News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/HNqHcbL6vk
  • The US Dollar continues to push higher against ASEAN currencies after the FOMC rate decision. This leaves the USD/SGD, USD/THB, USD/PHP and USD/IDR outlook mostly tilted higher. Get your market update from @ddubrovskyFX here:https://t.co/zn56iTFBxM https://t.co/FbepD4RaFg
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:https://t.co/MrLGSp7FYa https://t.co/XS0176LyOg
  • The Japanese Yen remains in focus with strength potential on risk aversion themes to go along with weakness on themes around higher rates. Get your weekly $JPY technical forecast from @JStanleyFX here: https://t.co/l4UICqJzJy https://t.co/dQ2pS0E4fp
  • Google finance-related search interest in 'Evergrande' has almost overtaken 'Covid'. 'Taper' doesn't even register on the scale https://t.co/P6H9sHFVIB
  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:https://t.co/l4kAWDJ2wm https://t.co/b9m5ADIqqb
  • Gold remains higher despite positive Evergrande news out of China. Meanwhile, copper bulls are pushing prices upward as the potential for a housing crisis in China ebbs. Get your market update from @FxWestwater here:https://t.co/TK3MNntBdA https://t.co/14UKjR4w6M
  • GBP/USD has flattened overnight after its strongest rally in a month on Thursday. The British currency has been under pressure recently as an energy crisis has caused a number of gas providers to go bankrupt. Get your market update from @HathornSabin here:https://t.co/3D8s2eIVWv https://t.co/JDGNwKYyOn
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sIauS https://t.co/JIT5it2HAt
  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

Margaret Yang, CFA, Strategist

S&P 500, HANG SENG, ASX 200, ASIA-PACIFIC MARKET OUTLOOK:

  • Major US indices rebounded on Thursday after trading restrictions on GameStop and AMC were imposed by several retail brokers, leading to a fall in market volatility
  • Asia-Pacific indices look set to trade higher following a positive US lead, Biden’s stimulus push
  • US Q4 GDP advanced 4% QoQ, in line with expectations; housing starts disappointed

S&P 500, Hang Seng, US Q4 GDP, Asia-Pacific Stocks Outlook:

Wall Street equity indices recovered nearly half of Wednesday’s losses while the price of GME and AMC entertainment stocks tumbled following trading restrictions imposed by several retail brokerages overnight. A battle between hedge fund managers and US retail traders gathered on social media sparked a new round of profit-taking on Wall Street, but the impact could be temporary as there seems to be a lack of evidence for systemic risk to warrant a meaningful pullback in the US equity markets.

On the macro front, US Q4 GDP advanced at an annualized pace of 4% QoQ, in line with expectations. A moderate economic expansion in the fourth quarter reflects continued recovery from the sharp decline earlier last year and the lingering impact of the pandemic. Initial jobless claims fell for a second week to 847k, better than the baseline forecast of a 875k increase. New home sales grew at a slower-than-expected pace of 1.6%, missing expectation of 1.9%.

Mixed US data points to further need for fiscal and monetary support to foster a fragile recovery. Meanwhile, House Democrats are asking President Biden to push for recurring cash payments in future relief packages to provide longtime support for American households. This proposal may reignite reflation hopes and lead cyclically-linked financials, materials and industrials sectors to outperform.

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

Source: Bloomberg

Sector-wise, all 11 S&P 500 sectors climbed on Thursday, with 71.5% of the index’s constituents closing in the green. Financials (+1.92%), materials (+1.82%) and industrials (+1.51%) were among the best performing sectors.

S&P 500 Sector Performance 21-01-2021

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

Source: Bloomberg, DailyFX

A rebound on Wall Street may set a positive tone for Asia-Pacific markets, with equity futures pointing to a higher start across Japan, Australia, Hong Kong, Singapore and India on Friday.

The Hang Seng Index (HSI) has fallen by 4.5% from its recent peak of 30,159 on January 25th, due to tightened liquidity conditions as well as receding southbound inflows this week (chart below). The PBOC has pulled out CNY 328 billion from the banking system over the past 3 days via reverse repo operations, causing tightened liquidity conditions and boosting reporates, which weighed on stock markets’ performance.

Hang Seng Index vs. Daily Southbound Net Flow – 12 Months

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

Source: Bloomberg, DailyFX

S&P 500 Index Technical Analysis:

Technically, the S&P 500 index tested the 50-Day Simple Moving Average (SMA) line and rebounded. Price returned to the “Ascending Channel” and may eye the lower bound for support. The MACD indicator has formed a “Death Cross”, suggesting that downward momentum might be prevailing in the near term. Support and resistance levels can be found at 3,749 (61.8% Fibonacci extension) and 3,804 (76.4% Fibonacci extension) respectively.

S&P 500 IndexDaily Chart

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

Hang Seng Index Technical Analysis:

The Hang Seng Index pulled back from the 127.2% Fibonacci extension level at 29,870 and has since entered a technical correction. The index is testing the 20-Day SMA for support, breaking which may lead to further losses with an eye on 28,315 – the 76.4% Fibonacci extension. Near-term momentum still favors weakness as suggested by the formation of a bearish MACD crossover. An immediate resistance level can be found at 29,040 – the 100% Fibonacci extension.

Hang Seng Index Daily Chart

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

ASX 200 Index Technical Analysis:

The ASX 200 index returned above the 50-Day SMA line today after registering a decent rebound. Near-term momentum remains bearish-biased however, as suggested by a weakening MACD indicator and the formation of a large bearish bar on Thursday. Immediate support and resistance levels can be found at 6,630 (161.8% Fibonacci extension) and 6,810 (200% Fibonacci extension) respectively.

ASX 200 Index Daily Chart

S&P 500 May Lead Hang Seng, ASX 200 Higher Amid Reddit Stock Frenzy

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES