Asia Morning: U.S. Stocks Advance as Trump Leaves Hospital
Ming Lam October 6, 2020 2:02 AM
The U.S. dollar sees weakness return as investors' risk appetite grows...
On Monday, U.S. stocks rebounded. The Dow Jones Industrial Average jumped 465 points (+1.68%) to 28148, the S&P 500 rose 60 points (+1.80%) to 3408, and the Nasdaq 100 surged 253 points (+2.25%) to 11509.
S&P 500 Index: Daily Chart
Sources: GAIN Capital, TradingView
Market momentum picked up after President Donald Trump said that he would leave hospital in the evening of Monday.
Semiconductors & Semiconductor Equipment (+3.30%), Energy (+2.90%) and Technology Hardware & Equipment (+2.78%) sectors performed the best. Energy stocks, such as Halliburton (HAL +5.57%) and Occidental Petroleum (OXY +5.88%), jumped as oil prices surged over 6%. Vaccine-related stocks Regeneron Pharmaceuticals (REGN +7.18%) and Gilead Science (GILD +2.30%) also posted gains.
Approximately 63% (62% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 58% (50% in the prior session) were trading above their 20-day moving average.
Regarding U.S. economic data, the Markit U.S. Services Purchasing Managers' Index (PMI) posted at 54.6 for September (as expected). The Institute for Supply Management (ISM) Services Index rose to 57.8 (56.2 expected).
European stocks were broadly higher. The Stoxx Europe 600 Index rose 0.81%, Germany's DAX 30 jumped 1.10%, France's CAC 40 gained 0.97% and the U.K.'s FTSE 100 was up 0.69%.
U.S. Treasury prices sank further as trading volumes exceeded averages. The benchmark U.S. 10-year Treasury yield bounced to 0.765% from 0.690% Friday. The 30-year yield climbed to 1.581%, the highest level since June 10.
Upbeat market sentiment and a weaker dollar helped to lift commodity prices. Spot gold price increased $13 to $1,913 an ounce.
U.S. WTI crude oil futures (November) surged $2.31 (+6.23%) to $39.36 at the close.
On the forex front, the U.S. dollar saw weakness return as investors' risk appetite grew along with the rallying stock markets. The ICE Dollar Index slid 0.36% to 93.47.
The Japanese yen also softened. USD/JPY gained 0.39% to 105.76.
EUR/USD rose 0.57% to 1.1783. European Commission data showed that the Eurozone's retail sales rose 4.4% on month in August (+2.5% expected).
September Markit Services PMI was reported at 48.0 for the Eurozone (47.6 expected), 50.6 for Germany (49.1 expected), 47.5 for France (as expected) and 56.1 for the U.K. (55.1 expected).
GBP/USD climbed 0.37% to 1.2979. Meanwhile, latest data from the Commodity Futures Trading Commission showed that leveraged funds cut net long positions on the pound to the lowest level since August.
Commodity-related currencies had a positive day. AUD/USD added 0.27% to 0.7180, while USD/CAD fell 0.32% to 1.3264.
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.