back trading at three-and-a-half year highs this morning after Trump confirmed that the United States will be withdrawing from the Iran nuclear deal and sanctions will be restored.