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Accents for today's American session
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Loading...These are the performances of the various S&P500 sectors before the market open:
After the current bull run became the longest on record in the U.S. (a title some dispute) there seem to be two questions lingering in the market. The first is whether the S&P500 can exceed the top set on 29.01.2018. On the 4H chart we see the following formation:
The price is locked in a range (diamond) from the 17th of August: likely due to the strong resistance at 2875, near the all-time high. A diamond top is usually a reversing formation, meaning that the if the diamond bottom is penetrated to the downside, we could see a short-term reversal to the downside. Considering, however, that this is a 4H chart and the price hasn't yet penetrated the formation, any predictions seem farfetched.
The second question is whether the market is overvalued. The following chart shows that the valuation of the S&P500, while not cheap, certainly isn't excessive:
This is the P/FCF for the index. As can be seen, the multiple peaked in January, and is currently around 21.445, below the peak around 25.
Naturally, rising rates exert a downward pressure on stock values. However, the level of the index certainly isn't excessive. We cannot speak of overvaluation, nor of "irrational exuberance". This doesn't mean that SPX should be bought, simply that we are not in overvalued territory yet.
In the currency pairs, we saw the EUR/USD attempt to return to yesterday's 1,16 but failed several times at the 1,158-9 level, before continuing its downwards trend.
We saw dollar strength in all currency pairs, with the AUD/USD falling sharply from 0.735 to 0.727.
In 17:00 Sofia time we expect new home sales for the U.S.
These are the stocks we will be tracking in today's session:
Alibaba - Despite lower earnings, the company announced 61% growth in sales. We expect a rally in the shares, which should be strengthened by the high short interest in the stock: 11,55%, a large portion of which is from the past few months. There is a high probability that the market will shake out the weak hands today.
Hormel - The pork-products manufacturer voiced concerns about future prospects due to the trade war and overall industry dynamics.
Facebook - The company has removed Onavo Protect, a security app, from the AppStore because it violated data security rules. It also removed myPersonality because it might expose users' personal data.
JPMorgan Chase The company will target millennials with its Sapphire Reserve Card.
GlaxoSmithKline - An appeals court judged that the company cannot be sued over a suicide caused ostensibly by a generic version of its Paxil anti-depressant.
Synopsys - We expect a jump in the shares of the semi-conductor company, especially amid the overall declines in the silicone sector: the company announced stronger expectations for the second quarter.
Original post: Stocks making the biggest moves pre-market
Sources: CNBC, Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
Image: pixabay.com
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