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US stock indices edge higher. USD slides, EUR gains in value

Relevance up to 02:00 2021-10-20 UTC–4

S&P 500

The US stock market kicked off the trading week with further gains.

On Monday, major US indices edged higher, except for the Dow Jones Industrial Average. Thus, the Dow Jones Industrial Average slid by 0.1%, the NASDAQ added 0.8%, while S&P 500 advanced by 0.3%.

US President Joe Biden’s administration on Wednesday urged OPEC and its allies to boost oil output to tackle rising gasoline prices that threaten the growth of the global economy. Brent crude is trading around multi-year highs, just below $85, at 84.50. WTI crude oil is trading above $82.

Yesterday, on the European ICE stock exchange, gas prices in Europe fell by 5% but remained above $1,000, at the level of $1,067.

Covid-19 in the world. On the first working day of the week, the number of new cases increased by 345 K. The US reported a decrease as compared to the previous week, +53 K new cases, while Britain reported an increase of 49 K new infections.

S&P 500: 4,486. Trading range: 4,450-4,510.

The largest financial institutions in the United States continue to report better-than-expected third-quarter financial results. Profit at Goldman Sachs Bank surged by 63% to $5.28 billion in the third quarter compared to last year, and its revenue climbed by 26% to $13.61 billion. Morgan Stanley, a major investment company, said that its third-quarter profit rose by 36% to $3.7 billion, while revenue increased by 26% to $14.8 billion. The Wall Street giants made great money on the strong US economic recovery from the coronavirus crisis as well as on the Fed’s stimulus measures.

US industrial production fell by 1.3% in September, while economists predicted an increase of 0.2%. This indicates a slowdown in manufacturing activity. Capacity utilization for the entire industrial sector fell 1% in September to 75.2%.

Today’s macroeconomic calendar includes reports on US housing starts. On Wednesday, the Fed’s “Beige Book” report will be in the focus of market participants.

USDX: 93.60. Trading range: 93.30-93.90. On Tuesday, the US dollar fell to the levels of late September. The euro advanced to 1.1650 against the dollar. If the euro continues to trade at these levels until Tuesday’s close, this would mean that the pair is ready to reverse upwards and gain bullish momentum. Market participants are awaiting the upcoming Fed meeting in early November in order to receive some clues about the future of the regulator’s monetary policy.

USD/CAD: 1.2335. Trading range: 1.2280-1.2360. The pair continues to trade under downward pressure from rising oil prices. The quotes are likely to extend weakness, falling to 1.2240 and even lower.

Conclusion. The US stock market is expected to extend gains until strong negative factors limit its bullish run.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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