Financial market research and analysis

Wild trading in Amazon shares and other tech stocks on Wall Street is spreading to Europe.  It remains a very sentiment driven market.  Europe is playing catch up to Wall Street where markets were open on Easter Monday.

Even if the president Trump succeeds in increasing taxes or raising shipping costs for Amazon, that should have no direct bearing on international companies.  Because Amazon has been one of the U.S. market leaders, the decline in its share price has investors scrambling replacements.

The breach of some key technical levels in US markets are a source of concern. The S&P 500 fell below its 200-day moving average for the first time since 2016. Major benchmarks in Europe are already below their respective 200 DMAs.

Concern that the U.S. and China are on the cusp of a trade war just will not go away. On Monday China announced that it has implemented afforementioned tariffs on 128 types of US goods.  Implementing the tariffs makes China’s response to Trump’s steel and aluminum tariffs official.  China has to show it is serious. We still expect a settlement in trade negotiations between the two nations. Sentiment will be fragile until the result of trade negotiations become clear.

Adding to trade war worries, Trump linked the need for a border wall with Mexico to ongoing NAFTA trade re-negotiations. Gold, the dollar and the Japanese yen benefited from haven flows on Monday but are retracing some of those moves on Tuesday.

On Tuesday, manufacturing PMIs will be released across Europe and the UK. Most readings are expected to remain in line with earlier estimates. Manufacturing activity in Europe has come off the boil slightly but remains elevated in comparison to recent years.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. Losses can exceed deposits.