Uncertainty in the EU, Rattles US Stock Market

Uncertainty in the EU, Rattles US Stock Market

Uncertainty in the EU, Rattles US Stock Market

$DIA, SPY, $QQQ, $VXX

  • Simply put, Italy has fallen out of love with the Euro!
The DJIA and S&P 500 posted their biggest 1-day percentage decliners in a month Tuesday as political and financial turmoil in Italy triggered concerns about the stability of the Eurozone, shares of US banks declined.

Italy has been unable to assemble a coalition government since inconclusive elections in March, which saw the rise of anti-establishment parties that support leaving the single currency bloc. The most recent nominee for PM failed to secure support from the country’s major political parties.

Political worries after Italy’s President blocked formation of euro-skeptic government, the action may prompt a de facto referendum vote on Italy’s membership in the EU.

Simply put, Italy has fallen out of love with the Euro!

The political crisis in Rome, and the threat to the fragile Euro project it represents, triggered a rush to traditional safe havens like US debt, pulling down US 10-yr T-Note yield and in turn spurring losses for US banks.

US Treasuries Yield Check

  • 2-yr: -16 bpts to 2.32%
  • 5-yr: -18 bpts to 2.58%
  • 10-yr: -16 bpts to 2.77%
  • 30-yr: -12 bpts to 2.97%

Shares of S&P 500 banks registered their biggest 1-day decliner in more than 2 months, ending 4%+ lower.

There is little connection between the Italian government and the S&P 500, but it reminds people of geo-political uncertainty, especially in the Eurozone.

Tuesday, the major US stock market indexes finished at: DJIA -391.64 at 24361.45, NAS Comp  -37.26 at 7396.59, S&P 500 -31.47 at 2689.86

Volume: Trade on the NYSE came in at 942-M/shares exchanged.

Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio, NAS Comp, a 1.63-to-1 ratio favored decliners.

  • NAS Comp +7.1% YTD
  • Russell 2000 +5.7% YTD
  • S&P 500 +0.6% YTD
  • DJIA -1.5% YTD

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
29 May 2018 QQQ 168.15 Neutral (0.08) 165.44 168.92
29 May 2018 DIA 247.37 Neutral (0.11) 244.69 247.59
28 May 2018 SPY 272.15 Neutral (0.15) 270.27 274.41

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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