ICM Capital - Market Update

Saturday, July 27, 2024

marketupdate@ICMCapital.co.uk

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Market Comment

Market Wrap: Stocks, Bonds, Commodities

On Thursday, major U.S. stock indexes closed mixed after a heavy sell-off in the prior session. The Dow Jones Industrial Average rebounded 81 points (+0.20%) to 39,935, while the S&P 500 fell 27 points (-0.51%) to 5,399, and the Nasdaq 100 slid a further 201 points (-1.06%) to 18,830.

Energy, industrial and financial stock sectors were market leaders, while technology and utilities sectors lost the most.

Tesla (TSLA) rebounded 1.97%, while other megacap tech stocks remained under pressure, with Alphabet (GOOGL) falling 3.10%, Microsoft (MSFT) down 2.45%, Nvidia (NVDA) down 1.72%, and Meta Platforms (META) down 1.70%.

Ford Motor (F) plunged 18.36% after reporting disappointing quarterly earnings.

International Business Machines (IBM) rose 4.33% as the company's second-quarter results beat expectations.

ServiceNow (NOW), a cloud-based software management firm, surged 13.4%, and Southwest Airlines (LUV) gained 5.52%.

The U.S. 10-year Treasury yield retreated 3 basis points to 4.256%.

Regarding U.S. economic data, gross domestic product grew 2.8% quarter on quarter in the second quarter (vs +2.5% expected). The latest initial jobless claims declined to 235,000 (vs 247,000 expected).

Durable goods orders fell 6.6% month on month in June (vs +0.3% expected).

U.S. core personal consumption expenditure (PCE) price growth, to be released later today, is expected to slow to 2.5% year on year in June.

In Europe, the DAX 40 dipped 0.48%, the CAC 40 dropped 1.15%, while the FTSE 100 gained 0.40%.

U.S. WTI crude-oil futures rose $0.57 to $78.16 a barrel.

Gold price fell $52 (-2.15%) to $2,361 an ounce.

Market Wrap: Forex

The U.S. dollar index was little changed at 104.38.

EUR/USD added 4 pips to 1.0843. Germany's Ifo business climate indicator dipped to 87.0 in July (vs 89.0 expected).

USD/JPY marked a low of 151.95 before rebounding to 153.86.

GBP/USD fell 56 pips to 1.2850, and AUD/USD dropped 47 pips to 0.6534.

USD/CHF declined 43 pips to 0.8808, while USD/CAD added 19 pips to 1.3826.

Bitcoin saw volatile trading, as it once touch a low of $63,412 before bouncing back to $65,687, halting a three-day decline.

Morning Trading

In Asian trading hours, USD/JPY eased to 153.70. Japan's data showed that Tokyo's core inflation accelerated to 2.2% year on year in July (vs 2.3% expected).

Meanwhile, EUR/USD advanced to 1.0860 and GBP/USD was up slightly to 1.2865.

Gold rebounded to $2,372.

Bitcoin bounced to $66,690.

Expected Today

France's consumer confidence index is expected to slip to 88.6 in July.

In the U.S., core personal consumption expenditure price index is estimated to be up 0.1% month-on-month in June, while personal income and personal spending are both expected to increase by 0.3%. Also, final reading of Michigan consumer sentiment index for July is estimated at 66.0.

Forex	Last	%1D	%YTD
EUR/USD	1.0851	0.06	-1.68
USD/JPY	154.24	0.20	9.34
GBP/USD	1.2864	0.10	1.06

Commodities	Last	%1D	%YTD
Gold	2,373.9200	0.40	15.09
Silver	27.7900	-0.64	16.96
Crude Oil	77.8000	-0.61	8.49

EUR/USD intraday: as long as 1.0838 is support look for 1.0898

Our pivot point is at 1.0838.

Our preference: as long as 1.0838 is support look for 1.0898.

Alternative scenario: below 1.0838, expect 1.0817 and 1.0804.

Comment: the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The pair could retrace. Moreover, the pair is trading under its 20 period moving average (1.0859) but above its 50 period moving average (1.0855).