With earnings season winding down and corporate news flow drying up, we find ourselves at the cusp of the historically seasonally weakest and most volatile time of the year for markets, running through to mid-October. The bull market that had been underway since the US election in November has finally started to show major cracks and near term tops may now be in place.
This week may give a better indication of whether the next couple of months could see a deep correction of 5-10% in the markets or if they could spend the time grinding their way sideways. North Korea provided the initial flashpoint for a correction, but there are a lot of other risks out there that could impact markets in the coming months.
This week in the US, earnings reports are dominated by major retailers. So far the reaction to department store results has been negative as Macy’s was pounded down 10%. On the other hand, Canadian Tire did well and rallied on its report which suggests traders may look at retailers on a sector by sector or case by case basis. Wal-Mart and Home Depot are the headliners. Results from the online divisions of big retailers could impact sentiment toward Amazon as well.
For Canada, the main focus of the week is on the start of NAFTA renegotiations. Opening stances may indicate how far apart the sides are on major issues and how easy or difficult it may be to reach a deal. Around the start of talks, President Trump could ramp up the rhetoric on Twitter related to trade. NAFTA talks could have a big impact on trading in CAD this week.
Economic/Political news (North America time):
Sunday evening Japan GDP
China retail sales, industrial production
NZ service PMI
Canada Freeland speaking on NAFTA
US retail sales, Empire manufacturing
Canada existing home sales
NAFTA renegotiations start for US, Canada, Mexico
US energy inventories, housing starts, FOMC minutes
US Philly Fed, industrial production, leading index
UK retail sales
US consumer sentiment
CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Canada Inc. is a member of the Investment Industry Regulatory Organization of Canada and Member-Canadian Investor Protection Fund / Membre-Fonds canadien de protection des épargnants. CFDs are distributed in Canada by CMC Markets Canada Inc. dealer and agent of CMC Markets UK plc. Trading CFDs and FX involves a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. CMC Markets is an execution only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities.
and FX trading with CMC Markets is only available in jurisdictions in which CMC is registered or exempt from registration, and in Alberta is available to Accredited Investors only. CMC Markets neither solicits nor accepts business or accounts from residents of the United States of America.
CMC Markets er en ‘execution-only service’ leverandør. Dette materialet (uansett om det uttaler seg om meninger eller ikke) er kun til generell informasjon, og tar ikke hensyn til dine personlige forhold eller mål. Ingenting i dette materialet er (eller bør anses å være) økonomiske, investeringer eller andre råd som avhengighet bør plasseres på. Ingen mening gitt i materialet utgjør en anbefaling fra CMC Markets eller forfatteren om at en bestemt investering, sikkerhet, transaksjon eller investeringsstrategi. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser. Selv om vi ikke uttrykkelig er forhindret fra å opptre før vi har gitt dette innholdet, prøver vi ikke å dra nytte av det før det blir formidlet.