By Chris Becker
Overnight markets were effectively sidelined by traders waiting for Fed Chairman Powell’s testimony with European stocks retreating while US stocks put in some minor gains, led by tech issues on the NASDAQ. Interest rates nudged higher with the 10 year Treasury up to 2.07% as the chance of a rate cut from the Fed in July dropped slightly again, while the USD remained strong against the undollars.
Looking at the action in Asia yesterday, where the Shanghai Composite continued its recent poor showing, with a small afternoon rally filling a gap to close only 0.2% lower at 2928 points. The Hang Seng Index however followed through and fell nearly 0.7% lower to 28116 points, remaining well below the previous set of highs at 28500 and now in full dip mode below the low moving average. As I said yesterday the 28000 point level which must be supported for this temporary stall in the bounceback rally to continue or a full retracement back below 27000 points is probable:
