US stocks hit 2019 highs; Bitcoin surges double-digits

Summary:

  • S&P500 rallies up to YTD peak; US30 still a laggard

  • Stock of the week Cintas

  • UK stocks hit 6-month highs

  • British pound moves lower as Brexit impasse drags on

  • Bitcoin enjoys double-digit rally

 

Bulls are firmly back in control of the tape as far as US stock markets are concerned, with further gains seen this morning with the US500 hitting its  highest levels of the year. The US30 has been a bit of a laggard in the past month or so (ever since Boeing’s shares plunged) but is still holding up pretty well and not far from its 2019 peak. On the data front the main release this afternoon has shown a less severe drop than expected in consumer spending with durable goods orders for February coming in at -1.6% vs -1.8%.

 

Release of the NFP report for March is looming large and data will be watched closely by investors from all around the world. Tight labour market can be seen as a hurdle for many companies as it makes hiring new employees harder and more costly. However, there is one stock that is especially interested in seeing high US employment - Cintas. In this analysis we will take a look at the company's business, latest earnings report and analyze dividend safety. Cintas (CTAS.US) stock experienced some heavy declines in the final quarter of 2019 when S&P 500 (US500) plummeted. Nevertheless, just like the US index the stock had a stellar beginning of the year and is trading 33% higher YTD. The stock has been moving higher as of late following a bounce off the 200-session moving average. Source: xStation5

 

The FTSE has edge higher today, moving above the recent peak to trade above 7400 and at levels not seen since last October. The gains come as risk assets have made a bright start to the week,  with equities around the globe and crude oil rallying after better than expected manufacturing data from both China and the US. Figures from the Eurozone further supported the recent slowdown for the bloc, but in aggregate it seems that investors are looking through the negatives to focus on the positives and while this remains the case further upside could lie ahead.

 

The UK Parliament does not know what it wants in terms of Brexit and after rejecting eight alternatives to the May’s withdrawal deal last week, it did so again on Monday by rejecting subsequent four alternative options. At the same time, the Parliament is opposed to the agreement Theresa May has hammered out with the European Union. As a result, a hard Brexit scenario seems to be more likely unless London asks for another deadline extension and Brussels agrees on it. Technically the GBPUSD seems to be in a good position to bounce from the current level. The critical line for bulls is set around 1.2990, in turn buyers could eye 1.33 as their possible target.

 

Tuesday begins with a huge spike in Bitcoin price. Bitcoin has been gaining slowly for a while but today it has literally skyrocketed by 13% (it was 17% at one point) to reach $4600 – a level not seen since November 2018. A lowered volatility made it easier for bulls to catch sellers off guard and initiate the move that could potentially start something bigger. At this point traders should keep an eye on $5190 – a 61.8% Fibo retracement of a big slump from late last year.

 

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