US stocks probing YTD highs; GBP little changed after Brexit extension

Summary:

• S&P500 back at 2900 as Initial Jobless hits 49 year low

• Stock of the week: Merck Group

• DE30: Deutsche Boerse considers another major purchase

• Muted market reaction as Brexit extended again

• Crypto newsletter

Two second tier pieces of data from the US in the past hour have come in at levels that alert the attention with the latest inflation figures moving above 2% while unemployment claims fell to their lowest level in 49 years. US stocks are trading mildly higher with the S&P500 close to its highest level of the year. The market is probing the big psychological 2900 level and has recovered from some weakness seen on Tuesday. Price dipped below the H1 cloud in what could have been seen as an early sign of some weakness but the bears failure to push below 2877 has seen them rescind their advantage and now bulls have the opportunity to push up towards all-time highs around 2946. The RSI has pulled back from overbought territory to now trade at a slightly elevated 62.0 level.

With over 350 years of history of operating as going concern Merck Group is the oldest among the current DAX members.The company has a strong position in both chemicals and pharmaceutical sectors. However, operations in the former sector may be set to get a boost further thanks to the newest acquisition. In this analysis we will take a look at the operations of Merck Group as well as how new purchase would fit into its portfolio. Merck (MRK.DE) has been trading within an uptrend since early-2018 and trades over 10% higher YTD. Note that the stock has reacted positively a few times to both, the upward sloping trendline and the 200-session moving average, therefore it may be wise to keep track of this technical levels. While the performance was stellar during past year Merck shares still trade some €15 below its all-time high. Source: xStation5

Yesterday we wrote about Deutsche Boerse’s (DB1.DE) purchase of the risk management software firm, Axioma. However, the German stock exchange operator seems to be on the buying spree as news of another major purchase surfaced today. The company announced that it is in talks with the Refinitiv, the US company providing financial data and infrastructure. The talks concern potential purchase of Refinitiv’s FX units by the Deutsche Boerse. While little details are known, Deutsche Boerse’s representatives said that reports of a $3.5 billion deal value are unfounded.

The high drama of a Brussels summit between the 28 EU leaders that ran late into the night failed to cause a commensurate move in the markets, with both the pound and UK stocks decidedly nonplussed at the outcome. An extension of the April 12 deadline was widely expected, but there was a little bit of a surprise in the new length agreed upon which means the UK is now set to leave the EU by October 31. GBPUSD remains below key near term resistance at 1.3120 while a rising trendline from last week’s low around 1.3000 is providing support.

Our latest Cryptocurrency Newsletter provides an overview of the asset class and looks at the latest developments in the space. The price of Bitcoin has soared higher of late but there’s been a bit of weakness today with price dipping back below the $5000 mark. Read more here.