Axi | Jul 31, 2018 09:16
Originally published by AxiTrader h2 Market Summary (7.39 am Tuesday, July 31)/h2
3 red candles. 3 down days.
That’s not remarkable for any asset really. But it’s the scale of the sentiment shift for tech stocks that is remarkable over the past week on the back of the disappointments of the Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) earnings, not to mention Intel (NASDAQ:INTC) and Netflix (NASDAQ:NFLX) previously.
And so it is this morning that the selling of tech shares continued as traders lighten their very heavy load. That negativity has fed throughout global stock markets and that bout of risk aversion has been seen in divergent moves in forex markets between the euro, yen, and Australian dollar.
But it’s not been evident in US bonds or credit markets yet. Though it’s worth noting bunds and gilts were higher. We’ll see how it all plays out I guess.
Anyway, at the close the Nasdaq 100 was down 1.42% at 7,193. To put that in context it’s the lowest close since, well, July 6 this year. The tech part of the S&P 500 was 1.83% lower but the overall index was down just 0.57% as telecom and energy stocks acted as a counterbalance. The Dow was down 0.57% to 25,306 and the Russell 2000 lost 0.61%.
European stocks will likely have a little catch up when they open this afternoon. The DAX was 0.48% lower, the CAC fell 0.37% and the FTSE 100 in London was essentially flat. Those moves came after another poor day with all the indexes besides the SET in Thailand down.
Here at home after the ASX 200 again rejected the range high yesterday to close at 6,278 SPI traders have been pretty circumspect with their expectations about the day ahead only knocking 3 points off prices at the moment.
To forex markets now and the US dollar is weaker. The US Dollar Index has lost 0.33% to 94.36 with the euro gaining a similar amount to regain 1.1700 – German and Spanish inflation prints helped a little as did the move higher in Bund rates. The weight of US dollar longs could be the enemy of its bull market for a little while.
Anyway, the pound lifted 0.2% to 1.3129 despite news the UK government is readying plans for the no deal Brexit. Mark Carney in a Bloomberg interview did suggest that rates will rise this week however. USD/JPY was flat at 111.04 as we await the BoJ today.
On the commodity bloc there was much divergence. The kiwi is up half a percent and looking more and more likely to retest and maybe bust 0.6850 resistance, the Canadian dollar is 0.15% stronger with USD/CAD at 1.3030 while the Aussie has underperformed with a 0.04% game but reclaimed the 74 cent region it lost yesterday – it’s at 0.7405. CNH and CNY are largely unchanged day on day at 6.8272 and 6.8102.
Oil is higher as traders worry a little further about what the Saudis are up to and what the Houthi rebels may or may not be able to do to supply lines. Worth noting though is that in a press conference with Italian PM Conte President Trump said he’ll meet the Iranians. Anyway WTI climbed 1.89% to 1.89% while Brent was 0.78% to $75.34 in LCOc2 terms as the front contract rolls off. Gold is at $1221, copper dipped 0.25% to $2.78.
Bitcoin collapsed a couple of hundred dollars at one point, but it’s back at $8,108 for a loss of 1.4%.
On the day today there is plenty to get our economic teeth into. The global manufacturing canary – South Korea – releases business confidence, construction output, industrial and manufacturing production, along with retail sales. We get Japanese industrial production and unemployment this morning before the BoJ this afternoon and of course we get the NBS China PMI’s for manufacturing and services.
Here at home its private sector credit, and building approvals before we get retail sales in Germany, Euro area inflation for July and GDP for Q2. Canada releases its monthly GDP (yeah I know) as well as PPI and in the United States we get very important employment costs, PCE prices, Personal income, and spending data as well as the Chicago PMI and Case Shiller housing.
h2 Macro Stuff that affects everyone and everything – either today or eventually/h2 h2 International/h2
Have a great VERY BIG day!
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