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US indices near 5-month highs after mixed data

15:31 15 March 2019

Summary:

  • More gains for US stocks; US100 at 78.6% Fib

  • US industrial production misses but Uni Mich beats

  • Tesla shares fall as Model Y unveiled

 

The final session of what has been a good week for US stocks has begun on the front foot with the markets rallying higher from the opening bell. As has been the case in recent sessions, the US100 is leading the way and the market has just notched up its highest level since October 2018. Thursday’s trade saw a small pullback but after beginning on Monday around the 7000 mark it’s been pretty much one way traffic, and the US100 has gained almost 5% since!

The US100 is now back at the 78.6% fib retracement at 7320 of the decline from last October’s high. A break above here would open up the possibility of further gains towards the record peak of 7726. Source: xStation    

 

A couple of second tier pieces of US data out this afternoon have sent conflicting messages for the world’s largest economy with industry seemingly underperforming but consumer confidence resilient. Industrial production for February came in at +0.1% M/M against an expected +0.4%, but an upwards revision to the previous reading (now -0.4% from 0.6% first time around) makes the data not seem so bad. While the US is still outperforming its peers on the industrial front, there are an increasing number signs that activity is slowing in the world’s largest economy.     

The latest industrial production figures showed a decline that is matched in the recent ISM readings. Together they indicate that manufacturing output is slowing down. Source: XTB Macrobond

 

Not long after the industrial data, the final economic release of note for the week showed a better than expected read from the US consumer. For March the University of Michigan consumer sentiment came in at 97.8 from a consensus forecast of 95.7. It’s worth noting however that there was a sizable revision to the prior release, which now stands at 93.8 from 95.5 originally. There were mixed messages on the inflation front with 1-year inflation dropping to 2.4% from 2.6% prior whereas the 5-10 inflation increased to 2.5% from 2.3% beforehand.

Consumer sentiment according to the University of Michigan remains pretty strong, in a pleasing sign for retail sales. Source: XTB Macrobond  

 

Finally, in terms of individual stocks there’s been quite a drop in Tesla with the electric carmaker lower by more than 4% not long into the session. The declines come as the firm introduced its latest vehicle, ther Model Y, which is a crossover SUV and cost between $39,000-60,000. The Model Y is about 10 percent bigger than the Model 3, seats seven, features a panoramic glass roof and 66 cubic feet of cargo space, Tesla CEO Elon Musk said, showing off a Model Y prototype at the Tesla Design Center in Hawthorne, California on Thursday night.

Shares in Tesla have dropped again today and the market is moving down towards the lower bound of the range seen in recent years around 245. An RSI of 40 suggests mildly oversold conditions. Source: xStation

 

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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