- S&P 500 now headed for its best month since January, DJIA consolidating.
- Trump has threatened additional tariffs on China, all eye son G20.
U.S. stocks were mixed on Thursday ahead of the Xi/Trump meeting where there are hopes from the bulls that an agreement will prevent another round of antagonistic tariffs on additional $300 billion worth of Chinese imports. However, on Thursday, the Dow Jones Industrial Average, DJIA, lost 10 points, or 0.04% to 26,526 while the Nasdaq composite index COMP rose 58 points, or 0.73% to 7,967. The S&P 500 index added 11 points, or 0.38%, to 2,924 and is now headed for its best month since January.
US data and G20 expectations
The final Q1 GDP estimate was unchanged at 3.1% saar vs expectations of 3.2%. However, the not so good news was personal consumption was revised 0.4%pts lower to +0.9%. Meanwhile, as markets expect trade talks to resume between Xi and Trump leading to additional US tariffs to be delayed for a period of time, analysts at ANZ Bank argue that the complexity of resolving economic aspirations between the two countries is a herculean task and note markets remain cautious. “For now, a lot of negative news has been priced in, with markets understandably subdued ahead of the outcome of the meeting which is scheduled to take place on Saturday. Trump has threatened additional tariffs on China if no progress is made at G20 towards a trade deal.”
DJIA levels
The DJIA is clinging to the pivot at 26552 on the daily chart, consolidating having backed away from the 3rd Oct 2018 highs which is putting the 26951 Oct 2018 highs and the 27000 psychological level back off the charts for the meantime. On the downside, and below 26500, the prior sideways consolidating above the 61.8% Fibo retracement level of April to June swing highs and lows guard 25984 and then a 50% mean reversion of the current range to the 257940s.
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