Wall Street edges higher, Trump targets social media companies

Summary:
- Donald Trump continues to criticize Powell
- Nasdaq (US100) bounces off the 23.6% Fibo level
- Alphabet (GOOGL.US) remains under pressure after failing to break above the 200SMA

Comments from the US Treasury Secretary, Steven Mnuchin, saying that the US-China trade deal is 90% complete lifted global equities in the first half of the European session. Nevertheless, the optimism faded a bit later on when Donald Trump addressed US-China situation and once again “attacked” the Federal Reserve Chairman, Jerome Powell.

Nasdaq (US100) took a major dive yesterday along with the other US indices. Note that the pullback was halted at 23.6% Fibo level of the recent downward move. The index tries to recoup some of the recent losses today and is the strongest one of the three major Wall Street indices.  Long, lower wick of the previous H4 candlestick (orange circle) hints that bulls are trying their best to keep the price above the 33EMA (green line). In case upbeat moods prevail, buyers may aim for the recent highs around 7800 pts handle. Source: xStation5

The US President, Donald Trump, took an opportunity during today’s telephone interview with Fox Business to once again attack Powell. Trump said that the chief of the US central bank should have never raised interest rates and that he only tries to show “how tough he is” by refusing to cut them. The US President said that Powell is not doing a good job and that he has the right to either demote or fire him. Nevertheless, he did not say that he would. Comments came a day after Jerome Powell praised independence of other major central banks. According to Trump, Fed has to lower rates in order to allow the US to compete with China. Speaking of China, Trump said that in case no progress is made following his meeting with the Chinese President, Xi Jinping, he will levy new tariffs on the Chinese goods. Trump and Xi are set to meet on Saturday during the G20 summit in Osaka therefore one could expect significant market reaction at the beginning of the following week. Meanwhile, US equities trimmed part of pre-session gains on the back of Trump’s comments.

S&P 500 (US500) movers at 2:55 pm BST. Source: Bloomberg

During the very same interview, Donald Trump said that the US may consider suing Google (GOOGL.US) and Facebook (FB.US). According to Trump, social media companies are run by Democrats and are discriminating the conservatives. However, he did not specify on what grounds could the country sue the two firms. Apart from that, Trump also took shots at Twitter saying that the company is making it hard for people to follow his profile. Given that Donald Trump’s profile is the 12th most followed one on Twitter, the accusation does not seem perfectly justified. However, Trump may find it uncomfortable that the only politician with more followers is his predecessor - Barack Obama. Three companies trimmed part of the pre-session gains on the back of those comments but Twitter and Facebook still manage to hold above yesterday’s closing prices.

Alphabet (GOOGL.US) tested the support zone ranging around $1000 a few times during the past 2 years and after each test it managed to print a new ATH some time later. However, the latest bounce off the $1030 handle was halted by the 200-session moving average (purple line) and the stock once again turned lower threatening to end the recovery. Source: xStation5

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