US stocks were again hit hard yesterday, when Wall Street experienced the worst day in the past 8 months amid political turmoil in the United States. We are seeing the so-called Trump deal, in which the shares and the US dollar were raised for months on Trump’s promise to be good for business, and also promised to take a less rigid stance towards banks. The bullish slump has disappeared, and we are seeing profit taking on recent moves that have shown record highs. The reason for doubt is the recent accusation and subsequently the creation of an independent supervisory board to examine allegations that Trump and / or the Trump administration have colluded with Russia in rigging elections in the United States. Former FBI director Robert Mueller was named special prosecutor of the Russian court, and the market expects that tax and other reforms will give way, as the White House is coping with it. Shares will remain under pressure, as traders are cautious, quickly drop stocks if political instability worsens.
Shares on Wall Street and in Asia are traded in negative territory with increasing US political problems. Caution comes in the light of a note by former KGB Director FBI who said that Trump had called him to abandon the investigation of former national security adviser Flynn, who recently resigned because of secret meetings with Russian politicians in which the media accused him of collusion with the Russians To influence the elections in the United States.
Concerns also leaked to currency markets where the US dollar was hit lower, falling against the major currencies, as we see the USD index, a measure of the strength of the dollar against the basket of currencies, dropping below 98. Continue reading
Yesterday’s trade showed that the markets were tired again, as we saw that Asian stocks don’t keep up with Wall Street growth, when both NASDAQ and S&P 500 showed record highs after stronger growth in energy reserves due to higher traffic In the crud oil. Nikkei 225 stopped at 20,000 points, adding 0.1%, while ASX 200 added 0.2% after a fairly neutral release of RBA-minutes, in which the Bank was concerned about housing and labor markets, balancing it with Forecast of sustainable GDP growth. In China, as in Shanghai comp. And Hang Seng lost 0.3%, as regulatory concerns mount.
In the currency pair, the dollar remained low, as we saw that the USD index, a measure of the strength of the US dollar against the basket of currencies, remains below the 99 level. JPY found strength, as sentiment fell overnight, prompting USDJPY to fall below 113.50, Canceling strong pressure on the purchase from the end of yesterday.
GBP remains muted ahead of today’s release of CPI, in which we expect a 2.6% growth year-on-year. Continue reading
US equities stopped returned early profits and fell again due to geopolitical factors and decisive statements by several representatives of the FED. Geopolitical factors, like intention of North Korea at testing missiles and developing their own nuclear capabilities. While South Korea wants to protect itself and insists on the need for negotiations with the US and China regarding the THAAD missile defense complex.
FED’s members shows strong position is expressed in their confidence in the need to raise rates as soon as possible. They also speak of a second increase immediately after the first, as well as a reduction in the balance of the FED. Asian stock indices and indices didn’t follow the example of Wall Street and are traded in the green zone. Continue reading