U.S. Dollar Gained, Stocks Trimmed Losses But With Weak Market Breadth.
CMC Markets | Sep 22, 2020 06:14
The U.S. stock markets had started the week on a weak footing with the S&P 500 declining by -1.16%, dragged down by the cyclicals and commodities related sectors (materials, industrials, energy) which recorded an average loss of around -3.30%.
The main theme was cantered around political gridlock and trade uncertainties.
Following the passing of U.S. Supreme Court Justice Ruth Bader Ginsburg, the grapevine had suggested that lawmakers would focus less on fiscal stimulus talks and more on a new appointee. On the U.S-China trade relations front, China media had reported that China was updating its “unreliability entity” blacklist without updating any affected companies. Meanwhile, a U-turn had emerged over Oracle (NYSE:ORCL) Corp’s deal to take over TikTok as U.S. President Trump said that he would not approve the deal if TikTok’s Chinese parent company, ByteDance remains the majority shareholder of the service after Trump gave his initial “blessing” over the weekend.
In addition, the U.S. financial sector recorded a loss of -2.49% triggered by a negative news flow that indicated major global banks were involved in US$2 trillion worth of suspected transactions related to money laundering or other criminal activities in the past two decades.
U.S. technology stocks have managed to trim the losses towards the end of the U.S. session led by gains in Apple (NASDAQ:AAPL) (+3.03%) and Microsoft (NASDAQ:MSFT) (+1.07%). However, market breadth remains weak with declining stocks outpaced advancing stocks as seen in NYSE (439 advanced, 2556 declined) and Nasdaq Composite (639 advanced, 2666 declined).
The U.S. dollar had strengthen broadly almost against all the major currencies with the U.S. Dollar Index up by +0.59% at the close of yesterday’s U.S. session that saw a sell-off in gold and WTI crude oil. Gold futures had declined by -2.27% overnight to hover right above a medium-term range support at 1874 in place since 12 Aug 2020.
3 Things To Look Forward
U.S. Federal Reserve Chairman Powell testifies before congressional committees for three consecutive days starting on Tuesday on the CARES Act and to discuss the response to the on-going coronavirus pandemic. A point to note will be Powell’s responses to the broader state of the economy and fiscal stimulus. Also, hear for any “concrete” changes to improve the Fed’s Main Street Lending programme which is aimed at helping small to mid-sized companies and non-profit organisations that have been impacted adversely by the pandemic. Powell had acknowledged the low take-up rate of the programme which bought about US$2 billion in loans which only represents only 0.3% of the total capacity of US$600 billion during the press conference following the Fed’s September policy meeting on last Wednesday.
Get The App
Nike Inc (NYSE:NKE). first quarter (Q1) fiscal 2021 earnings results after the close of the regular U.S. stock market trading hours today. Nike shares are up nearly +14% for the past three months, outperforming the S& P 500 which is up by around +5%. Analysts polled by FactSet have forecasted earnings per share of US$0.46, down from US$0.86 last year; the consensus for revenue is pegged at US$8.94 billion, down from US$10.66 billion. During the coronavirus’s pandemic, Nike has focused on its direct-to-consumers offerings and invested in its digital channels to counter a slow-down in retail stores’ sales. Hence, market participants will be focusing how effective its digital ecosystem in generating sales.
Tesla (NASDAQ:TSLA) will hold its annual shareholder meeting to be followed by the highly anticipated “Battery Day” event. Expectations are centred on plans to ramp up battery capacity and potential new battery technology to surpass capabilities provided by combustion engines, hence an incentive for drivers to pivot towards battery operated electric vehicles. Technically, Tesla (TSLA)’s medium-term uptrend in place since 18 Mar 2020 low remains intact and it is still trading above its 34-day exponential moving average. Thus, as long as the 386.00 medium-term pivotal support holds, TSLA may see a further push up to retest its current all-time high of 502.49. A clearance above 502.49 opens up scope for 559.30/561.90 next (Fibonacci extension cluster).
Chart of the day
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.