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Volatility Soars As Trade Dispute Hopes Emerge

By Axi (James Hughes)Stock MarketsDec 12, 2018 11:16
uk.investing.com/analysis/volatility-soars-as-trade-dispute-hopes-emerge-200205173
Volatility Soars As Trade Dispute Hopes Emerge
By Axi (James Hughes)   |  Dec 12, 2018 11:16
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The Dow traded in a 500 point range through yesterday’s session and the turbulence looks set to continue, with index futures suggesting we’ll see some meaningful gains at the opening bell.

Optimism is coming from two directions, with hopes that a trade deal can be struck between the US and China driving sentiment, whilst anticipation that the Federal Reserve may elect not to hike interest rates next week is also lending support. We could see a key test of the second point shortly before the opening bell, with the release of November’s US CPI reading. Expectations are for a meaningful decline to be posted here, but failure to deliver would likely raise questions as to whether the Fed can afford to adopt a dovish stance so quickly.

The US monthly budget statement for November is also slated for publication today and this is tipped to show some significant expansion of the deficit. With the dollar so strong, this is unlikely to be much cause for concern although Donald Trump’s economics have clearly taken something of a gamble. Today’s inflation reading really does need to land in that goldilocks zone of being neither too hot nor too cold. A dramatic slowdown would risk the economy as a whole not bringing in the promised tax revenues to start paying back the recent subsidies.

Ahead of the open we’re calling the Dow up 248 at 24618 and the S&P 500 up 26 at 2663.

Volatility Soars As Trade Dispute Hopes Emerge
 

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Volatility Soars As Trade Dispute Hopes Emerge

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