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Market Overview

The American regulator will not be in a rush to raise rates. This message pleased the stock market participants and contributed to the growth of quotations. Now the S&P500 is 18% above its December minimum and 5% lower than the historical maximum reached in September last year. The world prices rose for oil and metals contributed to an increase in the industry S&P materials index by 1.7%. An additional positive impact on the market was the announcement by US President Donald Trump that he would impose duties on European cars if he could not negotiate with the European Union on reducing the deficit in mutual trade. The ICE US Dollar Index has gained since the Fed reserve has highlighted the stability of the American labor market and the economy as a whole in its January materials. Today at 14:30 CET the data on orders for durable goods, weekly unemployment, three Markit indexes and data on sales of secondary real estate will be published in the United States.

Dow quotations increased due to the good reporting of the largest retailer Walmart (+ 2.2%), which announced sales growth for the 18th consecutive quarter. Nasdaq and S&P500 gained due to the growth of Amazon shares by 1.2%. The Chinese division of this American online store is going to purchase a large Kaola shopping site in the PRC. The ICE US Dollar Index significantly decreased after the announcement by John Williams, the head of the Federal Reserve Bank of New York. He said the Fed rate increase is possible only in the event of an unexpected acceleration in the growth of the American economy or inflation. Today at 20:00 CET materials of the January Fed meeting will be published in the United States.

The ICE US Dollar index almost did not change. Now futures on US stock indexes are being traded with a slight decrease. Significant macroeconomic statistics is not expected to be published in the United States today.

The Dow Jones industrial average and Nasdaq rose for the 8th consecutive week. This week, the US-China trade negotiations will continue in Washington. Previously, they were held in Beijing. White House press secretary Sarah Sanders said that there was certain progress in bilateral negotiations. It is assumed that mutual claims will be settled before March 1, when the US planned to increase duties on Chinese goods worth $200 billion a year. Of course, this would have caused China’s backlash. Now, the likelihood of the trade conflict escalation has noticeably decreased. Due to this, stocks of US companies which are sensitive to tariff increases and a large share of exports to China demonstrated a noticeable growth: Boeing, United Technologies, Caterpillar and 3M. 80% of companies from the S&P 500 list have already reported their earnings for the 4th quarter of 2018. Investors expect a quarterly increase in total profit of US companies by 16.2%. The forecast of the decrease in total profit in the 1st quarter of the current year deteriorated to minus 0.5%. The ICE Dollar index fell slightly on Friday after Mary Daly, the president of the Federal Reserve Bank of San Francisco, said that the Fed would not likely raise the rate in 2019. Today, most American markets do not work due to the holiday - Presidents Day.

Retail sales in the US for December 2018 decreased by 1.2% compared with November. This is their maximum fall in the last 9 years. Negative has been added by a decline in the producer price index in January and the increase of unemployment over the week. A number of investors have a fear that such statistics indicate a slowdown in the growth of the American economy. Coca-Cola and American International Group (AIG) reporting for the 4th quarter of 2018 was released yesterday. It turned out to be weak, which caused a drop in shares of the manufacturer of soft drinks and the insurance company by 7.6%. Market participants lowered their growth forecast for the companies of S&P 500 index to 16.2% in the 4th quarter. Today at 16:00 CET consumer confidence indicator from the University of Michigan will be published in the United States. Yesterday The ICE US Dollar index slightly decreased , as weak macroeconomic statistics reduces the likelihood of a Fed rate hike.

US Treasury Secretary Stephen Mnuchin said he was pleased with the trade negotiations. Inflation in the United States in January was 1.6% in annual terms, which is the minimum increase since June 2017. Core inflation remained at 2.2% year to year for the third consecutive month. Such stability eliminates the likelihood of a Fed rate hike at the next meeting on March 20. Nevertheless the ICE US Dollar Index gained on Wednesday and updated the 3-month high. Investors believe that the Chinese authorities may make some concessions in a trade dispute with the United States. The reporting season of US companies for the 4th quarter of 2018 is close to the end. Market participants believe that the total profit of S&P 500 now it will gain 16.6%, but will decrease by 0.3% in the first quarter of 2019. It limits the potential growth of quotations. Yesterday, after the end of trading, a positive quarterly report was published by the computer company Cisco Systems Inc., so futures on US stock indexes predictably will growth during today's opening. Today at 14:30 CET the weekly data on the labor market will be announced in USA based on producer prices for January and retail sales for December.

The decline of ICE US dollar Index occurred on the backdrop of reducing global risks. US President Donald Trump announced that he could slightly move the deadline for increasing import duties on Chinese goods. Now it is planned on March 1. US stocks quotations rose on Tuesday due to the fact that the US Congress approved the preliminary state budget for the new fiscal year. This will avoid another suspension of government work. Additional positive aspect is corporate news announcement. Amazon.com shares rose 2.6% due to local success in competition with Walmart. Positive news were published by Electronic Arts (+ 4.5%) and Goldman Sachs (+ 2%). Sportswear manufacturer Under Armor has posted good quarterly reports. Today in the US at 14-30 CET, there are data on inflation for January.

On Monday, there was no single trend in the US stock market. Indices S&P 500 and Nasdaq 100 slightly increased, whereas Dow Jones Industrial Average lost 0.2 %. Investors' attention is still focused on the upcoming US-China trade negotiations, that will be held February 13-14. Earlier, US President Donald Trump announced that if negotiations end up with failure, from March 1, 2019 import duties of 10% to 25% on the import of Chinese goods worth $ 200 billion a year will be increased. Surely this will cause reciprocal measures by the Chinese authorities and will intensify of global trade wars. The stock market is supported by good corporate data. Currently two thirds of S&P 500 companies have already reported for the 4th quarter of 2018, of which more than 230 companies have exceeded profit forecasts. Now investors expect that quarterly profit growth will be an impressive 16.5%. At the same time in the 1st quarter of 2019, the total profit may be reduced by 1%. Against the backdrop of increasing global risks, the ICE US Dollar Index continued to increase for the 6th consecutive day and updated the maximum in 2019. Today it is not expected to publish significant macroeconomic indicators in the United States. Futures on US stock index indicate a higher opening.

On Friday, quotations of US stocks slightly dropped . Index S&P 500 fell for the 3rd time in a row amid difficult US-China trade negotiations. Ther was not significant macroeconomic data in the United States.At the end of last week, US President Donald Trump's statement that he is not going to meet China’s President Xi Jinping before the deadline for signing the trade agreement - March 1, 2019 brought a negative wave. In turn, market participants consider as a positive factor the United States Trade Representative Robert Lighthayzer's and US Treasury Secretary Stephen Mnuchin's visit to China held on February 14-15 . In the longer term, US stock quotations may be negatively affected by very weak forecasts of S & P 500’s total profit for the first quarter of this year. For the first time since 2016, quarterly earnings are expected to decline by 0.1% year by year. Regarding the forecasts of the profits of the S & P 500 companies for the whole 2019, it is expected to increase only by 4.3%. At the same time, since the beginning of the year, this index has already grown by 8%. Today it is not expected to publish significant macroeconomic indicators in the United States. The ICE US dollar index rose the 5th day in a row on Friday and updated the 6-week maximum. Investors consider dollar assets as "defensive" against the backdrop of trade wars. US stock index futures indicate a higher open today.

US stock market extended losses on Thursday as global growth slowing concerns came to fore again after National Economic Council Director Larry Kudlow’s comment US and China’s position are on “pretty sizable distance” in trade talks. The S&P 500 lost 0.9% to 2706.05. The Dow Jones industrial average slid 0.9% to 25169.53. Nasdaq composite index fell 1.2% to 7288.35. The dollar strengthening slowed as initial jobless claims fell last week to near historical low: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 96.53 and is higher currently. Futures on US stock indexes point to lower openings today.

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