Summary:
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US stocks set to break longest bull market record
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5 things to watch on the US500
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Oil remains near the highs after large DOE draw
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Nafta comments and retail sales leave CAD searching for direction
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Are US yields on the verge of a deeper decline?
Barring an extremely dramatic crash today, the S&P500 (US500 on xStation) will post its longest ever bull market in breaking the record from the 1990s. Having said that, with a possible technical reversal signal printed yesterday just shy of its all-time high and a rally that's clearly long in the tooth are we set for a pullback ahead?
The S&P500 managed to notch an intra-day peak during yesterday’s US session - although the futures had gone higher outside of cash hours back in January. The market dipped lower last night on the latest Trump controversy but it has recovered throughout the European day and trades less than half a percent from its record peak. In our in-depth analysis we provide 5 things to watch out for going forward for this market.
The latest crude data from the US has shown a sharp drop in stockpiles but with the decline being similar to last night’s API number and when you also consider the production rose again, then it is understandable why the price has paused after earlier making strong gains. Price was higher by almost 2% ahead of the release, rising to its highest level of the week but while today’s release was the largest decline since late July, it has as of yet, failed to provide the catalyst for an extension to the upside.
The main economic data from Canada this week has done little to provide any real clarity for CAD traders, with NAFTA related comments just moments after further muddying the waters. The USDCAD first fell lower on the consumer spending figures before reversing and moving higher as news that the US still see big problems ahead for a NAFTA agreement and a few hours hour later price is still lacking a clear direction.
Since the peak reached earlier this year (slightly above 3.12%) the US 10Y yield has moved below 2.9% over the recent days. Notice that the slide has been buoyed by an inflow toward safe haven assets amid increased risk aversion resulting from a turmoil around Turkey as well as Italy. As of yet, neither concern has abated and there is a likelihood that the US 10Y yield (and yields in general) might find itself under downward pressure in the upcoming weeks.
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