Asia Morning: US Stocks End in Red, Awaiting Trump's Actions on China

,

On Thursday, U.S. stocks erased gains to close in the red after President Donald Trump announced plans to hold a Friday press conference on China...

Trading floor 2

On Thursday, U.S. stocks erased gains to close in the red after President Donald Trump announced plans to hold a Friday press conference on China. Beijing has just passed a controversial national security law which is widely expected to erode Hong Kong's autonomy. 

Sentiment was also hurt by Trump's saying that he would sign an executive order putting more scrutiny on social media companies.

The Dow Jones Industrial Average slipped 147 points (-0.6%) to 25400, the S&P 500 dropped 6 points (-0.2%) to 3029 and the Nasdaq 100 was down 25 points (-0.3%) to 9416.


Source: GAIN Capital, TradingView

Automobiles & Components (-3.86%), Consumer Durables & Apparel (-3.13%) and Banks (-3.08%) sectors lost the most.

HP Inc (HPQ -12.32%), Kohls (KSS -9.74%), Hanesbrands (HBI -9.65%) and TripAdvisor (TRIP -9.46%) were top losers, while Dollar Tree (DLTR +11.55%), Alexion Pharmaceuticals (ALXN +7.80%) and Regeneron Pharmaceuticals (REGN +6.29%) were top gainers.    

On the technical side, about 43.2% (38.0% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 89.5% (83.0% in the prior session) were above their 20-day moving average.

U.S. official data showed that first-quarter GDP (second reading) contracted at an annualized rate of 5.0% on quarter (-4.8% expected). 

Initial Jobless Claims declined to 2.123 million for the week ended May 23 (2.100 million expected). Continuing Claims unexpectedly decreased to 21.052 million for the week ended May 16 (25.680 million expected) from the prior week's 24.912 million, showing that Americans are returning to work.

Durable Goods Orders (preliminary reading) dropped 17.2% on month in April, the biggest decline on record.

Later today, Wholesale Inventories (-0.7% on month in April expected), Personal Income (-6.0% on month expected), Personal Spending (-12.8% on month expected), Market News International's Chicago Purchasing Managers Index (40.0 in May expected) and the University of Michigan's Consumer Sentiment Index (74.0 in May expected) will be reported.

European stocks continues their advance, with the Stoxx Europe 600 Index rising 1.6%. Germany's DAX increased 1.1%, the U.K.'s FTSE 100 climbed 1.2% and France's CAC jumped 1.8%.

U.S. Treasury prices softened, as the benchmark 10-year Treasury yield stepped higher to 0.703%.

Spot gold price rebounded $8 (+0.5%) to $1,717 an ounce halting a three-day decline.

Oil prices rebounded despite a build of 7.9 million barrels in U.S. crude-oil stockpiles last week as reported by the Energy Information Administration. U.S. WTI crude oil futures (July) gained 2.7% to $33.71 a barrel.

On the forex front, the ICE U.S. Dollar Index dropped 0.4% on day to 98.47, the lowest level since March 30.

EUR/USD advanced 0.6% to 1.1076, posting a three-day rally. Official data showed that the eurozone's Economic Confidence Index bounced to 67.5 in May (70.6 expected) from 64.9 in April. Later today, the bloc's CPI data for May will be released (+0.1% on year expected).



More from Indices

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.