Stocks Hit Again- Nasdaq drops 1%
US Stock markets took another dive yesterday as investors once again prepared themselves for higher rates for longer after hearing from Federal Reserve Chair Jerome Powell, whilst the threat of escalation of the Middle East conflict is also weighing on markets. The Dow Jones dropped 0.76%, the S&P lost 0.86% and the Nasdaq finished the day 0.97% in the red. US treasury yields hit fresh highs again with the benchmark 10-year notching up a 16-year high hitting the 5% mark for the first time since July 2007. Currencies remained range bound although the dollar is still on the front foot against most of the majors and Gold took yet another step higher in light of geo-political concerns, now trading around $1,973/b.
Black Gold Continues to Shine
Oil prices continued to move higher during trading yesterday as geo-political concerns weighed on markets, with more Israeli troops massing on the border of Gaza. Brent moved higher to trade above $93/b and WTI is now back above $90/b. WTI has now risen over 11% since it’s low prior to the start of the recent conflict in the Middle East and some traders are expecting it to jump higher with Israel still talking up an imminent ground invasion. Initial technical resistance now sits at the $93.5 level and if we see a break of that, then it opens the way for a challenge of the yearly high at $95 and a swift move to $100. There is of course always a downside risk, but until traders start to see signs of a move towards peace in the Middle East then dips are likely to just present good buying opportunities.
Another Busy Day Ahead to Close out the Week.
Global markets are set to remain volatile into the New York close this week as traders continue to monitor the situation in the Middle East, but we still have some other risk events scheduled on the event calendar that will have some influence on market moves as well. The main focus for Asian markets will be the Chinese Loan Rate data due out midway through the session with investors once again looking for stimulus for the economy. The European session will see the focus again on the UK with the release of the latest retail sales numbers, with expectations of a 0.3% decrease in m/m activity. The US session will see investor focus move to Canada with their Retail Sales numbers also due out and we once again hear from Fed member Harker later in the day.
