|Day's range||2,962.94 - 2,972.84|
|52-week range||2,346.58 - 3,027.98|
Losses in consumer goods makers, utilities and technology stocks helped outweighed gains in banks and real estate companies. The muted trading followed a rally Friday spurred by investor optimism over signs of progress in the latest round of trade talks between the U.S. and China.
Investing.com - Stocks pulled back slightly Monday after concerns emerged that the U.S.-China trade deal announced Friday might not be as solid as first thought.
News, again, drives the US stock market and major indexes higher as optimism of a US/China trade agreement floods the news wires. As we’ve been suggesting, the global markets continue to be news-driven and are seeking any positive news related to easing trade tensions and capital markets. We believe any US/China trade deal would be received as very positive news by the global capital markets – yet we understand the process of achieving the components of the “deal” would likely still be 6 to 24 months away.
Stock markets were choppy to kick off the week on Monday, as we are at relatively high levels, and of course earnings season starts after the Monday session. Ultimately though, what really has made this market a bit confused is that the US/China trade talks seem to have produce nothing.
The S&P 500 and Dow Jones indexes had ended Friday with their first weekly gain in a month after Washington signalled the two sides had taken a major step in easing the tit-for-tat measures that have hammered global growth this year. President Donald Trump, however, acknowledged that the agreement could still collapse, while Treasury Secretary Steven Mnuchin said on Monday he had "every expectation" that if a U.S.-China trade deal was not in place by Dec. 15, additional tariffs would be imposed. Financial markets had a rocky start to the month on signs of escalating trade tensions, slowing global economic growth and rising geopolitical risks.
Based on the early price action, the direction of the index the rest of the session on Monday is likely to be determined by trader reaction to the uptrending Gann angle at 2967.00.
Wall Street stocks dipped early Monday ahead of a heavy calendar of earnings reports as skepticism about last week's US-China trade announcement weighed on sentiment. This week's earnings schedule includes a trove of large banks such as JPMorgan Chase and Wells Fargo, as well as reports from Netflix, IBM and Honeywell International. Analysts expect companies in the S&P 500 to report a 4.1 percent drop in third-quarter results, according to Factset.
Berkshire Hathaway stock has underperformed the S&P; 500 this year. However, Apple is outperforming the markets. Buffett has been optimistic about Apple.
Shiller has always said that economic trends were driven as much by feeling as fact. Now he’s taking the argument further with the notion that certain stories catch hold in the public imagination, and then set in motion specific economic events or even long-lasting trends (one fascinating titbit is that the Great Depression may have been prolonged by the very Puritan behaviour that it encouraged, as a broad economic story developed around the morality and necessity of thrift).
FT subscribers can click here to receive Market Forces every day by email. A retreat from last week’s big rally in equities, rise in sovereign bond yields and recent sterling strength is hardly a surprise.
China and the US have agreed to an outline of a ‘Phase One’ deal, in which China will buy more agricultural products and the US will indefinitely delay the increase in tariff rates.
Traders aren’t changing sentiment, per se. They are just making adjustments to the suspension of the October 15 tariffs so don’t expect too much more downside action in gold, the U.S. Dollar and Japanese Yen. All should find support at or near their September 11 levels, the day Trump announced the October 15 tariffs.
The U.S. dollar gained on Monday as optimism ebbed over a potential U.S.-China trade deal that President Donald Trump outlined last week, while a gauge of global equity markets was little changed as investors sought details about an agreement. Gold gained and oil prices fell more than 3% at one point as scant information about the first phase of a Sino-U.S. trade deal undercut optimism over a thaw in the dispute that has sparked a slowdown in global growth. A slide in Chinese exports picked up pace in September while imports contracted for a fifth straight month, evidence of further weakness in China's economy as tariffs take their toll.
Despite quite a few calls for caution, at the end of the trading session, the data revealed that Big Tech, Banks and chipmaker investors liked the news. Since stock investors tend to discount future events, they were probably happy because the tariffs that were set to begin on October 15 had been suspended.
The coming week’s docket of economic reports and earnings releases comes just following the Trump administration’s announcement of a partial trade deal with China late last week.
On October 10, in an interview with CNBC, Mike Wilson said investors should focus on the fundamental story. He's worried about expensive growth stocks.
This will be a key week for Brexit because Boris Johnson will need to ask Brussels for an extension on the UK’s withdrawal from the EU under the terms of the Benn Act if parliament has not approved either a deal or no-deal exit by Saturday. The European Council meets in Brussels on Thursday and Friday, where any deal reached will need to be signed off. Mr Johnson’s team is believed to be drawing up plans to fudge the most controversial issue dogging negotiations with Brussels: whether Northern Ireland should be part of the EU customs union to avoid the need for a hard border with the Irish Republic.