|Day's range||7,050.01 - 7,094.29|
|52-week range||5,895.12 - 7,700.56|
Based on the early price action and yesterday’s move, the direction of the March E-mini NASDAQ-100 Index on Friday is likely to be determined by trader reaction to the major Fibonacci level at 7022.25.
New orders for durable goods unexpectedly fell in December amid declining demand for machinery and primary metals. The sharp drop in the Philly Fed Manufacturing Index suggests the U.S. is now succumbing to the global industrial shutdown. Data on manufacturing and services went in opposite directions, sending a mixed message about current economic conditions. The housing market may have dodged a bullet when rates were rising, but if the economy continues to weaken then it may take another hit.
Some analysts are saying they expect to see a balance sheet plan from the Fed by the May meeting minutes, a decision on the matter by June and a halt to the Fed’s runoff by October, if not July. This would then help improve U.S. financial conditions and the financial markets.
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One more thing of note, due to the onset of inclement weather, the Fed did not hold its usual lock-up for media members ahead of the release. As a result, traders should look for volatile, two-sided trading since other key parts of the minutes are expected to be released on a rolling basis.
Talks between the two economic powerhouses are continuing this week. Ahead of the start of new talks in Washington, Trump said that trade talks with China are going well, adding the current March deadline is not a “magical date.” According to the original deal reached in early December between the U.S. and China, both countries have until March 1 to reach a new trade agreement, or the U.S. can impose additional tariffs on Chinese products.
Stocks were also driven higher by a rising sentiment that trade negotiations between the US and China would produce a good outcome. The markets will continue to buy the rumor and will likely sell the fact, so traders should be ready to take profits once an agreement is reached.
Investing.com -- The U.S. stock market reopened after the long weekend with a whimper, as sobering comments from the Cleveland Federal Reserve President Loretta Mester grabbed attention while traders waited for news of progress on trade talks with China.
Based on the early price action, the direction of the March E-mini NASDAQ-100 Index is likely to be determined by trader reaction to the uptrending Gann angle at 7033.00.
Based on last week’s price action and the close at 7063.75, the direction of the March E-mini NASDAQ-100 Index this week is likely to be determined by trader reaction to the Fibonacci level at 7022.25.
Last week’s price action in the Treasury markets, the U.S. equity markets and the U.S. Dollar strongly suggest that those calling for a top in the U.S. economy based on the headline inflation number, the weak retail sales report and the drop in industrial production, have wrongly determined that the U.S. economy has topped.
A positive outlook for U.S.-China trade relations encouraged investors to overlook the noise created by worries over a slowing economy and earnings growth. The retail sales and industrial production declines represented only one occurrence and not a trend. Furthermore, the data was taken during the government shutdown which may have skewed the results. If so, then the effects of any short-term disruptions will smooth out over the long-term.
Based on the early price action, the direction of the March E-mini NASDAQ-100 Index is likely to be determined by trader reaction to a short-term uptrending Gann angle at 7001.00.
Trade-related optimism supports global stock indices while weak data in the US sends the USD moving lower versus major world currencies.
As far as the major indexes are concerned, the S&P 500 Index was boosted by solid gains in the industrials and energy sectors. The energy sector was supported by higher energy stocks, which were boosted by higher oil prices. Strong performances in shares of Newfield Exploration, Apache and Devon Energy were primarily behind the strength in the sector.
The major indices were all in the green in early pre-opening trading with the tech-heavy NASDAQ Composite in the lead posting an advance near 0.45%.
The major Asian markets are following the lead of Wall Street which produced stellar gains on Tuesday. Both regions are being under pinned by the positive view on U.S.-Chinese relations, while the U.S. markets are getting an extra boost by the news that the government shutdown may be averted.
Based on the price action late in the session, the direction of the March E-mini NASDAQ-100 Index futures contract into the close is likely to be determined by trader reaction to the major Fibonacci level at 7022.25.
Avoiding another government shutdown should be positive for stocks and negative for the U.S. Dollar. The news would be a positive for U.S. economic growth which should underpin stock prices. During the recent 35-day partial closure, U.S. industry suffered losses, especially the airlines sector. U.S. GDP growth was also negatively affected. The dollar could weaken because hedgers would be encouraged to reduce some of their safe-haven positions.
The USD demand came back at the start of trade in London: the EURUSD pair has dropped to the lowest mark of the trading spectrum since November returning to 1.1300.