FOREX 4 minutes to read

NY Open: Wall Street weakness - appetiser or entrée?

Summary:  Wall Street opened with a pop today but debate still rages about whether the washout of the past few days was a mere blip or perhaps the start of something worse.


The Street was awash in red ink at yesterday’s close. Thursday is Thanksgiving Day in America and economists and analysts are puzzling over whether the recent equity market losses were just an “appetiser” or an “entrée.” The debate is ranging.

Those that believe the moves are merely an appetiser point to rising USD interest rates, softer than expected US economic data and slowing global economic growth as evidence of further losses to come. The “entrée” camp believe that the worst may be over. They think this week’s sell-off was a much-needed correction and exaggerated by low, holiday-thinned volumes. Q3 GDP growth is expected to a robust 3.7%.

 

This morning’s Initial Jobless Claims and Durable Goods Orders data doesn’t bode well for sustained Wall Street gains. October Durable Goods Orders dropped 4.4% (forecast -2.5%) September’s data was revised down from 0.8% to -0.1%. Jobless Claims rose 224,000 from an upwardly revised 221,000 result, last week. Sentiment from a 1.4% gain in Existing Home Sales was offset by a dip to 97.5 in the Michigan Consumer Sentiment Index.

 

Wall Street opened with a pop, but the sustainability of the gains is questionable. The Nasdaq climbed 1.37% just after 14:00 GMT and only needs another 0.33% gain to recoup all of yesterday’s losses. However, prices have already slipped from their early peaks.

 

WTI oil prices rebounded from yesterday’s $52.88/barrel low after the American Petroleum Institute (API) reported a 1.545 million barrel drop in US crude inventories. WTI is trading at $54.56/b as of 1:345 GMT in anticipation of a corresponding drop in the Energy Information Administration (EIA) report.

 

The US dollar slipped in New York trading, but the losses are marginal compared to yesterday’s losses. The mixed US data gave EURUSD a bit of a boost, but those gains weren’t sustained. The antipodeans are higher on firmer commodity prices.

 

Trading volumes will continue to ebb as American’s get an early start to their Thanksgiving holiday.

USDX 1 hour. Source: Saxo Bank
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)