US stock markets have a very bad day, with the tech-based NASDAQ 100 Index falling by more than 4%, its biggest daily drop in over 2 years.
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- Global stock markets remain weak, especially in the USA where major indices fell strongly yesterday. The NASDAQ 100 Index fell by more than 4% to suffer its worst day in over 2 years, while the S&P 500 Index also fell strongly to trade at a new 5-month low. Both indices are trading below their respective 200-day moving averages, and we are close to the point where a lot of remaining institutional longs will be fully liquidity. This bearish stock market is due to the ongoing trade war between the USA on one hand and Canada, Mexico, China, and possibly the EU on the other. Recent new tariffs remain in force, threatening economic growth and inflation, with no deal in sight. A further negative factor is recent local Federal Reserve data suggesting that the US economy may be contracting, raising fears that the USA could enter a technical recession this summer.
- Japanese base pay data released earlier showed base pay is growing at its fastest annualized rate since 1992, at 3.2%, strengthening the case for further rate hikes by the Bank of Japan, and boosting the Yen. The USD/JPY currency pair is very close to a valid long-term bearish trend after markets saw further capital inflows into the Yen as part of a slight to safety. The USD/JPY only requires a New York close below ¥147.26.
- In the Forex market, the Euro has been the strongest major currency since today’s Tokyo open, while the US Dollar has been the weakest, putting the EUR/USD currency pair in focus.
- Natural Gas futures again reached a new multi-year high price yesterday, justifying the bullishness of trend traders. Many traders might find Natural Gas futures too large for their portfolio, so the ETF UNG might be used instead as a more affordable substitute.
- Gold is holding up relatively well despite widespread strong selloffs in commodities.
- Bitcoin fell yesterday to trade at a new 4-month low price, but at the time of writing is struggling to break up above the pivotal new resistance level at $80,306.
- There will be a release today in the USA of US JOLTS Job Openings data which is expected to show 6.5 million new jobs.
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