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Market Wrap: Stocks, Bonds, Commodities |
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On Friday, major U.S. stock indexes pared early gains to close lower, as investors became cautious following Federal Reserve Chairman Kevin Warsh’s hawkish comments.
The Nasdaq 100 fell 208 points (-0.70%) to 29,433, the S&P 500 dipped 19 points (-0.25%) to 7,711, and the Dow Jones edged down 9 points (-0.02%) to 53,559.
In a closely watched keynote speech at the Fed's Jackson Hole Economic Policy Symposium in Wyoming, Warsh expressed concern about elevated inflation, saying: "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."
Traders now see the probability of the Fed hiking interest rates in September significantly higher at 57%, according to the CME Group’s FedWatch tool.
The U.S. 10-year Treasury yield advanced 5.4 basis points to 4.730%, posting a three-session rally.
Nvidia (NVDA) retreated 4.57% on Friday, after jumping more than 8% on Thursday following results.
On the other hand, Amazon (AMZN) rose 3.97%, Alphabet (GOOGL) climbed 1.74%, Microsoft (MSFT) gained 1.68%, and Apple (AAPL) was up 1.63%.
Gap Inc (GAP) gained 12.94%. The apparel retailer announced a leadership change at its Old Navy brand and raised its full-year earnings guidance.
PayPal (PYPL) slid 12.71% following reports that Stripe and Advent International abandoned their 53-billion-dollar joint takeover bid for the digital payments company.
Marvell Technology (MRVL) lost 10.28%. The chipmaker reported better-than-expected quarterly results, raised its full-year guidance, and signed a major new AI chip agreement with Google; however, investors seemed unimpressed.
European stocks closed higher on Friday, with the DAX 40 rising 0.77%, the CAC 40 up 0.98%, and the FTSE 100 up 0.29%.
In early Asian trading hours on Monday, U.S. WTI crude futures jumped nearly 2% to 85 dollars a barrel after reports said U.S. forces struck two targets on Iran’s Larak Island in the Strait of Hormuz.
Late on Friday, U.S. President Donald Trump said the U.S. struck a deal to control more than 65 billion barrels of proven oil reserves in Venezuela, "at no cost to the American Taxpayer".
Spot gold remained subdued at 4,461 dollars an ounce after sinking more than 3% on Friday in the face of a stronger dollar.
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In early Asian trading hours on Monday, the U.S. dollar held up well, as rate-hike expectations were boosted by Warsh’s remarks at Jackson Hole. EUR/USD stayed under pressure at 1.1584, GBP/USD traded at 1.3535, and AUD/USD was at 0.7161.
USD/JPY was firm at 160.10, a one-month high, and USD/CHF was around 0.8090.
USD/CAD stayed above 1.3900. Canada’s gross domestic product grew at an annualized rate of 3.3% in the second quarter (vs 3.4% expected and +0.3% in the first quarter).
Bitcoin showed resilience, trading around 78,400 dollars.
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In Asian trading hours, USD/JPY retreated to 159.77. Japan's industrial production grew 0.1% month-on-month in July (vs -0.5% expected), while retail sales rose 2.4% (vs +3.1% estimated).
On the other hand, China's official Manufacturing Purchasing Managers' Index improved to 49.8 in August, above the 49.7 expected.
Meanwhile, EUR/USD and GBP/USD both remained subdued, at 1.1590 and 1.3542 respectively.
Gold dropped to 4,402 dollars.
Bitcoin fell to 77,597 dollars.
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Germany's inflation rate is expected to climb to 2.9% year-on-year in August.
In the U.S., the Dallas Fed Manufacturing Index is estimated to slip to 0.7 in August.
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