Asia morning update - waiting for leads
Moderate gains are expected for Asia markets, returning to catch up to Wall Street that had rallied in the absence of which. That said, the wait continues for the US-China trade talk next week amid the lack of fresh impetus.
State of Union campaign
Early gains in the week for US markets on the back of earnings shifted into a flat tone with little derived from President Donald Trump’s State of the Union speech. Circling bipartisan, border wall and the age-old issue of China trade imbalances among others, the President offered little to excite markets that had, in the past, received doses of tax cuts and deregulation under the current administration. On the other hand, the speech itself may have once again invoked concerns with looming government funding issue and the US-China trade talks next week.
Altogether, this saw Wall Street halting the streak of gains as the likes of the Dow and the S&P 500 indices ended flat to mild red in the Wednesday’s session following the address by the President. For the S&P 500 index, while prices may appear to have surfaced from the 61.8% Fibonacci retracement level in the uptrend, the test is up ahead at the 2800 level. It would not be a surprise finding a period of consolidation in what looks to be an inverse head and shoulder pattern for the index. This is with approximately 50% of the earnings report yet to be seen and as one would note, sending broadly mellow outlook thus far. Unless a breakthrough comes through from the US-China trade negotiations, it would be difficult to find this uptrend continuing in the US.
Asia open
While the likes of China, Hong Kong and Taiwanese markets remains away for the Chinese New Year holidays, the local STI will be among which expected to return and catch up to gains clocked on Wall Street in the past sessions. Early movers in the region, noticeably the ASX 200 continued to rise, unfazed by the overbought situation as prices set eyes on the 6100 level.
For the day ahead, a couple of central bank meetings are expected across the Philippines, India and the UK, where a hold had been the consensus for all. Otherwise, it would likely be a light volume trade in this holiday shorted week for Asia markets.
Yesterday: S&P 500 -0.22%; DJIA -0.08%; DAX -0.38%; FTSE -0.06%
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Take a position on indices
Deal on the world’s major stock indices today.
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
