- US indices started today trading session with modest gains. The US30 dominates, gaining 0.3%
- Wall Street does not react with a sell-off to rather hawkish comments from the Fed (Logan); 10-year bond yields rise to near 4.05%, and the dollar strengthens
- Software companies dominate U.S. gains; GitLab gains 6%; Arcadium Lithium gains 30% after news of Rio Tinto acquisition (RIO.UK)
Market sentiment in the States is mixed today, with gains dominated by the Dow Jones Industrial Average (DJIA), where US30 contracts are trading up nearly 0.3%, against virtually neutral US100 and US500 levels. The dollar's strengthening does not dampen sentiment, as the Fed, while seeing stronger macro data - sees it more as a proxy for a probable soft landing, while confidence in bringing inflation to the 2% target persists.
Following this pattern, the strong dollar and the rise in yields are rather perceived by the market as evidence that consumption is solid, and the labor market is strong, and they are not concerned about a potential 'cooling' of dovish sentiment at the Fed, leading to the conclusion that a rate cut will be at best more staggered, but will happen.
US Wholesale Sales (August) MoM: -0.1% (Forecast 0.4%, Previous 1.1%)
- Wholesale inventories (August) MoM Rev.: 0.1% (Forecast 0.2%, Previous 0.2%)
Overall today US wholesales report signals that wholesale sales dynamic weakened in August, while the scale of this monthly decline is not very big (and comes after quite strong rebound of 1.1% in July).
The software and cyber-security sectors are up again today, with Fortinet gaining more than 2%; sentiment of the other industries is mostly quite weak, or marginally better. Yesterday's declines are prolonged by Chinese stocks and the auto sector, where the sell-off is dominated by Tesla, which according to CPCA data sold about 88,000 cars made in China; Honda will recall up to 1.7 million car models due to software risks that could cause accidents. Semiconductor and oil market sentiment is also mostly weaker. Source: xStation5
US30 (H1, D1 interval)
After the opening, we see quite high buying volume, indicating a possible retest of 42,620-42,700 points. Strong macro data favor the dollar and the DJIA companies.
Source: xStation5
The US30 halted declines in August, at the EMA200 level (red line), and has been trading regularly higher since then; it is currently testing the upper limit of the upward price channel.
Source: xStation5
Boeing (D1 interval)
Boeing tests today levels unseen since October 2022, at $150 per share, lagging strong sentiments across the defense sector and broader US defense contractors. Downgrade to 'junk rating' for agency such as S&P can boost a company’s future funding expenses, while Boeing is now hit by a huge debt pile, worth more than $58 billion, with $4 billion of debt coming in 2025 and another $8 billion coming due in 2026. Last month, also Fitch informed about rising risk of 'junk' rating due to elevated, higher costs and prolonged strikes.
Source: xStation5
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