News & Analysis

Overnight on Wall Street: Wednesday 30/10/19

Ottobre 30, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Hopes of a trade deal, the expectations of a Fed rate cut and earnings have helped global stocks to trade near record highs. However, the momentum faltered towards the end of the US session as investors went in a holding pattern:

  • Earnings: Google parent company, Alphabet missed estimates. The Company posted its highest-ever quarterly expenses showing that the costs are rising faster than revenue. Despite strong earnings from drug makers, Google earnings reports kept the Nasdaq Composite deep in the red on Tuesday.
  • Trade: The news that the interim trade agreement will not be finalised in time to be signed next month also somewhat dampened sentiment, even though the US administration reassured the markets that it does not mean that the accord is falling apart. 
  • Federal Reserve: Investors are awaiting the policy decision on Wednesday whereby the Fed is widely expected to cut interest rates. Most importantly, market participants will monitor the tone and language to gauge the trajectory of interest rates. It will be crucial to have the Fed’s comments on the recent easing of trade tensions.

Wall Street closed in the red – the Dow Jones Average Industrial and S&P500 fell by 0.15 while the Nasdaq Composite closed 0.6% lower.

Currency Markets

The Antipodeans remained buoyed by overall positive trade news and were the best performers among the G10 currencies against the US dollar.

The British Pound remains in the spotlight driven by the ongoing Brexit developments. UK MPs voted for a bill to hold a general election on Thursday, 12 December to break the political impasses over Brexit. At this stage, the date has not yet been licked as some parties prefer the 9th of December. The pre-Christmas general election will be the third one in four years.

The GBPUSD pair initially rose to the 1.29 level before easing back modestly on the announcement on the general election. Given that no-deal Brexit is off the table, the pair remain elevated.

GBPUSD (Daily Chart)


Source: GO MT4

Commodities

Broad optimism has helped the oil market to limit the downside pressure. Trade-related news, bullish oil reports and higher expectations of larger supply cuts have been the supportive factors. However, investors await more concrete commitments on the production cuts to push oil prices firmly to the upside.

As of writing, WTI and Brent Crude are trading in the vicinity of $55 and $61 respectively.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

Gold came under heavy selling pressure overnight. After falling below the psychological level of $1,500 to consolidate in the region of $1,490, the XAUUSD pair further fell below the $1,480.

XAUUSD (Hourly Chart)


Source: GO MT4

Cryptocurrencies

The cryptocurrency market got a boost from President Xi over the weekend. However, China’s state media warned investors about speculative behavior which has put a lid on gains.

“The future is here for blockchain, but we need to stay rational,” the People’s Daily said in a commentary.

Bitcoin, the bellwether of cryptocurrency struggled to push above the $10,000 mark and is trading in the $9,500 region.

BTCUSD (Hourly Chart)


Source: GO MT4

Key upcoming events

Retailer’s Sales and Retail Trade (Japan)
HIA New Home Sales, and Consumer Price Index (Australia)
KOF Leading Indicator and ZEW Survey – Expectations (Switzerland)
Unemployment Change & Rate and Harmonized Index of Consumer Prices(Germany)
Business Climate (Eurozone)
ADP Employment Change, Gross Domestic Product and Core PCE (US)
BoC Monetary Policy Report, Rate Statement, Interest Rate Decision, and Press Conference (Canada)
Fed’s Monetary Policy Statement, Interest Rate Decision and FOMC Press Conference (US)

Thursday, 31 October 2019
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
000.1960.1240.55301.515
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
15.69901.5530000.263

 

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

Next:
Previous: