NASDAQ Composite (.IXIC) yields drop with focus on growth, central banks
A gauge of world stocks fell on Wednesday amid new signs of concern for the global economy, while benchmark U.S. Treasury yields sank to fresh 15-month lows and German bond yields fell further below zero.
China’s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed.
Meanwhile, European Central Bank President Mario Draghi said the ECB could further delay an interest rate hike and may look at measures to mitigate the side-effects of negative interest rates, warning that risks to growth were on the rise.
“You are just not seeing the strength in the economies and that’s why you have this negative interest rate scenario,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates in Toledo, Ohio.
“It just compounds the problem of what people were thinking going into March that a lot of these global economies are slowing,” Lancz said.
Markets have been rattled since Friday, when the 3-month U.S. Treasury yield exceeded the yield on the 10-year note, an inversion of the yield curve that is widely seen as an indicator of a recession.
On Wednesday, Wall Street’s main indexes slumped anew.
The Dow Jones Industrial Average fell 144.89 points, or 0.56 percent, to 25,512.84, the S&P 500 lost 21.21 points, or 0.75 percent, to 2,797.25 and the Nasdaq Composite dropped 76.50 points, or 0.99 percent, to 7,615.03.
The pan-European STOXX 600 index rose 0.02 percent. The euro zone bank stocks index gained 1.9 percent after Reuters reported the ECB was studying options to lower the charge banks pay on some of their excess cash as a possible way to offset the side-effects of its ultra-easy policy.
However, MSCI’s gauge of stocks across the globe shed 0.54 percent.
Turkey’s main share index dropped 5.7 percent, as foreign investors in need of lira flocked to sell stocks and bonds, analysts said.
Benchmark 10-year Treasury yields slid as investors remained focused on central bank dovishness globally.
Benchmark 10-year notes last rose 10/32 in price to yield 2.3788 percent, from 2.412 percent late on Tuesday.
Germany’s long-dated borrowing costs hit 2-1/2-year lows below zero percent.
The New Zealand dollar was on pace for its worst fall in seven weeks against its U.S. counterpart, as the country’s central bank unexpectedly said its next move in interest rates was more likely to be a cut, abandoning its neutral stance at a policy review.
“RBNZ follows the Fed into dovish territory and its becoming increasingly clear that there are few central banks that want to be caught on the wrong side of the Fed,” Brad Bechtel, global head of FX at Jefferies, said in a note.
The dollar index, which measures the U.S. dollar against a basket of currencies, rose 0.09 percent, with the euro down 0.04 percent to $1.126.
Oil prices sank after government data showed U.S. crude stocks unexpectedly rose last week as exports slowed due to a chemical spill along at the nation’s busiest energy port.
U.S. crude fell 1.1 percent to $59.28 per barrel and Brent was last at $67.78, down 0.28 percent on the day.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 7,422.43.
The projected upper bound is: 7,859.72.
The projected lower bound is: 7,456.53.
The projected closing price is: 7,658.13.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.8711. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 55.09. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 3 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -3. This is not a topping or bottoming area. The last signal was a sell 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -48.145 at 7,643.377. Volume was 9% below average (neutral) and Bollinger Bands were 40% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 7,694.09 7,423.06 7,489.96
Volatility: 19 17 25
Volume: 667,343,488 590,189,824 582,030,592
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NASDAQ COMPOSITE is currently 2.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 53 periods.