Technical analyst Helene Meisler notes numerous chart indicators which suggest the market is heavily overbought. This could lead to a rise in volatility in the coming days although, Meisler acknowledges "it is always possible we digest the overbought reading and work off the too hot sentiment."
This week's second-quarter earnings reports from JPMorgan Chase, Wells Fargo and Citigroup all show increased profits propelled by a surge in consumer borrowings and credit-card spending, while revenues from trading and deals contracted. The figures appear to reveal economic confidence is higher among consumers than institutional investors.
With the S&P 500 hovering around the 3,000 landmark, technical analyst Ron William says significant moves upward or downward are equally conceivable. A near-term rise to 3,200 is possible but a fall below 3,000 could take the index toward support around 2,770/2,730, with further reversion to the 2018 low of 2,351 being the worst possible scenario.
Starbucks has made steady gains in the past 12 months with its stock rising from around $50 to $90. Technical analyst Bruce Kamich, CMT, writes that chart indicators are mostly positive but the price looks extended and, while he sees no likelihood of a steep reversal, investors should exercise caution by raising their stop-sell protection.
Heath Tarbert has been sworn in as chairman of the Commodity Futures Trading Commission. Tarbert has praised predecessor J. Christopher Giancarlo and says he will work "to ensure our derivatives markets remain vibrant." Tarbert's term will run until April 13, 2024.
US senators from both sides of the aisle have expressed doubt about Facebook's proposal to launch cryptocurrency libra, raising questions over the merits and safety of the initiative. "We'd be crazy to give them a chance to let them experiment with people's bank accounts," Sen. Sherrod Brown says.
The European Central Bank is recommending that market participants avoid entering into new contracts referencing the euro overnight index average rate "whenever feasible and appropriate." The ECB's working group noted that for existing Eonia contracts and those maturing after December 2021, "market participants should consider replacing Eonia as a primary rate as soon as possible or embed robust fallback clauses."
The Basel Committee on Banking Supervision and the International Organization of Securities Commissions are expected to delay for one year the final phase of the initial margin rules for non-cleared derivatives that is due to take effect in Sept. 2020, sources say. The announcement reportedly will come within days.
Former Commodity Futures Trading Commission chairman Gary Gensler told the House Financial Services Committee that Facebook's proposed digital coin libra "is a pooled investment vehicle that should at a minimum, be regulated by the Securities and Exchange Commission" and possibly be classified as a security. Meanwhile, SEC Chairman Jay Clayton says he has not yet personally discussed the project with Facebook, though he is "keenly interested in their securities law analysis."