Market News
- U.S. indexes closed up on Tuesday and hit a near two-week high after softer producer prices data reinforced bets of an interest-rate cut by the Federal Reserve in September. Dow Jones advanced 408 points, S&P 500 was up 90 points and Nasdaq Composite surged 407 points.
- U.S. producer prices increased less than expected in July as a rise in the cost of goods was tempered by cheaper services, indicating that inflation continued to moderate. In the 12 months through July, the PPI increased 2.2% after climbing 2.7% in June.
- The core PPI number furthers the narrative that the Fed has done an excellent job of keeping inflation relatively under control and that the more likely move is going to be a rate cut sooner rather than later.
Market Views
- Asian stocks slid on Wednesday, despite overnight gains on Wall Street as a soft producer inflation reading furthered bets that the Federal Reserve will begin cutting rates from September. Hang Seng index fell 70 points and Nikkei 225 index dropped 57 points.
- Data earlier this week also showed Japanese producer inflation grew as expected in July, pushing up concerns that a sustained increase in inflation will give the Bank of Japan more headroom to hike interest rates.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation:
Last: 39,767
Target price:
Protective stop:
Outlook
Price is going to test its overhead support-turned-resistance zone at 39,850. Stochastic is at the overbought zone and MACD remains bullish. We could see potential price correction at this resistance zone.
Trading Idea
Sell 39,850 for 39,560 with a stop above 39,950
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 17,079
Target price:
Protective stop:
Outlook
Price retested the resistance zone after breaking it on 2 August. The 20EMA is still falling, hinting at more downside ahead. Stochastic remains weak but MACD has turned bullish. Price has to close above 17,300 for more upside.
Trading Idea
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation:
Last: 19,001
Target price:
Protective stop:
Outlook
This index is strong and bullish as it further penetrated above its resistance zone. The 20EMA is rising, hinting at more upside ahead. Both Stochastic and MACD are bullish. We are likely to see price retracing to 20EMA for its next rally.
Trading Idea
Buy 18,610 for 18,960 with a stop below 18,530
DAX Index
(CFD Symbol: GER40)
Trend:
Recommendation:
Last: 17,859
Target price:
Protective stop:
Outlook
Price could be moving within a falling wedge chart pattern. It is going to test its overhead resistance zone at 17,960. Both Stochastic and MACD are weak. We could see price retracing from the resistance zone and move lower.
Trading Idea
Sell 17,960 for 17,740 with a stop above 18,050
