US stocks pull back as Trump calls for further gains

Summary:

  • US indices trading in the red ahead of cash open
  • US-China trade talks set to resume
  • Trump tweet takes credit for recovery and predicts further gains

Stock markets across the Atlantic will open for the first time this week in just under half an hour, as the US return from a bank holiday weekend. The bulls were firmly in charge of the tape on Friday’s close with the benchmarks pushing up to their highest level since early December, but there has been a little bit of weakness ahead of the opening bell today. The larger declines are seen in the Tech -heavy US100, which is lower by around 1% on the day.

All US indices are trading in the red ahead of the cash open, with the US100 the biggest faller. The Volatility index has perked up to trade higher by over 1.5%. Source: xStation

The push higher in the markets seen for much of this year is due in no small part from a seeming thawing of the frosty US-Sino relationship on trade and the world’s two largest economies have resumed talks on this front this afternoon. Negotiators from both sides will meet in Washington this week with President Trump’s team striving to iron out a deal that avoids the hiking of tariffs on 1st March. Trump has taken to Twitter in the past couple of hours to laud the recovery in stocks, taking credit for the market not being significantly lower. The President also predicted further gains going forward – which some may cynically believe is a contrarian signal that these gains won't occur!

The US President has taken to Twitter to take a pot shot at the Democrats while also predicting further gains for the stock market. Source: xStation

The US100 has lagged the US30 a little of late, and today you can see this underperformance once more. The US100 has also exhibited slightly less strong price action in that it didn’t end last week right on it’s highs and there is a suggestion that the relative weakness supports watching this market closely for a pullback in the recent rally. Highs around 7100 present a potential resistance level to keep an eye on while 6840 remains potential support.

The US100 has lagged the US30 in recent trade and the former may be worth watching closely for any further signs of weakness which could then spread to the latter. Source: xStation

 

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