S&P 500 and Nasdaq soar to new high
Fundamental outlook TECHNOLOGY stocks ascended to new heights, pushing the S&P 500 and Nasdaq to a record level.
President Donald Trump faced the possibility of being impeached after two former advisors were found guilty of criminal acts. US housing data rose but it was still below forecast. British net borrowing by government sectors declined.
US existing home sales rose 5.34 million in July, lower than forecast and the previous month. New home sale grew 627 million in July, the lowest in five months and below forecast.
US order for durable goods slid 1.7 per cent in July, worse than expectations. Excluding transport equipment, core order rose 0.2 per cent, missing forecast. On Friday, S&P 500 and Nasdaq Index closed at a record high as technology stocks such as Netflix spiked upwards.
President Trump said the government is planning to implement 25 per cent tariffs on all car imports from the European Union (EU). He also expressed disagreement to higher interest rates reinforced by central bank policymakers.
Two former advisors of Trump administration, Paul Manafort and Michael Cohen, were found guilty of criminal acts linked to tax frauds and Russian operatives and could implicate President Trump into impeachment. Trump defended himself on national TV, and said he has done a good job so far while threatening that the stock market will crash if he was impeached.
The eurozone manufacturing index rose 54.6 in August and services index grew 54.4 in the same month. German manufacturing index rose 56.1, missing expectations.
UK public sector net borrowing dropped by 2.9 billion pounds in July, an improvement from 3.3 billion pounds gained in June. CBI industrial order expectations grew to seven, down from previous month 11 reading. Technical forecast US dollar/Japanese yen traded in strong demand last week and closed at a near intra-week top. This week, we reckoned the range would trade in a narrow range between 110.50 to 111.50 region but piercing beyond whichever extreme will lead into a new directional headway. Risk control is advised for high probability of an upwards trend.
Euro/US dollar traded in mild demand last week. This week, the trend could be constricted from 1.1550 to 1.1650 region while waiting to make a breakout.
The Dollar Index will be a crucial factor for leading an inverse trend for the euro’s direction. There are no significant indications on where the market is heading and as such, risk control is reminded for traders.
British pound/US dollar traded in sideways as both the euro and dollar edged higher. This week, we forecast the trend will be uncertain and contained initially from 1.28 to 1.295 range. Traders are becoming cautious and are now waiting for potential breakout before picking a position in the market.
Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work. Dar Wong is a registered fund manager in Singapore with 29 years of global trading experiences. You may reach him at dar@pwforex.com.