Investing.com | Nov 06, 2018 10:31
Global stocks were mixed on Tuesday as investors awaited the results of the US midterm elections. Shares in Europe slipped lower alongside futures for the S&P 500, Dow and NASDAQ 100, while Asian indices ended mostly higher. Treasury yields edged lower, the dollar reversed early losses and the pound sterling extended an advance on Brexit hopes.
The STOXX Europe 600 gave up earlier gains, dragged down by financials and carmakers.
The FTSE dropped 0.8 percent on a stronger pound and mixed earnings. Bookmakers William Hill (LON:WMH) and one of the 'Big Four' supermarkets Morrisons (LON:MRW) posted disappointing results causing both shares to drop by over 5 percent.
Earlier, during the Asian session, Japan’s Nikkei 225 outperformed with a 1.05 percent advance and China's Shanghai Composite underperformed with a 0.23 percent slide, even as Chinese Vice President Wang Quishan regulatory filing , which was published on Saturday, revealed it bought back $928 million worth of shares.
As well, dip buyers took advantage of October’s brutal selloffs, after the Dow Jones dropped 1,300 points, or 5 percent—the most since the January 2016 correction. The S&P 500 plunged almost 7 percent over the month, suffering its worst loss since September 2011, and the NASDAQ Composite took its most significant hit since November 2008, a whopping 9 percent.
During Monday's session, the SPX climbed 0.56 percent, with Energy shares outperforming (+1.67 percent), even as oil prices continued to fall. Real Estate also inched higher (+1.66 percent), on upbeat economic data, even against a backdrop of rising rates, which could weigh on REIT profits. Berkshire Hathaway's ranking as the world's second-biggest real-estate broker also boosted the broader sector.
Financials advanced (+1.59 percent) on a stronger outlook for interest rate tightening following Friday’s NFP beat and the highest annual wage gain since before the financial crisis. Communication Services (-0.41 percent) was the day's laggard, followed by Technology (-0.1 percent), which was dragged lower by Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN).
Apple's share price slid 2.84 percent yesterday, for a total two-day loss of 9.34, after reports surfaced that the iPhone maker wouldn’t boost iPhone production. This comes after the company hit a $10 billion all-time high for services revenue—a crucial component for tech companies making the transition from product sales to services. The stock's intraday low price reached 45 percent off the $190 objective we pinpointed last week. For those who missed the opportunity, look for a bounce as part of a return move to test the reversal’s integrity.
Even after yesterday's rally, the S&P 500 Index remains below the triple resistance of the uptrend line since the February 2016 bottom, the 200 DMA and a bearish flag, drawing a supply-demand nexus line in the sand.
The Dow outperformed, gaining 0.76 percent. The NASDAQ underperformed, losing 0.38 percent.
US politics and central bank policy decisions from the Fed, Reserve Bank of Australia and Reserve Bank of New Zealand dominate a busy week for markets. The US midterm elections are considered a referendum on President Donald Trump's policies. Meanwhile, investors are also monitoring Brexit developments, with British Prime Minister Theresa May redoubling efforts to strike a deal with EU counterparts ahead of a cabinet meeting later today.
In commodity markets, oil is slipping lower for the seventh straight session on yesterday's reports that Iran was shunning US sanctions to resume selling and that the US itself had granted waivers to eight oil-importing countries. The WTI price remains under pressure after crossing below the 200 DMA, the uptrend line since June 2017 and after topping out.
h2 Up Ahead/h2Stocks
Currencies
The British pound jumped 0.3 percent to $1.3078, the strongest in almost three weeks.
Bonds
Britain’s 10-year yield gained one basis point to 1.515 percent, reaching the highest level in more than two weeks on its seventh straight advance.
Commodities
LME copper sipped 0.2 percent to $6,180.00 per metric ton.
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