Summary:

  • NASDAQ (US100 on xStation5) closed above 7000 points for the first time while SP500 (US500) marked a fresh record as well
  • FANG shares contributed the most to those gains, their outlook still looks enticing
  • Bulls on US100 may face some obstacles as the index closes a key resistance
  • North Korea reopens a border hotline with South Korea

The currency market has been remarkably benign during the Asian session with the British pound slightly outperforming its major peers. Notice that the GBP will get another data today before noon (construction PMI) which could impact the currency to some extent. Apart from it, the euro has remained well above 1.20 against the US dollar while commodity-related currencies such as AUD, NZD or CAD have retreated subtly.

On the other hand, the yesterday’s US session turned out to be much more interesting as both US100 and US500 managed to close at their fresh record highs. The former added 0.83% whilst the latter picked up as much as 1.5%, the Dow Jones (US30) was also up gaining 0.42%. Looking into some details one may notice that those gains were shored up by several companies like Facebook, Amazon, Netflix and Google – known collectively on Wall Street by the acronym FANG. All of them added about 2% while Netflix surged as much as 4.8%, moreover other biotechnology stocks marked decent results as well, Biogen for example moved up almost 5%. Although FANG outperformed the stock market last year it does not mean the end of such a scheme in the oncoming months. Analysts on Wall Street see those businesses continuing to grow and thus predict another strong year for them and some other tech stocks in 2018 mainly on the back of the strength of digital businesses like e-commerce, online video, mobile advertising or smartphone apps.

link do file download linkUS100 drew a bullish engulfing on Tuesday which could lead to further gains. Source: xStation5

Technically US100 managed to keep those gains and as a result we got a bullish engulfing pattern. On the one side it could be a strong signal for bulls to continue their rally, on the other one though a resistance placed at 6545 points could constitute a hurdle for buyers at least in the short-term. Nevertheless it needs to underline that the index has been able to stay within an ascending channel and therefore subsequent gains seem to be on the cards. To sump up, until the price hovers above a support localized at around 6355 points any more durable pullbacks appear to be unlikely.

On the geopolitical front one needs to mention news cited by Reuters. Namely, according to the agency North Korea will reopen a long-closed border hotline with South Korea as soon as today (if they stuck to their scheduled time the opening already took place at 6:30 am BST). There are assumptions that the talks would aim to establish formal dialogue about sending a North Korean delegation to the Pyeongchang Winter Olympics.