American session today (27.08.2018)

Last week American markets finished the week at record levels. The S&P500 was able to surpass the peaks from January tris year. These are the sectors that saw the largest gains:

Almost every sector experiences a gain.

The technical picture, however, shows a strong divergence in the trend momentum:

The upwards trend in the SPX is accompanied by a weakening RSI and DeMarker values. This could be a sign of a slowdown in the S&P500's momentum, indicating the possibility of a correction in the near future.

Meanwhile, the talks on renewing and updating NAFTA are proceeding very fast. It is expected that the US and Mexico could reach a deal today. Any deal, however, must first be approved by US President Donald Trump.

The President of the German Federal Cartel Office, an anti-trust agency, said that they will continue to monitor Facebook, Alphabet, Apple and Amazon to ensure they do not breach laws. Their intent is to ensure entry of competition and consumer choice.

Today we will follow the stock of Tesla, given the dramatic resolution of the company's latest saga. Elon Musk announced that the plans of taking Tesla private have fallen apart. It was also announced last week that the SEC has opened an investigation into the company, particularly due to Elon Musk's tweet that the company will be taken private. After last week's events, many believe that Elon Musk is incapable of managing the company by himself.

Asian indexes jumped during the Asian session after supportive remarks by the PBoC and Jerome Powell's dovish remarks at Jackson Hole. The MSCI Asia Pacific Index jumped 1,1%, while the Topix rose 1,2%. Powell's comments also led to continued uncertainty about the dollar, sparked by Trump's criticism of the Federal Reserve. The DX is currently at the 95 key support level. A close below this level can mark the beginning of a trend reversal. A similar dynamic can be seen in the euro-dollar:

The pair will likely try to breach the trendline resistance around 1,168.

During the weekend, US Senator John McCain passed away. McCain was a veteran from the Vietnam War and one of the most influential American politicians. He was also one of the key Republicans who opposed Donald Trump's policies.

Source: Bloomberg Finance L.P.

Chart: Bloomberg Finance L.P.

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