JP Morgan signaling a potential sell-off

Daily Analysis - 25/07/2019

U.S Stock are threaten with a significant sell off

According to a strategist in J.P. Morgan the U.S. stocks’ rally, this year could be coming to an end this quarter.

A possible bearish momentum could be created by a downward update in earnings estimates for 2020, forecasted by a key global market strategist at J.P. Morgan. Experts currently expect that the earnings will grow around 14% in 2020. The S&P 500 Index and Nasdaq Composite went up by more than 20% for 2019 while the Dow Jones Industrial Average went up around 17%.

Greenback wins over Gold

On Thursday Gold weakened while the popular greenback floated near a 60-day top. In the meantime many traders secured their profits before the major central bank gatherings this month. The European Central Bank will meet today. On Thursday the U.S. dollar went near a 60-day top versus a box of important rival currencies. A more robust dollar forced gold to become more expensive for owners of other currencies.

Spot gold fell 0.2% to $1,422.79 per ounce, while U.S. gold futures fell 0.1% to $1,422.89.

NASDAQ and S&P 500 touched record highs

On Wednesday, the S&P 500 and Nasdaq Composite touched their all-time highs driven by robust positive momentum in chipmaker stocks.

The general index increased by more than 0.5% to 3,019.54. The popular NASDAQ surged nearly 0.9% to close the day at 8,321.49. However, the Dow Jones Industrial Average ended almost 80 points in the red at 27,269.96 while investors observed the insufficient earnings from Caterpillar and Boeing.

Middle East tensions drives oil up

On Thursday Oil went up due to increasing Middle East pressures but also after U.S. crude stocks fell more than anticipated. However, profits were stemmed by a weak interest outlook due to strong indications of a possible global economic growth retraction.

U.S. West Texas Intermediate crude increased about 18 cents to $56.05 a barrel, having dropped more than 1.5% in the previous session.

Brent crude futures climbed more than 16 cents, to $63.34 a barrel after falling 1%.