Summary:
- US indices are in the red ahead of the Wall St open
- Rise in US-China tensions could concern investors
- Buffet remains a buyer; Godfather of TA remains bullish
A rare event looks set to happen this afternoon with US stock markets set to open in the red. The start of the year has been very strong for US indices with the US500 surging higher and posting green closes every day so far.
However, yesterday’s trade saw some selling with the market ending off its highs and this morning a seeming rise in geopolitical tensions has threatened to end the run of daily gains. Reports that China is look to halt or slow down their purchase of US treasuries saw the USD tumble and stocks retreat with the US500 falling back below the 2740 level to trade close to its lowest level of the week.
The US500 has fallen back near its lowest level of the week following the Chinese reports. Source: xStation
There’s little by the way of economic data out this afternoon so the focus may be on some comments from prominent figures in the market. Legendary investor Warren Buffet is conducting an interview on CNBC and, as he regularly has said, he remains a buyer of US stocks.
Whilst that may not be particularly groundbreaking news, another story in the headlines is more dramatic with the self proclaimed “godfather of technical analysis” saying he is so bullish on US stock that he has had to sit down. Ralph Acampora describes the current market as “more powerful than the late ’90s,” and highlights the breadth of the market as something that it making him “very, very encouraged.”
The breadth of the NYSE is at its highest level in several years and bulls will point to this as further supporting the case for more gains. Source: Bloomberg
The Q4 earnings season for Wall Street will begin this Friday with the major banks kicking things off. See our preview of this here.