Summary:
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US benchmarks trading higher at start of cash session
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Sentiment boosted by rally in Europe;S&P500 back at 3000
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IMF lowers global growth forecasts
Equities are in a pretty bullish mood this afternoon shortly after the US cash open, with a sea of green seen across the board. The major US benchmarks are trading higher by around 0.4% as it seems that indices across the Atlantic are joining in a rally which began this morning in Europe. The auto sector is driving the gains in the German Dax, with the market higher by around 1.5% and led by Continental which has rallied by almost 6% at the time of writing.
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A possible head and shoulders could be forming with the neckline seen coming in around the recent lows of 2974. A break below there would trigger the setup. A move back above the right shoulder at 3009 would invalidate the setup. Source: xStation
It’s a quiet session ahead on the economic calendar front with the US existing home sales and Richmond manufacturing index (both due at 3PM) the only releases of note. In the past hour the IMF have announced their latest round of forecasts, updating their projections from April. Selected forecasts for 2019 are as follows, listed vs the prior from April:
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Global growth forecast: 3.2% vs 3.3% prior
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US: 2.6% v 2.3% prior
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China: 6.2% vs 6.3% prior
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Eurozone: 1.3% vs 1.3% prior
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Advanced economies: 1.7% vs 1.8% prior
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Emerging markets: 4.7% v 4.4% prior
The report can be found in full here
While a S-H-S may be forming on shorter time frames, the longer term perspective seems to suggest the uptrend remains in tact for now with a pullback to the 21 EMA yesterday once more attracting buyers. From both perspectives the 2974 region could be seen as key support. All-time highs of 3023 remain less than 1% away. Source: xStation
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