A number of investors say that a correction of up to 10% in the US stock market may be welcome as it would dampen speculation and overvaluation, and preclude a more drastic, less manageable fall later. Recent events have also prompted doubts over the US administration's ability to deliver promised tax cuts and infrastructure spending.
Technical analyst Frank Cappelleri contends that the technology sector's continued strength in comparison with the Standard & Poor's 500 index, which wavered last week, is largely due to strong performances from semiconductor manufacturers such as Micron Technology. He expects Micron to rise to a range of 36 to 38 basis points, matching its high of late 2014.
The financial sector (candles) has been up over 13% the last six months, easily the best performing sector over that period. The direct relationship between financials and the US dollar (blue) is overt, given the effects that a rising greenback has on interest rates/credit spreads that banks earn on loaned versus borrowed funds. Enter "stage left" and you have the Japanese yen (white), which generally moves counter to both the US dollar/financials, and which has surged to the upside since late 2016. Net-net the financials' bullish trade may be hitting some pressure as the latest Fed hike was actually deemed "dovish," thus taking the air out of the "sails" of both the dollar and financials.
Technical analyst Zak Mir predicts a rise of as much as 20% over the next two months for SDX Energy, an Egyptian oil exploration and production firm. Mir's charts show SDX holding around the 50-day moving average of 43p and says it could reach the top of the trend channel at 60p.
Josh Enomoto points out that a significant drop in Under Armour share price may prompt a contrarian impulse to buy, but he advises against it. Enomoto says revenue has never returned to Under Armour's 2011 peak and it has amassed substantial debt in efforts to keep pace with rivals such as Nike and Adidas, who are enjoying excellent years so far.
Strategist Tanvir Sandhu writes that bearish bond bets on reflation look likely to taper as a number of factors exert downward pressure on the rate. Factors that may stall further inflation include the tightening of Federal Reserve policy, the steady performance of the iShares 20+ Year Treasury Bond Exchange-Traded Fund, the possibility of interest-rate increases in Europe and rising overseas demand for Treasurys, he notes.
The People's Bank of China said it will allow more foreign investment in sectors including banking and insurance, and says it is in bilateral trade talks with Japan, Europe and other Asian nations. However, Zhou Xiaochuan, governor of the PBOC, said Beijing wants "fair treatment" for Chinese investors from other nations and awaits clarity on the US administration's trade policy.
Hong Kong Exchanges and Clearing will soon kick off a public consultation on proposed measures aimed at attracting listings, including creating a board and permitting listed companies to have dual-class share structures, said CEO Charles Li. The new board would focus on firms from the Association of Southeast Asian Nations.
State Street has launched a range of analytical tools in response to the rapid rise in demand for responsible environmental, social and governance investments. State Street's custody business safeguards $29 trillion and it claims that the new tools will help investors seek and select appropriate funds.
IHS Markit's composite purchasing managers' index for manufacturers and service providers in the eurozone increased to its highest level since 2011, rising to 56.7 in March from 56 a month earlier. The gain suggests overall market growth and has led to expectations that a tapering of the European Central Bank's stimulus scheme is more likely, although the ECB remains cautious on the sustainability of the rise.
Cultivate relationships with industry leaders and value generators from around the world. Meet with potential new partners, clients or future colleagues. The MTA's 44th Annual Symposium takes delegates from the theoretical frameworks popularized in behavioral finance through an applied learning of the most vigorously validated elements of technical analysis.
It's never too early or late to start the MTA Membership Application Process. With Member Status, you have an unparalleled opportunity to shape the future of the MTA by holding office or chairing a committee. To acquire full Member Status, you must obtain three sponsors and complete the Application for Member Status.