Asian Morning: US Market Sees Rotation Out of Tech Stocks

Amid states reopening their economy, investors moved out of technology stocks and into economically sensitive value stocks...

Trading floor 2

On Tuesday U.S. stocks closed lower. Amid states reopening their economy, investors moved out of technology stocks and into economically sensitive value stocks.

The Dow Jones Industrial Average eased 32 points (-0.1%) to 24,101, the S&P 500 slipped 15 points (-0.5%) to 2,863, while the Nasdaq 100 shed 160 points (-1.8%) to 8,677.


Source: GAIN Capital, TradingView


Media (-2.36%), Health Care Equipment & Services (-2.3%) and Pharmaceuticals Biotechnology & Life Sciences (-2%) sectors lost the most. 

Cincinnati Financial Corporation (CINF -12.5%), Arconic (ARNC -10.4%), United Parcel Service (UPS -6.0%) were among the biggest losers.
 
On the other hand, Harley-Davidson (HOG +15.2%),  Norwegian Cruise Line (NCLH +14.4%), Alaska Air (ALK +13.4%) and American Airlines (AAL +12.4%) performed the best.
 
Ford Motor (F +4.1%) said in after-market hours that its second-quarter loss would widen to over $5 billion from $2 billion in the first quarter due to the coronavirus pandemic.
 
On the technical side, about 25.6% (23.0% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 91.9% (80.0% in the prior session) were above their 20-day moving average.

U.S. official data showed that Wholesale Inventories (preliminary reading) fell 1.0% on month in March (-0.4% expected). The Conference Board's Consumer Confidence Index dropped to 86.9 in April (87.0 expected). 

Later today, the U.S. government will report first-quarter GDP growth (an annualized rate of -3.9% on quarter expected). The Federal Reserve is expected to keep its benchmark interest rate unchanged at 0.00%-0.25%.

U.S. Treasury Secretary Mnuchin said he expects the U.S. economy to pick up in June and July before bouncing further by August and September.

European stocks charged higher, with the Stoxx Europe 600 Index advancing 1.7%. Germany's DAX rose 1.3%, the U.K.'s FTSE 100 increased 1.9% and France's CAC was up 1.4%.

U.S. Treasury prices rebounded before the Fed concluded its two-day monetary policy meeting. The benchmark 10-year U.S. Treasury yield dropped to 0.610% from 0.655% Monday.

Spot gold was down for a third session as it declined 2 dollars to $1,708 an ounce.

Following a 25% plunge in the prior session, U.S. WTI crude oil futures (June) fell a further 3.4% to $12.34 a barrel, and Brent crude oil futures gained 2.5% to $20.48 a barrel.

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.