InvestMacro

By ForexTime

• SPX500_m returns above 4,400
• Big Tech rebound helps S&P 500 pare biggest weekly drop since March
• Gold resurfaces above $1900 after hitting 5-month low
• Higher Treasury yields should be headwind for stocks, gold
• Look out for Nvidia earnings, Powell’s speech this week

US stock futures are building on Monday’s gains, after a strong rebound in technology stocks.

The SPX500_m has broken past the psychologically-important 4,400 mark, making an about-turn after halting a four-day drop.

This rebound comes after global stocks had their biggest weekly drop since March last week.

The “magnificent seven” of megacap tech stocks – Alphabet, Amazon, Apple Meta, Microsoft, Nvidia and Tesla – lost more than $900 billion in value over three consecutive weeks of falls. That was their worst run of combined market cap decline this year.

But yesterday saw Tesla jump over 7% while Nvidia rose 8.5% ahead of its results after the closing bell on Wednesday which will be a key focus.

Oversold gold finds a bid

Gold dipped $1885 to post a five-month low yesterday which came after four straight weeks of losses, something not seen since February.

Rampant Treasury yields are not a good sign for bullion as it is a non-interest-bearing asset.

Indeed, the 10-year “real” yield has hit 2% for the first time since March 2009. However, prices have been oversold on momentum indicators and buyers have stepped in recently as we are now seeing a third day of gains this morning.

The yellow metal still currently trades below the 200-day simple moving average (SMA), though has resurfaced above the psychologically-important $1900 level for the time being.

We also note that hedge funds cut their gold longs to a six-month low in the week to August 15 while ETF holdings have seen 12 straight weeks of outflows.

Of course, investors and traders will be wondering whether or not this rebound has legs.

Markets have half an eye on Fed Chair Powell’s speech on Friday at Jackson Hole while trying to navigate surging borrowing costs.

Higher rates for longer should be a headwind for stocks and also gold, potentially exerting an ultimate cap on how high these assets can climb.

But for now, markets are putting such thoughts aside, with US stocks and gold attempting to enter the tail-end of August on a less dour note.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

At Friday’s close, the Dow Jones (US30) index increased by 0.07% (-2.19% for the week), while the S&P 500 (US500) index was down by 0.02% (-1.98% for the week). The NASDAQ Technology Index (US100) closed Friday by negative 0.20% (-2.27% for the week). August is a seasonally weak month for stock indices, and this time is no exception. This is partly due to the vacation period in the banking sector. Partly it is because the latest economic data in the US showed that the economy is not in danger of recession in the near future. As a result, rising government bond yields have lifted the dollar index, causing stock indices to decline.

The Jackson Hole Symposium is scheduled to begin on Thursday of this week. Various academics, bank chiefs, and central bank governors gather to discuss monetary policy and financial markets. The policymakers will give their interviews at the end of the conference. These interviews could cause significant volatility as they could foreshadow future monetary policy dynamics. In particular, investors will be waiting for Fed Chairman Jerome Powell to speak to clarify the economic outlook and the future trajectory of interest rates.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) decreased by 0.65% (-1.54% for the week), France’s CAC 40 (FR40) fell by 0.38% (-2.22% for the week) on Friday, Spain’s IBEX 35 (ES35) fell by 0.19% (-1.73% for the week), and the UK’s FTSE 100 (UK100) closed on negative 0.65% (-3.48% for the week). This week, a slew of manufacturing and service sector business activity data will be released on Wednesday. This data could provide insight into whether the European Central Bank will raise interest rates again in September and whether the Bank of England will decide to raise rates more aggressively at its next meeting.

On Friday, crude oil prices broke a seven-week winning streak. Investors are now focused on the distinct possibility of lower energy demand rather than the certainty of supply cuts. Over the past few weeks, increasingly contradictory economic news has come out of China, crowned by the release of alarming consumer price data indicating that the country is in complete deflation. Problems at some significant real estate construction companies further underscore the slowdown in China’s economic recovery. Over the weekend, another major real estate developer Country Garden found itself in the grip of a debt crisis. China is the world’s largest energy importer, and any sign of economic stagnation will always be bad news for oil bulls.

Asian markets were also down last week. Japan’s Nikkei 225 (JP225) fell by 3.10% for the week, China’s FTSE China A50 (CHA50) lost 0.88%, Hong Kong’s Hang Seng (HK50) ended the week down by 3.99%, and Australia’s S&P/ASX 200 (AU200) ended the week on negative 2.62%.

On Monday, the People’s Bank of China (PBoC) lowered the benchmark one-year lending rate (LPR) to 3.45% from 3.55% previously (3.40% expected). Meanwhile, China’s Central Bank kept the five-year interest rate unchanged at 4.20%. The rate cut is being implemented to support economic development, which is a positive for Chinese stocks. It is also a positive factor for countries with close trade cooperation with China, Singapore, New Zealand, and Australia.

S&P 500 (F)(US500) 4,369.71 −0.65 (−0.02%)

Dow Jones (US30) 34,500.66 +25.83 (+0.075%)

DAX (DE40)  15,574.26 −102.64 (−0.65%)

FTSE 100 (UK100) 7,262.43 −47.78 (−0.65%)

USD Index  102.85 +0.33 (+0.32%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – China PBoC Loan Prime Rate at 04:15 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.84%, while the S&P500 Index (US500) lost 0.77%. The NASDAQ Technology Index (US100) closed at negative 1.17% on Thursday. Rising US bond yields pressured stocks after 10-year Treasuries rose to their highest in nearly ten months. A strong labor market coupled with hawkish FOMC minutes gives the Federal Reserve more room to keep rates higher.

US weekly initial jobless claims fell by 9,000 to 239,000, showing a stronger labor market than expected at 240,000. The August FRB Philadelphia Business Outlook Survey rose by 25.5 to a 16-month high of 12.0, stronger than expectations of 10.4.

Equity markets in Europe traded lower yesterday. Germany’s DAX (DE40) fell by 0.71%, France’s CAC 40 (FR40) fell by 0.94% on Thursday, Spain’s IBEX 35 (ES35) declined by 0.78%, and the UK’s FTSE 100 (UK100) closed at negative at 0.65%.

Due to lower energy prices, the EU trade balance showed a €2 billion deficit in the first quarter of 2023 after a €150 billion deficit in the third quarter of 2022 and a €78 billion deficit in the fourth quarter of 2022.

Norway’s Сentral Bank raised its key interest rate by 0.25% to combat high inflation. Norges Bank raised the rate to 4%, the highest level since 2008. The bank said in a report that inflation, which reached 5.4% in July, has eased but remains high and markedly above the 2% target. The head of Norges Bank said the future trajectory of the discount rate will depend on economic developments and added that the rate is likely to be raised again next month.

Oil rose slightly yesterday, supported by an EIA report on Wednesday that showed US crude inventories fell to an 8-month low. Oil was also backed by better-than-expected US economic data on Thursday, which showed the economy’s strength supporting energy demand. A negative factor for oil prices is progress in Iran-US relations, which could lead to increased oil exports from Iran. An agreement on Iran’s nuclear program could prompt the US and its allies to lift sanctions on Iranian oil exports, increasing global oil supplies.

Natural gas prices are still down due to high inventories caused by weak heating demand during an abnormally mild winter. Last winter’s warm temperatures increased natural gas inventories in Europe and the United States. As of August 15, natural gas storage in Europe was 90% full, well above the 5-year seasonal average of 76% for this time of year. Natural gas inventories in the United States as of August 11 are 10.8% above the 5-year seasonal average.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.44% yesterday, China’s FTSE China A50 (CHA50) added 0.30%, Hong Kong’s Hang Seng (HK50) was little changed on the day, and Australia’s S&P/ASX 200 (AU200) was negative 0.68% on Thursday. Signals of new stimulus measures from China helped local stocks post gains.

Japan faced a trade deficit last month as exports fell for the first time in more than two years due to slowing growth overseas. Japan’s trade deficit totaled 78.7 billion yen ($539 million), the first trade deficit for the world’s third-largest economy in two months.

S&P 500 (F)(US500) 4,370.36 −33.97 (−0.77%)

Dow Jones (US30) 34,474.83 −290.91 (−0.84%)

DAX (DE40)  15,676.90 −112.55 (−0.71%)

FTSE 100 (UK100) 7,310.21 −46.67 (−0.63%)

USD Index  103.43 +0.00 (+0.00%)

• – Japan National Consumer Price Index (m/m) at 02:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At yesterday’s stock market close, the Dow Jones (US30) index decreased by 0.52%, while the S&P 500 (US500) index lost 0.76%. The NASDAQ Technology Index (US100) closed negative 1.15% on Wednesday. The S&P 500 (US500) fell to a 5-week low, the Dow Jones (US30) fell to a 4-week low, and the Nasdaq 100 (US100) fell to a one-and-a-half-month low. Stock indices came under pressure as government bond yields jumped sharply after hawkish FOMC minutes.

According to the FOMC minutes of the US Federal Reserve’s July 25-26 meeting released Wednesday last month, most Fed officials still viewed high inflation as a persistent threat that could warrant further interest rate hikes. At the same time, officials saw some tentative signs that inflationary pressures may be easing. Most investors and economists believe the July rate hike was the last. Earlier this week, Goldman Sachs economists predicted the Fed would begin cutting rates by the middle of next year.

Other economic data showed that US housing starts rose by 3.9% m/m to 1.452 million in July, beating expectations of 1.450 million. However, July building permits, an indicator of future construction, rose just by 0.1% m/m to 1.442 million, weaker than expectations of 1.463 million. US manufacturing production unexpectedly rose by 0.5% m/m in July, beating expectations. Rising economic data, along with hawkish FOMC reports, supported the US index yesterday.

Equity markets in Europe traded flat yesterday. German DAX (DE40) rose by 0.14%, French CAC 40 (FR40) fell by 0.10% on Wednesday, Spanish IBEX 35 (ES35) added 0.05%, British FTSE 100 (UK100) closed negative 0.44%.

The Eurozone GDP report showed a slight increase from the previous quarter. Over the past three months, the Eurozone economy grew by 0.3%. On an annualized basis, GDP fell from 1.1% to 0.6%. Dutch GDP contracted by 0.3% in the second quarter of 2023. This marked the second consecutive quarterly contraction for the economy, meaning that the Netherlands is in a “technical recession.” Eurozone countries are gradually slipping into recession one by one.

The UK inflation report reinforced economists’ view that the Bank of England will continue to raise rates at its upcoming meetings. Although the consumer price index fell from 7.9% to 6.8% year-on-year, inflation remains the highest among the major developed economies, and the slowdown in inflation is again more modest than expected. Meanwhile, core inflation (which excludes energy and food prices) remained at 6.9% y/y in June, only slightly better than May’s record 7.1% y/y.

The dollar strengthening on Wednesday and the S&P 500 falling to a 5-week low put pressure on energy prices. In addition, oil is under pressure due to concerns about China’s economic growth after JPMorgan Chase and Barclays lowered their forecasts for China’s growth in 2023. Crude oil prices fell on Wednesday despite the EIA’s weekly crude inventories falling more than expected.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.46% yesterday, China’s FTSE China A50 (CHA50) fell by 0.29%, Hong Kong’s Hang Seng (HK50) was down by 1.26% for the day, and Australia’s S&P/ASX 200 (AU200) was in negative 1.50% for Wednesday.

China’s economic problems continue to weigh on global markets. Yesterday, the Chinese yuan fell to its lowest in 9.5 months, and Chinese indices closed lower after China’s July home sales fell for the second month, the biggest drop in 7 months. In addition, liquidity concerns in China’s shadow banking system intensified after Zhongrong International Trust missed payments on dozens of its investment products. JPMorgan Chase cut China’s 2023 GDP forecast to 4.8% from an estimate of 6.4% in May. Barclays cut China’s 2023 GDP forecast to 4.5% from a previous estimate of 4.9%.

S&P 500 (F)(US500) 4,404.33 −33.53 (−0.76%)

Dow Jones (US30) 34,765.74 −180.65  (−0.52%)

DAX (DE40)  15,789.45 +22.17 (+0.14%)

FTSE 100 (UK100) 7,356.88 −32.76 (−0.44%)

USD Index  103.48 +0.27 (+0.26%)

• – New Zealand Producer Price Index (q/q) at 01:45 (GMT+3);
• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
• – Norwegian Norges Interest Rate Decision at 11:00 (GMT+3);
• – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3)

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.