Summary:
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New all-time highs for US500 and US100
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Oil near 1-month high after DOE shows larger than expected draw
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Pound looks to recover from 2018 low against the Euro
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US GDP beats but markets show little reaction
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Crypto pulls back; University’s offer related courses
It’s been yet another day of gains for US stock markets so far, with the US500 and US100 extending up further into uncharted territory. The US30 is yet to break its previous peak but with the markets in such a bullish mood one could be forgiven for thinking it is only a matter of time before it happens.
The latest weekly crude inventory figures from the US have produced their usual high level of volatility in the Oil price in the immediate aftermath, but as the dust settles the market seems to be looking to move higher with both OIL and Oil.WTI sitting on decent gains for the day. The headline reading of -2.6M below the -0.7M consensus forecast, and also lower than the 0.0M seen in last night’s API release. While it is not as far negative as last week’s -5.8M it does represent a larger than expected drop and also means that 3 of the past 4 releases have been sub-zero.
There’s been a pretty large move higher in the pound this afternoon as the head Brexit negotiator for the EU, Michel Barnier, has said that he wants to make a Brexit deal. While the comment is pretty vague in its nature, it does represent something of a breakthrough and it appears that both parties are looking to come to an agreement and avoid a no-deal outcome which would clearly be negative for sterling. The pound has jumped by around 150 pips against the US dollar in the last couple of hours and moved back to the 1.30 handle while the pound/euro rate has also rallied after reaching its lowest level in almost a year yesterday.
The main economic release of the day from north America has caused barely a flicker as far as the market reaction is concerned, despite the latest US growth reading being revised higher when expectations were for a drop lower. In annualised terms the US preliminary GDP for the second quarter came in at +4.2%, above the +4.0% consensus forecast. The preliminary reading for this data point is actually the 2nd of 3, and the first reading (advance) showed a print of +4.1%. So against this backdrop, with the second reading showing an upwards revision compared to the expectation for a downward one, the date could be described as a positive surprise.
Cryptocurrencies have enjoyed a good run of late but the markets are pulling back a little today with only Dash in the green. Bitcoin has dipped back below the 7000 level and has fallen by 1.7% on the day at the time of writing. On the fundamental side, according to a Coinbase survey nearly a half of the world’s best universities offers courses related to cryptocurrencies or blockchain. More precisely, 42% of top 50 universities all over the world conduct such courses. What’s interesting, these courses are organized in miscellaneous subjects including, anthropology and finance. The best results within the above-mentioned fifty universities are achieved by the Stanford University (ten courses) and the Cornell University (nine courses).
