Asia Morning July 27

On Friday, U.S. stocks sank further following the sell-off Thursday. The Dow Jones Industrial Average slid 182 points (-0.68%) to 26469, the S&P 500 fell 20 points (-0.62%) to 3215, and the Nasdaq 100 lost 97 points (-0.92%) to 10483. Beware, the Nasdaq 100 has marked two weeks of decline. 

Nasdaq 100 Index: Daily Chart


Source: GAIN Capital, TradingView

Escalating tensions between the U.S. and China started to dragged the feet of market bulls. Retaliating against the U.S. shutting the Chinese consulate in Houston, Texas, Beijing ordered the U.S. consulate in Chengdu city to close. Prior to the U.S. market session, China's Shanghai Composite Index shed 3.9% and Hong Kong's Hang Seng lost 2.2%.

Semiconductors & Semiconductor Equipment (-3.29%), Pharmaceuticals, Biotechnology & Life Sciences (-1.58%) and Automobiles & Components (-1.24%) sectors lost the most. Intel (INTC -16.24%) became the biggest loser in the S&P 500 after warning of further delays in development of its superfast seven-nanometer chip technology. On the other hand, Advanced Micro Devices (AMD +16.42%) gapped up to a record high of $69.35.

On the technical side, about 56.4% (57.0% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 83.2% (89.3% in the prior session) were trading above their 20-day moving average.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers' Index (preliminary reading) rose to 51.3 in July (52.0 expected). New Homes Sales jumped to an annualized rate of 776,000 unit in June (700,000 units expected).

U.S. Durable Goods Orders for June (preliminary readings) will be released later today (+6.8% on month expected).

European stocks were heavy on Friday. The Stoxx Europe 600 Index shed 1.70%, Germany's DAX slumped 2.02%, France's CAC 40 dropped 1.54% and the U.K.'s FTSE 100 was down 1.41%.

The benchmark U.S. 10-year Treasury yield ticked up to 0.589%.

Gold, widely regarded as a safe-haven asset, received bids as investors' risk appetite shrank. Spot gold price was up for a sixth session charging $18.00 (+1.0%) to $1,905 an ounce, the highest close since September 2011.

U.S. WTI crude oil futures (August) rebounded 0.5% to $41.29 a barrel.

On the forex front, the U.S. dollar's weakness seems unstoppable. The ICE U.S. Dollar Index posted a six-session losing streak falling 0.5% to 94.35, the lowest level since September 2018.  

EUR/USD advanced a further 0.5% to 1.1656, a high level last seen in September 2018. The Markit Eurozone Manufacturing PMI (preliminary reading) jumped to an expansion number of 51.1 in July (50.1 expected), and the Services PMI bounced to 55.1 (51.0 expected).

GBP/USD gained 0.4% to a four-month high of 1.2795. U.K. official data showed that Retail Sales surged 13.9% on month in June (+8.3% expected). The Markit U.K. Manufacturing PMI (preliminary reading) rose to 53.6 in July (52.0 expected), and the Services PMI was up to 56.6 (51.5 expected).

USD/JPY once breached the psychological support level of 106.00 before closing at 106.13, down 0.7% on day.