Asia Morning: Dow, S&P End 7-Day Rally

,

The Nasdaq 100 fell 209 points to 10876 posting a three-day decline...

Trading floor 2

On Tuesday, U.S. stocks ended in negative territory. The Dow Jones Industrial Average slid 104 points (-0.38%) to 27686 and the S&P 500 dropped 26 points (-0.80%) to 3333. Both indexes halted a seven-session rally. The Nasdaq 100 fell 209 points (-1.89%) to 10876 posting a three-day decline.


S&P 500 Index: Daily Chart


Source: GAIN Capital, TradingView


Investors were concerned after Senate Republican leader Mitch McConnell said there was no progress on talks for a COVID-19 relief package.

Technology Hardware & Equipment (-2.45%), Utilities (-2.13%) and Real Estate (-1.87%) sectors led the market lower. Newmont Mining (NEM -7.39%), Occidental Petroleum (OXY -8.01%) and Advanced Micro Devices (AMD -6.52%) lost the most.    

Meanwhile, Wynn Resorts (WYNN +8.36%), Las Vegas Sands (LVS +7.32%), TripAdvisor (TRIP +4.53%) and  Expedia (EXPE +3.78%) posted gains. 

Regarding U.S. economic data, Producer Prices increased 0.6% on month in July (+0.3% expected, -0.2% in June).

European stocks were broadly higher. The Stoxx Europe 600 Index jumped 1.68%, Germany's DAX 30 surged 2.04%, France's CAC 40 climbed 2.41% and the U.K.'s FTSE 100 was up 1.71%.

U.S. government bond prices remained under pressure, as the benchmark 10-year Treasury yield jumped to 0.657% from 0.571% Monday.

Precious metals were sold hard as investors turned optimistic that a coronavirus vaccine would come soon. Spot gold price nose-dived $115.00 or 5.70% to $1,911 an ounce, the biggest daily dollar slide in over seven years. Spot silver price plummeted 14.84% to $24.80 an ounce.

U.S. WTI crude oil futures (September) declined 0.8% to $41.61 a barrel.

On the forex front, the ICE U.S. Dollar Index marked a day-low of 93.18 before bouncing back to 93.64, broadly unchanged from the prior session.

EUR/USD was little changed at 1.1737. The German ZEW Current Situation Index fell to -81.3 in August (-69.5 expected) from -80.9 in July while Expectations Index climbed to 71.5 (55.8 expected) from 59.3. The eurozone's industrial production for June will reported later in the day (+10.0% on month expected).

GBP/USD slipped 0.2% to 1.3051. Official data showed that U.K. jobless rate was steady at 3.9% in the April-June period (4.2% expected). Later today, second quarter GDP (-22.3% on year expected) and June industrial production (+9.0% on month expected) will be released.

USD/JPY advanced 0.5% to 106.53.

USD/CAD lost 0.3% to 1.3308. Government data showed that Canada's housing starts rose to an annualized rate of 245,600 units in July (205,000 units expected) from 212,100 units in June.

Meanwhile, NZD/USD was down 0.4% to 0.6564. The Reserve Bank of New Zealand is expected to keep its benchmark rate at 0.25% unchanged later today.


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.