Another large gap lower seen over the weekend
Markets recover after additional tariffs levied
Stock markets closed due to Labour day celebrations
For the second week running there was a large gap lower seen on Sunday evening when US stock futures resumed trading after the weekend break. However, the gap has already been filled at the time of writing and once more it seems that buying the weekly open would’ve worked out nicely. The gap was possibly caused by a series of factors with more unrest in Hong Kong, Hurricane Dorian expected to be worse than initially thought and the application of further tariffs all negative events that happened since Friday’s close.
The most likely negative impact came from tariffs with hopes of a last minute aversion misplaced and for all the positive rhetoric in recent weeks, the actions are speaking louder than words. The fresh US tariffs which came into effect yesterday cover $112B of Chinese imports on items such as nappies, shoes and food are likely to have a bigger impact on the consumer than previous attempts, due to the composition of the products targeted.
The latest additional tariffs are the last in a long line of levies issued both by the US and China on the other party. Source: BBC research
The US are on holiday today, celebrating labour day with both the NYSE and NASDAQ closed. The CME is running on shortened hours and as such all US indices will cease trading for the day at 6PM (BST).
S&P futures gapped lower for the second week in a row when they re-opened last night. The market wasted little time in closing the gap to 2933 but the big picture remains one of consolidation with the 2946 level still providing resistance for now. Source: xStation