US stocks set for green open; S&P500 above 2900

1:38 PM June 11, 2019

Summary:

  • More gains seen for US markets ahead of the opening bell

  • S&P500 back above the 2900 level

  • Selling into last night’s close a sign of exhaustion?

 

US equities are looking to extend their recent gains ahead of this afternoon’s Wall Street open, with all the large-cap benchmarks trading higher ahead of the bell. Since last Monday’s low there’s been an incredible run higher for stocks, with the S&P500 adding in excess of 6% and the most widely viewed US index is called to begin above the 2900 mark this afternoon for the first time in over a month.

After gapping up over the weekend on the positive US-Mexico trade news, US stocks have pushed above the 2900 mark. Stochastics are now in overbought territory on D1. Source: xStation

 

The only release of note this afternoon from the US is the latest inflation data with the PPI in Y/Y terms coming in below estimates at 1.8% vs a consensus forecast of 2.0%. There’s been a bit of movement in the US dollar after the following tweet from Trump, with the US president seeming to look to lean on the Fed once more. The US central bank meeting next week is keenly anticipated, with Friday’s NFP miss seeing calls for a rate cut grow increasingly vociferous.

 

Trump once more took to social media to voice his displeasure at the Fed and their monetary policy. Source; Twitter

 

In terms of price action, the trade into the closing bell can often be seen as a guide as to the underlying strength of the market and there was some movement on this front yesterday that may offer a glimmer of hope to bears. The basic concept is that how the market ends can be seen as telling going forward, with the adage that amateurs trade the open, pros trade the close. Like any signal this should not be seen as foolproof, but it could well be worth noting that the market has sold-off into the 9PM closing bell in each of the last 2 days after rallying into it for the prior 4 days.

US stocks have sold-off into the cash close in the past couple of sessions, is this a sign of a little weakness which could suggest a pullback ahead. Source: xStation    

 

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