Dow makes new 2019 high; focus turns to NFP

Summary:

• DJIA hits highest level of the year

• Tesla slumps after deliveries disappoint

• More gains for DE30 despite bleak factory data

• Top charts this week; USDJPY, Gold and Bitcoin

• What to expect from the NFP report?

The roaring rally which has greeted the new month seems to have taken a bit of a pause so far today with the US benchmarks such as the S&P500 and NASDAQ on course for remaining within yesterday’s range. Unusually, the Dow Jones Industrial Average (DJIA) is the best performer with the index breaking above the 26300 level to make a new high for the year. Some speculation that a breakthrough on trade is imminent is doing stocks no harm, and for now the path of least resistance appears to remain higher.

One individual stock that’s not having a good day however is Tesla  after the electric automaker revealed a big hit to vehicle deliveries in the first quarter. The drop of more than 30% is significantly worse than even the most pessimistic of analyst forecasts and comes at a time when the firm is aiming to ramp up production. The results could have been even worse for Tesla with only half of total deliveries for the quarter completed with just 10 days to go, but even with the late push final figures of 63,000 are well below the 90,700 seen in Q4 2018. Shares in Tesla have fallen as much as 10% to trade back below the 270 mark this afternoon. The stock is drifting back towards the lower reaches of its 2 ½ year range.

In Europe the Dax30 has managed to also make a year to date high, with the benchmark moving back above the 12000 mark. The German manufacturing sector does not seem to be already out of the woods, such conclusions can be drawn from today’s factory orders data for February. The data showed orders slumped as much as 4.2% in monthly terms after declining 2.1% in the first month of this year. The details of the report are not reassuring as the decrease in February was relatively widespread. The largest monthly decline was registered in capital goods which fell 6% (both domestic and foreign orders went down, the latter at a much quicker pace though). This seems to be consistent with the slowing production.

Our top charts this week focus on the USDJPY, Gold and Bitcoin and can be viewed in detail here.

The US NFP report is always closely watched by traders and this time it will be even more scrutinised after the report for February disappointed. US indices and the US dollar are typically the most sensitive to these reports, so here's what to expect.