Stocks Rally Runs Into Trouble
The recovery rally in US stocks following the April 2nd tariff announcements has faded in recent days with traders struggling to navigate Trump’s unpredictable trade agenda. Tariff announcements and subsequent reversals, hostile action against China, threats of new tariffs and subsequent postponing, have made it incredibly tricky for investors to establish a clear directional view. However, the sustained sell off in USD has helped underpin stocks to some degree though capital has been drawn to other safe-haven assets such as gold and JPY.
US/China in Focus
News this week of exemptions for some tech products in the US/China trade war has offered some signs of hope. However, with Trump’s volatile rhetoric and almost daily threats of new tariffs (autos, semi-conductors etc), the market is struggling to find conviction in a further push higher.
Powell On Watch
Looking ahead today, comments from Fed’s Powell could help drive fresh buying in stocks. Powell’s speech on the economic outlook later today is widely expected to lean to the dovish side which should put focus back on near-term Fed easing expectations, if only temporarily. With USD likely to see a fresh move lower if Powell delivers on these dovish expectations. The caveat to this is that if Powell is seen worrying too much about US economic prospects in the face of Trump’s ongoing trade war, this could simply add further fuel to the safe-haven rally, leaving a muted reaction in stocks.
Technical Views
Nasdaq
The rally in the index has seen price trading back up to test the bear channel highs and the 18,912.17 level. This are ais holding as resistance for now and, until broken, means risks of a fresh turn lower remain seen. Above here, however, focus turns to 19,955.14 as the next bull objective, in line with rising momentum studies readings.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.