U.S. indices lag Europe as intel hearing and trade news keep the pressure on
U.S. stock market participants are probably paying attention to the live testimony of Jospeh Maguire to Congress. He’s the Director of National Intelligence and is being grilled by a congressional committee about allegations of a whistle-blower relating to a conversation between U.S. President Donald Trump and the president of Ukraine. It’s riveting stuff to be sure. But he is playing it straight down the line. He’s neither responding to Republican plaudits for being impartial, or Democrat insinuations that his expressed determination to protect Presidential privilege could be shielding disclosure of misconduct.
As such, U.S. stock markets look to have reacted more to fresh, though vague, developments on the trade front. Headlines, quoting a State Department spokesman, suggesting the U.S. is unlikely to extend a temporary waiver for U.S. suppliers of Huawei, is hitting technology stocks. Specifically that means, chip shares and the like, with specialist processor maker NVIDIA, hardest hit. We should also expect some stock market aversion from a hit to copper, which has also reacted negatively.
The State Department also signalled that it will push on with a re-think of intelligence sharing with U.S. allies who aren’t inclined to stop using Huawei. So close to October trade talks with China, the latest commentary tends to place a dampener on their scope. It may be no coincidence that Thursday’s news follows the emergence on Wednesday of person-specific sanctions on certain Chinese officials.
Assuming the graphics chip maker is particularly sensitive to trade-related developments that could significantly impact its business there, let’s take a glance at its chart. The zoomed-out view shows a bullish trend that can be backed linearly since February 2016, remains intact. Less positively, NVDA has now been capped since last October by overhead resistance; in fact a gently sloping uptrend. It’s complemented by the longer-term rising line mentioned above to create a channel. Upside impediments also include the strong appearance of resistance in the $193 region, which has seen bounces from above and below since November. As the stock drifts down following its latest impact with the ambivalent overhead line, a visit to the lower bound of the channel looks to have decent odds. Progress beyond the structure requires a break higher or lower first.
NVIDIA Corp CFD – Daily [26/09/2019 16:59:42]
Source: City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.