Investing.com | Aug 20, 2019 13:08
Futures on the S&P 500, Dow and NASDAQ 100 slipped into red territory this morning after a mixed Asian session, following some hawkish Fed rhetoric that offset the bullishness of a U.S.-China trade ceasefire.
Europe's STOXX 600 also dropped after posting some mild gains. From a technical perspective, the pan-European benchmark’s advance was halted at the month’s highs, suggesting a line of supply. The index returned to above the 200 DMA, but only after posting a trough lower than June's low, thereby putting the uptrend into question.
In the earlier Asian session, regional stocks ended mostly higher as investors weighed long-term recession fears against short-term stimulus—as well as a 90-day extension, from the U.S. Commerce Department, on a trade reprieve that allows Huawei to buy equipment from U.S. suppliers.
However, Hong Kong’s Hang Seng (-0.23%) underperformed, as civil unrest continued unabated. Both Twitter and Facebook (NASDAQ:FB) suspended a number of accounts believed to spread misinformation, by Chinese state-backed parties, about Hong Kong protestors. China’s Shanghai Composite (-0.11%) ranked as the second worst performer.
Conversely, Australia’s S&P/ASX 200 (+1.2%) outperformed, rising for the second day, to back above the 100 DMA. It’s noteworthy that despite the index’s reliance on the Chinese market, the two stood at opposite ends of the performance spectrum. Perhaps, the Aussie dollar’s weakest price in a decade boosted local shares.
Yesterday, U.S. equities climbed for a third day with chipmakers on reports that Huawei restrictions would be postponed for a three-month grace period.
The NASDAQ Composite (+1.35%) benefited the most from the news.
The S&P 500 leaped 1.21%, driving every single sector into green territory from defensive Utilities (+0.60%) to Energy stocks (+2.21%). The latter tracked oil prices, which surged after a drone attack in Saudi Arabia boosted lingering Middle East tensions.
Meanwhile, the Dow Jones Industrial Average (+0.96%) remained below its uptrend line since the December bottom.
In the bond market, the yield on 10-year Treasurys resumed a slide after paring some of Monday's losses as Fed Bank of Boston President Eric Rosengren pushed back against further rate cuts, arguing he’s not convinced that slowing global growth and trade will significantly dent the economy. Meanwhile, U.S. President Donald Trump urged the central bank to cut rates by “at least 100 basis points.“
Technically, the move is considered a pullback after a bearish flag.
The dollar climbed for the fifth session out of six, within an ascending channel.
Gold strengthened even against a rising USD due to risk off likely creeping back into markets on one side and technicals on the other, with the price finding support from previous lows as the precious metal nears a channel top—all at the $1,500 psychological level.
Written By: Investing.com
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.