Asia Morning: U.S. Stocks Tumble as Stimulus Hopes Fade
Ming Lam October 20, 2020 12:03 AM
No progress is made toward a stimulus deal agreement between the government and Congress...
On Monday, U.S. stocks closed sharply lower. The Dow Jones Industrial Average slumped 410 points (-1.44%) to 28195, the S&P 500 shed 56 points (-1.63%) to 3426, and the Nasdaq 100 tumbled 217 points (-1.84%) 11634.
Nasdaq 100 Index (Daily Chart) : Consolidation
Sources: GAIN Capital, TradingView
Despite House Speaker Nancy Pelosi calling on the government to reconcile remaining disputes on a fiscal stimulus package within 48 hours, no progress was made toward a deal agreement between the government and Congress.
Technology Hardware & Equipment (-2.27%), Energy (-2.1%) and Software & Services (-2.01%) sectors lost the most. Nordstrom (JWN -5.88%), Gartner (IT -4.41%), Ross Stores (ROST -4.37%) and VF (VFC -4.33%) were top losers.
ConocoPhillips (COP -3.17%) said it has agreed to buy U.S. shale oil producer Concho Resources (CXO -2.76%) for $9.7 billion.
Approximately 75% (74% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 81% (83% in the prior session) were trading above their 20-day moving average.
European stocks were broadly lower while trading volumes were greatly reduced by a technical glitch at exchange operator Euronext. The Stoxx Europe 600 Index declined 0.18%, Germany's DAX 30 fell 0.42%, France's CAC 40 eased 0.13%, and the U.K.'s FTSE 100 was down 0.59%.
U.S. Treasury prices posted modest losses, as the benchmark 10-year Treasury yield rose to 0.760% from 0.740% Friday.
Spot gold rose $4 (+0.22%) to $1,903 an ounce.
U.S. WTI crude futures (December) declined $0.06 (-0.20%) to $41.06 a barrel.
On the forex front, the U.S. dollar weakened further against other major currencies, though its loss shrank at the end of the session. The ICE Dollar Index lost 0.27% to 93.43.
The British pound was lifted by the European Union's comments that it was ready to intensify talks with Britain toward a trade deal. GBP/USD once breached the key 1.3000 level before closing at 1.2954, up 0.31% on day.
EUR/USD jumped 0.45% to 1.1769, while USD/JPY was little changed at 105.43.
AUD/USD was down for a fourth session as it dropped 0.1% to 0.7071. China's Gross Domestic Products (GDP) grew 4.9% on year in the third quarter, lower than +5.5% expected.
Meanwhile, the Chinese yuan reached a fresh 18-month high against the dollar, with USD/CNH (offshore yuan) falling 0.26% to 6.6787.
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.