YTD highs for US stocks; GE soars

Summary:

  • US benchmarks rally to 2019 peak

  • Latest gains driven by trade hopes

  • GE shares soar on deal to sell biopharma business

 

News over the weekend that the US will delay increasing tariffs on $200B of Chinese imports has provided more fuel to the rally seen in US stocks, with all 4 benchmarks on xStation hitting their highest level of the year this afternoon. As is often the case, the US100 is the best performing and higher by 0.84% at the time of writing.

There’s a sea of green amongst US indices this afternoon with the US100 the best performer and adding over 0.8% to trade back above 7150. Source: xStation

 

The US100 has moved up to its highest level since early November today with price attempting to break out above previous resistance around the 7100 level. Quite surprisingly given the strong gains in recent weeks, the RSI is still not in overbought territory - as defined by above the 70 mark. There could be some resistance overhead around the 7210 mark which has previously acted as something of a swing level, but for the time being the uptrend that began at the back end of 2018 remains firmly intact.

Despite the strong gains the US100 is still short of overbought territory according to the RSI on D1, which at 68.3 is still beneath the 70 mark. Source: xStation  

 

Looking at individual shares in the US, General Electric (GE) is enjoying a strong push higher after the firm announced a deal to sell its biopharma business. Danaher Group are reportedly paying $21 billion for the business and will also assume certain pension liabilities. Wall Street analysts covering GE said the deal should help alleviate much of the liquidity concerns around the company and the market reaction has been clearly positive with the stock jumping over 10% on the open and trading higher by almost 9% at the time of writing.

GE shares have jumped higher on the news, but the longer-term downtrend remains in tact for now with price still not even at the 23.6% fib at 12.93 of the larger declines seen in recent years. Source: xStation

 

 

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