Summary:
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US benchmarks rally into uncharted territory
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US-China deal hopes provide the boost
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Busy week ahead on the economic calendar
The recovery from the sell-off seen earlier this summer is now complete for US stocks with the S&P500 moving above the prior peak from July to move up to a new all-time high. The recent high now marks the 4th fresh record high since the start of 2018 and it is not too surprising that is has come on the back of a positive trade headline. Reports from Reuters that Trump expects to sign a China trade pact at the APEC meeting in Chile (November 16-17th) are the catalyst for this latest leg higher and the market is now up by over 6% from the low seen at the start of the month.
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The US500 has moved up to a new all-time high and as such there’s little by the way of swing resistance overhead. A rising trendline going back to the Jan 2018 peak currently comes into play around 3055 but for now the trend remains firmly higher. Source: xStation
While the news on the trade front is no doubt pleasing it is worth noting that there’s several potentially key event risks that lie ahead for stocks in the coming days that could halt the latest push higher. Earnings are still in focus with Google parent Alphabet to report after the close tonight before fellow tech giants Apple and Amazon update investors on Wednesday. Almost half the companies in the US500 have reported their quarterly updates with the vast majority (circa 80%) coming in better than expected - admittedly against a low bar.
The middle of the week also see the latest Fed policy decision with expectations high for another rate cut, but the signalling going forward will likely be key. Friday sees the jobs report for October as well as the ISM manufacturing PMI. It is also worth pointing out that due to the clocks in the US not going back until next weekend, the time difference is less by one hour all week, therefore these events will happen an hour earlier in the UK than normal EG FOMC decision at 6PM wednesday.
The US30 has failed to follow the US500 and US100 into uncharted territory as the Dow continues to lag behind its peers. The market is only 1.5% off however. Source: xStation
