Can Anything Stop The U.S. Indices?
Shain Vernier • 2 min read
Over the past month, the news cycle facing the U.S. has been challenging to say the least. The devastating hurricane season, tensions with North Korea, and Sunday’s mass shooting in Las Vegas have brought unforeseen stimuli to the markets.
From every fundamental standpoint, shouldn’t U.S. equities at least ponder correction?
Can Anything Stop U.S. Equities?
News items have had zero impact on stymying these markets. No matter the item, the S&P 500 and DJIA keep chugging higher. Today marked significant historical levels for both the E-mini S&P futures and E-mini Dow futures.
December E-Mini S&P 500 Futures, Daily Chart
E-mini S&P 500 futures have made fresh all-time highs again today, extending Monday’s gains. Just a brief look at the daily chart illustrates the bull run beginning on August 31.
Much of the same from the December E-mini Dow contract. A definitive break above September’s high, and a fresh all-time high water mark.
December E-Mini Dow Futures, Daily Chart
So, the big question is, why are U.S. equities so strong? The U.S. Federal Reserve’s decision to hold interest rates static last month coupled with positive GDP growth have certainly helped the big picture.
Personally, I see the coming debate over the Trump administration’s tax proposal as being the reason for the current bull run in pricing. One of the key tenets of the plan is a severe reduction in the U.S. corporate tax rate. In the event that it is passed this Fall/Winter, continued strength in equities is a given.
Overview: Markets that move give us trading opportunities. Whether in a trend-following or counter-trend capacity, a plan may be crafted to harvest a few pips from these markets. Stay tuned to FX Leaders for ideas on how to profitably engage a wide variety of asset classes including the U.S. indices.
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