US Stocks Headed for Positive Week

It has been a positive week for US stocks this week with last night’s 1.2% increase in the Dow Jones adding to the gains. Daily stock market moves seem to be driven by alternately increasing then decreasing fears of trade wars between China and the US as well as fears of a US strike in Syria. At the moment, tensions are reduced as President Trump tweeted that an attack on Syria may not happen soon. Having said this, for all of Trump’s faults, he generally doesn’t like to reveal any information regarding US military actions which is why he deliberately talks in ambiguous language on this subject.

Facebook (FB) stock resumed its decline overnight, falling 1.5%, following a relief rally the previous session. CEO Mark Zuckerberg has been testifying in Congressional hearings although his testimony certainly hasn’t brought any reassurance to those concerned about privacy. Facebook stock is currently down 9.7% for the year to date.

Gold prices reached a key technical level at US$1,350 yesterday but failed to hold it and broke back down to $1,335. Gold has now bounced of this US$1,350 level at least five times in the past year, thus reinforcing the strength of the resistance at this level. A break through US$1,350 would likely see a substantial rally as there is very little resistance above this point.

Oil price are continuing to climb with WTI prices trading above US$67 for the first time in three years. The middle eastern tensions together with Saudi Arabia’s desire to have oil reach US$80 per barrel have all been supportive of oil. Furthermore, the beginning of summer in the northern hemisphere generally sees higher gasoline (and therefore oil) demand as people drive more. Rising US production is being offset by falling OPEC production, largely as a result of significant declines in production from Venezuela as the socialist state collapses. 

Data Releases:

-    China Trade Balance 12:00pm AEST

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This article was written by William O'Loughlin - Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.

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This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
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