Binary Options Trading Recommendation for this week – Market Information and Trading Briefing
Stock markets saw some interesting activity last week as prices started under heavy selling pressure early on before seeing a strong upside reversal into the close. The negative hangover from last week’s poor US Non Farm Payrolls figures guided trading at the open on Monday and the disappointing economic data continued as China posted its weakest GDP figures in 3 years. Quarterly GDP rose at 7.6, which was a large drop from the 8.1 percent growth that was seen during the previous quarter and slightly below the market estimates of 7.7 percent. This Chinese data also showed weakness in Industrial Production so the initial reaction was further downside on global stock values.
The losses didn’t last long, however, as this poor data led to market speculation that the People’s Bank of China (PBoC) will be forced to stimulate the economy by lowering interest rates. This came in part because this was the method the PBoC chose at its previous monetary policy meeting, and this helped to propel markets higher. The upside momentum helped US stocks to beak a six day losing streak and the gains made on Friday (in all three major indexes) were the largest since June 29th. On a weekly basis, however, the gains were not as strong, with each index seeing only a mode rise.
Stimulus Arguments Aided by Strong Corporate Earnings
With markets expecting additional interest rate decreases from several major central banks, stocks are likely to some some supportive footing in the coming months. But more immediately, market focus remains on corporate earnings results, as we are still in the early phases of the reporting season. So far, the profits seen have been relatively strong and the main story last week came from the banking sector, where JP Morgan Chase beat analyst estimates despite accruing trading losses of $5.8 billion so far this year.
JP Morgan rose 6 percent on the week, and other results helped to confirm the positive trend as Wells Fargo posted similar results. These two stories helped the US banking sector as a whole, with most of the largest banks seeing gains of 3-6 percent on the week. This activity is likely to remain the central focus as trading begins on Monday with additional likely to be the main story with macro data limited on most trading days. Analysts will be looking to see if the rest of the economy can show similar strength, so if this does not materialize, expect the earlier losses to re-enter the picture.
My Trading Recommendation in 50 Words
With the late week positive reversal on Friday, momentum is set to continue in a positive direction and I will be looking to use the recent weakness in the USD/JPY to initiate longer term positions. I will buy 1 month CALL options as prices approach the 78.80 level.