Global Indices Bid, USD, Gold & Oil Stabilize, Tesla Shorts Incinerated - US Market Open
- Risk-on tone despite increased spread of Chinese coronavirus.
- US dollar underpinned ahead of US President Trump’s speech.
- Tesla (TSLA) makes yet another record high as short sellers get carried out.
Risk-on Tone But Problems Still Lurk.
A better start to the European session as equity markets ignored ongoing Chinese flu risks and pushed into positive territory. While the number of people in China now infected exceeds 20,000 and with least 420 fatalities reported, European bourses took their cue from a positive session in the US on Monday and moved higher. Most European exchanges registered gains of 1%+ and now traders will be looking to see if this short-term turnaround is sustainable.
Tesla (TSLA) short-sellers are having another horror session with the electric car maker up over 13% @ $895 and climbing. The stock has soared from the low $170s in summer last year as short-sellers continue to get burnt. According to media reports, Tesla is the most shorted stock in the US with around 18% of its publicly available shares sold short.
Chart via IG.com
The US Dollar has kept hold of its recent gains as markets look ahead to tonight’s State of the Union address by US President Donald Trump. The greenback’s gains have been fueled by strong US data prints over the last few days, while the monthly US Non-Farm Payroll release is out on Friday at 13:30GMT.
Crude oil continues to press into support, but pressure has alleviated marginally during the session as talk swirls that the OPEC+ meeting - today and tomorrow - may see oil output cut by another 500,000 barrels a day to help counterbalance slowing demand. US crude oil trades around $51.00/bbl while Brent crude traded around $54.75/bbl.
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Crude Oil Daily Price Chart (July 2019 – February 4, 2020)
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