Trading on Monday, September 11 - The market burst out of the gates, building around 1% within the first hour of trading, allegedly due to the fact North Korea did not cause any problem over the weekend and also - thankfully - Hurricane Irma wasn't as damaging as has been anticipated.
The problem with both these arguments as the grounds for Monday’s rally has been, in my opinion, that the wall street game wasn't pushed by either of those two factors. Subsequently, what so interesting is, that insurance stocks in the earlier week did not appear as if they were discounting the type of tragedy that it gave the impression of Hurricane Irma might grow to be on Friday afternoon. In spite of this, the prices are exactly what the prices are, and we trade what we see not what we think!
Trading markets finished the week with record price levels with the geopolitical concerns as well as US Dollar at nearly the year's low levels. Volumes remain to be a concern, however with numerous traders and investors still on the sidelines, a stock market pullback is most likely on multiple fund managers Xmas list.
It will be a matter of time before the pressure begins to build around the Federal Reserve to a step-up policy since equities hit record highs after record highs - suppose we'll learn more on that the upcoming week.
The hotter-than-expected August CPI (Consumer Price Index) numbers of plus 0.4% versus positive 0.3% consensus, confirmed a year-over-year increase of 1.9%, which in turn triggered an adjustment in interest rate-hike expectations. Based on the Chicago Mercantile Exchange FedWatch Tool, investors, as well as traders, currently put the likelihood of a December 2017 interest rate hike at 57.8%, way up from previous week's 31.0% target.
The trading market rallied to all new record high levels this week - much more than making up for the earlier week's downfall. The majority of this week's increase came up from the very beginning as traders and investors cheerfully dialed back their assessments on Monday (Sep 11) for weaker-than-expected destruction in connection with Hurricane Irma.
The DowJones Industrial drove this week's advancement, rising 2.2%, accompanied by the S&P500 with an increase of 1.6%, while the NASDAQ had a healthy increase of 1.4%. For the calendar year, the S&P500 at this point has a respectful 11.7% gain.
Eurozone equity trading markets ended lower, with the Euro Dollar trading higher versus the greenback, while the British Pound (GBP/USD) extended to price levels not witnessed in more than a year. The British Pound has leaped on increased interest rate hike anticipations in the aftermath of BOE (Bank of England) monetary policy final decision as well as reinforced hawkish remarks from a Bank of England member that has been defined as dovish.
Furthermore, in the UK, there had been the acknowledgment by lawmakers which stated that UK law is going to be removed from European Union legal requirements. Elsewhere in Eurozone both the German DAX30 and French CAC40 closed down small with negative 0.2%, as the Spanish IBEX35 was a bit of more heavier dropping minus 0.4%.
Equities in Asia-Pacific region ended mixed following overcoming a short bout of risk aversion as North Korea performed one more missile test. Japanese equities gain ground, as the South Korean equities likewise progressed to show some resiliency. Stocks trading in Hong Kong and India clicked higher.
Chinese mainland Index dropped on the heels of Friday's unsatisfactory industrial production and retail sales data, which extended to weigh on raw materials concerns, ultimately causing a move to the negative zone for Aussie's stocks. In spite of this, following the closing bell, China noted stronger-than-expected financial lending figures for August.
The Euro-Dollar has risen 16% versus the US Dollar within the last nine months. In spite of the tribulations in Eurozone, the Euro-Dollar has outperformed the greenback in 2017. We all know, there's no valid value for the currency. They all are fundamentally worthless and only backed by monetary debt. Nevertheless, it's a relative game-play.
And comparatively the world’s reserve currency, the greenback, is relinquishing market value quickly versus a phony single currency called Euro Dollar. The Eurozone single currency has long been doomed out for quite a few years yet still is successfully winning the war versus the US Dollar - go figure!
British Pound made close to Two hundred points versus US Dollar bringing levels to 1.3610 before settling high on 1.35 area, an increase of approximately 1.3%. The Japanese Yen turned around to the downside following an earlier raise following the North Korean missile launch reports.
Bitcoin/Dollar flash-crashed once more right after Friday’s (Sep. 8) traumatic move. This time around following the remarks of the well-known Wall Street executive (The CEO of JP Morgan Chase Jamie Dimon), who condemned the cryptocurrency as " a fraud that will blow up" on Tuesday afternoon in New York.
The Bitcoin and the entire cryptocurrency segment was smacked, with the market capitalization for the one hundred most worthy crypto-coins plunged by $6 billion following the Dimon's remarks, and Bitcoin alone dropped over 5% within a few minutes.
With the cryptocurrency sector already having been pushed lower by a fresh wave of regulation in China, the comments did trigger an additional sell-off hitting the 3,000 level. I have been calling for a significant correction in the cryptocurrency sector for a couple of months now following the massive rally from the July lows concentrations in the primary crypto-coins. Nevertheless, the long-term upward trend looks unharmed despite the 20% plus price decline within the biggest cryptocurrencies.
Gold Overview: Nearly all of that which we follow about Gold trading market continues to be neutral in the past month since the Risk Level retrieved out of what has been low concentrations levels. Ever since the yellow metal broke out to its highest price level in almost 12 months, we ought to find some of the actions rather quickly and show a lot more positive outlook. However, there are some troubling signs, such as the GLD fund digesting a large amount of money lately, hedgers insistently selling the rally, as the Risk Level is mounting.
Crude oil carries on to demonstrate short-term robustness for the time being, even though WTI (West Texas Intermediate) contract continues to be being affected by the $50 per barrel price level which capped the commodity’s value as of May.
The Federal Reserve's enormous balance sheet certainly will be the center of attention of next week's Federal Open Market Committee (FOMC) meeting which is broadly expected that Federal Reserve Chair Janet Yellen is going to declare the starting of a gradual lowering of assets acquired as a result of the 2008 financial meltdown. The two-day FOMC meeting is going to start on Tuesday.
The Housing numbers might also draw lots of attention, as reports on home-builder confidence, existing home sales, as well as housing starts all, are due to be released next week.
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