Day Trading Pre Open - 07 January 2019

Good Morning Fellow Traders,

Thanks @Ravgnome. Okay - the plan is to resume our normal series of threads throughout the day. I know that @highlandlad is on board with this. Not entirely sure about @Oscar09 and @Quantum Torus so we may have to fumble our way around. It always seems to work out one way or another.

Global stocks rose and reversed the big losses they suffered the previous day.

The Dow Jones Industrial Average soared almost 600 points in the latest twist in a wild three months for markets.
Hopes for progress in the US-China trade dispute, a strong report on the US jobs market and comments from the head of the US central bank about its interest rate policy all combined to cheer investors.

China's Commerce Ministry said trade talks will be held Monday and Tuesday in Beijing and market watchers are once again looking for signs the world's largest economic powers will make progress toward resolving their dispute.
The trade tensions have dragged on for nearly a year and uncertainty over their outcome has dragged down stock indexes around the world.

Meanwhile the Labor Department said US employers added 312,000 jobs last month, a far stronger result than experts had anticipated.

US stocks have tumbled over the last three months as investors worried that the economy might slow down dramatically because of a variety of challenges including the trade dispute and rising interest rates.

The stock market's plunge also threatened to shake up the confidence and the spending plans of businesses and consumers.
Some analysts said investors were acting as if a recession was on the horizon, despite a lack of evidence that the US economy is struggling.

"It's hard to square recession worries with the strongest job growth we've seen in years," said Alec Young, managing director of global markets research for FTSE Russell.
"The strong December jobs report is a net positive for stocks because investors' biggest concern has been slowing growth."

Stocks rose even further after Federal Reserve Chairman Jerome Powell said the central bank will be flexible in deciding if and when it raises interest rates.

He added that the Fed is open to making changes in the way it shrinks its giant portfolio of bonds.
Recently investors were rattled when Powell seemed to suggest the Fed was intent on raising rates further after gradual increases over the past three years.
He also implied the Fed didn't plan to make changes to the runoff of the bond portfolio.

The S&P 500 index climbed 65 points, or 2.7 percent, to 2512 at 11.30am Eastern time, more than wiping out yesterday's loss. The Dow added 578 points, or 2.6 percent, to 23,254 after rising as much as 691 points. The Nasdaq composite jumped 231 points, or 3.6 percent, to 6694.

The US and China have raised tariffs on billions of dollars of each other's goods in a fight over issues including Beijing's technology policy, which Washington alleges is predatory.

Last month, US President Donald Trump and Chinese leader Xi Jinping agreed to 90-day ceasefire as a step toward defusing tensions.

Technology companies, banks, health care and industrial companies all made strong gains.
Microsoft rose 4.4 percent to US$101.70 and Deere gained 3.7 percent to $149.31.

Retailers and internet companies rose as well, with Amazon up 4.1 percent at $1561 and Google's parent company, Alphabet, rising 4.1 percent to $1,067.
Most of the companies in those industries stand to do better in times of faster economic growth.

On Thursday the S&P 500 fell 2.5 percent after Apple said iPhone sales in China are falling and a survey suggested US factories grew at a weaker pace. Technology companies took their biggest losses in seven years.

Smaller and more US-focused companies did even better than larger multinationals.

The Russell 2000 index surged 41 points, or 3.1 percent, to 1372. Smaller companies have fallen further than larger ones in the last few months as investors got nervous about how the US economy will perform in 2019 and 2020.

Bond prices also changed course and moved sharply lower. The yield on the 10-year Treasury note rose to 2.65 percent after it plunged to 2.55 percent Thursday, its lowest in almost a year. That helps banks, as higher interest rates allow them to make bigger profits on mortgages and other loans.

JPMorgan Chase rallied 2.4 percent to $99.45 and Citigroup rose four percent to $54.67.

European shares recouped losses from a day earlier, with Germany's DAX gaining 3.4 percent and France's CAC 40 rising 2.9 percent. Britain's FTSE 100 advanced 2.3 percent.

In Asia, Hong Kong's Hang Seng jumped 2.2 percent. South Korea's Kospi added 0.8 percent. Japan's Nikkei 225 index fell 2.3 percent on its first day of trading in 2019 as technology and electronics makers slumped on Apple's report that Chinese iPhone sales were slipping.

U.S. crude oil surged 2.4 percent to $48.21 a barrel in New York. Brent crude, used to price international oils, was up 3.1 percent to $57.66 per barrel in London.

The dollar strengthened. It rose to 108.27 yen from 107.77 yen. The euro rose to $1.409 from $1.1391. The British pound moved up to $1.2717 from $1.2630.

Wall Street has surged to close at its highest level in two weeks after a strong jobs report and assurances from US Federal Reserve Chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates.

Based on the latest available data, the Dow Jones Industrial Average rose 746.94 points, or 3.29 per cent, to 23,433.16, the S&P 500 gained 84.05 points, or 3.43 per cent, to 2,531.94 and the Nasdaq Composite added 275.35 points, or 4.26 per cent, to 6,738.86.

Technology stocks led the charge, jumping 4.3 per cent, bouncing back from the prior session's worst day for the sector in over seven years.

The Labor Department's employment report showed the US economy added 312,000 new jobs in December, far more than the 177,000 analysts expected.
Powell, in remarks to the American Economic Association, soothed market nerves with assurances that the central bank is sensitive to risks that worry investors and is not on a preset path of interest rate hikes.
"When you get such a strong jobs report and a Fed chairman saying he's patient and flexible it sends a message to the markets that we're moving in the right direction," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth in New York.

"We're not out of the woods yet," Pavlik added. "But it's the first time (Powell has) said anything that's dovish enough for the markets liking."

News that China and the United States would hold trade talks in Beijing next week helped tariff-vulnerable industrials lead the Dow's rally, headed by Caterpillar, United Technologies, 3M and Boeing.Earlier, stock markets were buoyed by news that China and the United States will hold trade talks in Beijing on Monday and Tuesday.

"The market's been grappling with growth, the Fed and China," said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware. "Those have been addressed today in a direct way."

Keeping with Friday's risk-on theme, oil prices rose in tandem with equities.
Brent crude futures rose $US1.11 to settle at $US57.06 a barrel, a 1.98 per cent gain. US crude futures settled 87 cents higher at $US47.96 a barrel, a 1.85 per cent gain.

Safe-haven assets retreated. Treasury yields rose sharply, and the dollar gained 0.8 per cent against the yen. Spot gold prices, which reached a six-month peak on Thursday, dropped 0.7 per cent.

"Longer-term bonds have sold off here today in price," said Tim Ghriskey, chief investment officer at Inverness Counsel in New York. "There aren't signs of significant economic weakness."

Powell's dovish comments pushed down the US dollar index , which gave up earlier gains and last traded down 0.1 per cent. The euro was little changed.

A positive open is tipped for the Australian share market on the back of stronger than expected jobs figures in the US.

The futures market predicts that the benchmark S&P/ASX 200 will climb 69 points, or 1.2 per cent, when trade resumes on Monday.

This is partially due to Wall Street closing the week at its highest level in two weeks after a strong jobs report and assurances from the US Federal Reserve that the central bank would be patient and flexible in steering the course of interest rates.

However, CommSec chief economist Craig James says the ongoing US government shutdown is seeing investors shift money away from the nation.
Mr James says investors will be keeping a sharp eye on trade talks between the US and China, which are due to begin this week.

China is feeling the effects of the trade war with the US and will this month attempt to stimulate its economy, which will also tickle the local market.

The start of a new calendar year and quarter is seeing investors reassess where they direct their money, Mr James added.
Aside from the trade battle between the US and China, Brexit and the US' stance on interest rates is holding local investors back.

"What we need is resolution. There's a lot of uncertainty at the moment," Mr James told AAP on Sunday.
"People would like a little more information before they start to invest."

Retail spending data and international trade figures are also due to be released this week.

The benchmark S&P/ASX200 index was down 14 points, or 0.25 per cent, to 5619.4 at 1615 AEDT on Friday.

The Australian dollar is starting to climb back after briefly hitting a low of 67.49 US cents last week, its lowest level since early 2009.

Source: 9Finance

Starting the full trading week off with a nutritious and filling breakfast.



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