Look For Market Volatility To Continue In The Coming Week
The market volatility seen
all throughout September is likely to continue next week as investors get the
first presidential debate of this election season, and will also be looking
ahead to the final non-farm payrolls report ahead of the November elections.
Despite the extreme ups
and downs and reversals seen this past week the S&P 500 lost just 0.6% in
total for the week. For the month of September it is 5.8% lower.
Next week’s non-farm
payrolls is expected to see growth of less than 1 million jobs, but the
unemployment rate is also expected to edge down to 8.2% from the current
reading of 8.4%. Those aren’t great numbers, but the markets should accept them
if they come in as expected.
There will likely be a
closer eye on the Presidential debates, particularly if there is a feeling that
one candidate has become heavily favored over the other at the conclusion of
the debates. If Trump looks to be taking the lead a renewed rally in equity
markets could be the result, but if Biden seems to be taking the lead stocks
could tank and investors will flock to bonds instead.
If we see a further
pullback in markets in the coming week technicians say to keep an eye on the
3,107 level in the S&P 500, which is the 200-day moving average and should
be highly supportive. The last time the level was tested was in June, and both
times the market pulled back to that level buyers stepped in. If the level is
tested again investors hope buyers will step in again too.
U.S. Daily Market Review
The S&P-500 and the Dow partly fell today, adding to their longest trend of the last year. This comes amid higher issues about the outlook for the economy.At 10:07 a.m. ET, the Dow Jones Industrial Average slipped 9.09 points, or 0.15%, at 26,776.35.The S&P-500 dropped 1.50 points, or 0.05%, at 3,245.09. The Nasdaq Composite secured 25.38 points, or 0.24%, at 10,697.65, rallied a 1% jump in Apple Inc AAPL.O.Costco Wholesale Corp COST.O tumbled 2.6% as the whole seller marked high coronavirus-related costs for another straight quarter.Boeing Co BA.N added 2.4% after Europe's chief aviation safety announced that the planemaker's grounded 737 MAX could receive regulatory approval to resume flying in November.Treasury yields declined amid falling economic data.The yield on the benchmark 10-year Treasury note lost around 1 basis point.The yield on the 30-year Treasury bond also minorly fell by 1.394%. These slips took place after the Commerce Department reported that U.S. durable goods orders increased just 0.4% in August, versus a Dow Jones estimate of an incline of 1.8%.
European Daily Market Review
The main European indexes are into retreat with shares in France losing most. In Paris CAC-40 slipped 1.54% while Germany's DAX dropped 1.51% and London's FTSE-100 tumbled 0.30%.The falling mode is taking place as the market is focused on the coronavirus developments and the prospects of economic recovery.A benchmark measuring European banking stock sunk to its bottom intraday point since its creation in 1991. This is mainly the result of the advancing new Covid-19 cases.The Stoxx Europe-600 Banks Index briefly dropped around 1.7%, with the U.K.’s HSBC Holdings Plc, France’s BNP Paribas SA and Italy’s Intesa Sanpaolo SpA among the biggest losers of the day.BMW and two of its U.S. subsidiaries have decided to pay a fine of $18 million over allegations of inflating sales volumes in order to be able to gain again corporate bond trust.Germany’s Lufthansa slipped 5.4%.
Crude Oil Prices Surge
Oil prices rallied this morning but are on a pattern for a weekly retreat because of higher issues about advancing numbers globally of coronavirus infections.Now, oil trades at $40.350, which is an incline of $0.188 or 0.47% from the previous close of 40.162.The daily trading range is from $40.120 to 40.611, while the trading volume is 10.568K.Furthermore, Brent is about to register a loss of around 2.5% this week with U.S. crude on a trend for a decline of about 1.5%. Libyan oil terminals reopened and cargoes are likely to be lifted in the coming days. In the United States, which is the largest economy and oil consumer, registered the highest death toll from the coronavirus pandemic. Additionally, nemployment claims unexpectedly jumped last week indicating in an economic recovery is weak and pushing down fuel demand.
Asian Daily Market Review
Asian markets are heading broadly higher on Friday morning
after Wall Street finished the day in positive territory for the second time
this week, encouraging investors to think that the September rout in the
markets might finally be coming to an end.
Australia’s S&P/ASX 200 is leading the way higher as it’s
trading up by 1.6% heading into the afternoon in Sydney. Shares of the big four
banks are leading the way with a strong rally as ANZ trades up by 5.2%, NAB
adds 6.2%, Commonwealth Bank is advancing 3.6%, and Westpac outperforms as it
trades 6.8% higher. The gains are coming after Australia’s Treasurer has unveiled
plans to overhaul the laws governing mortgages, personal loans, credit cards
and payday lending.
In Japan the Nikkei is 0.8% higher as the Yen continues in
its retreat versus the U.S. dollar. Shares of Softbank Group are trading up by
1.9%, Sony has a 0.4% gain and Toyota is also trading 1.9% higher. Among other
exporters Panasonic is adding 0.6%, but Canon is bucking the rising trend and
Mainland China’s Shanghai Composite is lagging the region,
but still adding 0.2%, while the smaller cap Shenzhen Composite trades 0.3%
higher. In Hong Kong the Hang Seng is outpacing the mainland as it trades up by
South Korea’s Kospi has snapped a three session losing
streak to trade 0.6% higher, and in Taiwan the Taiex has a gain of 0.9%.
Southeast Asian markets are also trading broadly higher with
the Straits Times in Singapore advancing 0.5%, Malaysia’s KLCI adding 0.7%, and
the Jakarta Composite in Indonesia opening flat.
Tesla's Long Game Disappoints Investors On Battery Day
After dropping 8.6% on Wednesday shares of Tesla looked
ready to give up more than 6% on Thursday as well in the wake of investor
disappointment following the Battery Day event that went off Tuesday after the
market close. And yet somehow by the close on Thursday the stock had bounced to
close up by 2%.
The problem with the Battery Day event was that Tesla was
long on promises, but short on any real deliveries. Their innovation and
foresight is impressive, and promises to see Tesla pull so far ahead of its
competition that it could take decades for any company to unseat them as the
top electric automobile play.
Those innovations promise to make batteries both smaller and
cheaper, while also increasing their effective range significantly.
Unfortunately the company didn’t unveil a “million mile” battery as investors
Tesla also promised to reduce the cost of the base Model 3
to $25,000, which could be as ground-breaking as when Henry Ford created the
assembly line and sold 15 million Model T Fords. However Tesla founder and CEO
Elon Mush also said it could take up to three years before the price of the
Model 3 can be reduced that much.
Basically investors, who typically look out no more than a
year, just couldn’t stomach the extremely long time horizon Tesla is working
to. And yet if you look back in history there are other notable companies that
have played just such a long game, Apple and Amazon both come to mind, and look
where those companies and their stocks are today.
U.S. Daily Market Review
Wall Street’s main indexes started on a lower side today amid an unexpected rally of the official weekly jobless claims. This indicating in that the labor market recovery was cooling and that more fiscal support would be required for the economy.The Dow Jones Industrial Average declined 47.04 points, or 0.18%, at the open to 26,716.09. The S&P-500 fell 10.78 points, or 0.33%, at 3,226.14, while the Nasdaq Composite tumbled 81.97 points, or 0.77%, to 10,551.02 at the opening bell.Sales of existing homes surged 2.4% to a seasonally adjusted annualized rate of 6 million units, according to the National Association of Realtors. In fact, sales rose 10.5% versus to the numbers of August 2019. This represents the strongest pace since December 2006, before the Great Recession. The Labor Department reported today that initial jobless claims for the week ending Sept. 19 came in at 870,000, on seasonal basis.Economists polled by Dow Jones expected first-time claims at 850,000, a minor loss from the previous week’s 860,000.
European Daily Market Review
European markets are into a retreat today with shares in London losing the most. The FTSE-100 slipped 0.88% while in Paris CAC-40 dropped 0.52% and Germany's DAX fell 0.26%. The pan-European Stoxx 600 pared its earlier losses but slipped 0.4% by afternoon trading. Retail stocks fell 1.3% to lead the falling pattern while autos rallied 1%.Britain’s opposition Labour Party accused the London of being ineffective in assisting the business, which is affected by the coronavirus pandemic.In addition, the U.K. government will extend the length of bounce back loans for businesses, introduced to mitigate the impact of the COVID-19.
The USD Into A Rising Path
The USD advanced during the European trading hours amid issues over the global economic recovery and possibility of a second-wave of Covid-19 infections.Presently, the USD versus the Euro trades at 0.85990000 EUR, which is very minor rise of only 0.00030000 (+0.03%) from the previous close of 0.85960000.The daily trading range is form 0.85510000 to 0.86520000, while the trading volume is 2.452K.Moreover, the USD Index, which measures the greenback against a basket of six other currencies, secured 0.1% at 94.505, around levels last seen two months ago.The USD is preserving its ground and there are some serious concerns over the economic recovery and fragile amid rising Covid cases. The USD serves as a store value currency in this dynamic and partly insecure times.France also decided to tighten restrictions on social gatherings on Thursday, announcing a 10 PM curfew on bars and restaurants as well including other restrictions.
Gold Prices Further Decline
Gold prices further retreated this morning during the Asian hours with rising rate of the USD.The USD was boosted by the higher rate of the USD with advancing U.S. housing market, and issues over risk in other markets.Now, the yellow metal versus the USD trades at $1852.32, which is a loss of $10.08 or 0.54% from the previous close of 1862.40.The daily trading range is from $1848.89 to 1868.83, while the trading volume is 276.89K.There is a general decline in the European business activities, alongside issues expressed by U.S. state and U.S. Federal Reserve officials about the need for further economic measures.COVID-19 cases are still on a rally across Europe, with fears that some E.U. countries are now entering into a second wave.
Asian Daily Market Review
Markets across Asia are falling Thursday following the
overnight rout on Wall Street that saw technology shares getting hammered lower
once again. In coronavirus developments Europe continues seeing a rise in
cases, while Johnson & Johnson became the fourth pharmaceutical company to
announce phase three trials of a coronavirus vaccine.
In Australia the S&P/ASX 200 is 1% lower, erasing much
of the gains made in the previous session although it is off its lowest levels
of the day. Shares of the big four banks are falling again too, with ANZ down
1.1%, NAB falling 0.5%, Commonwealth Bank dropping 1%, and Westpac trading 0.9%
In mainland China the Shanghai Composite has opened to a 1%
loss, and the smaller cap Shenzhen Composite is trading 1% lower as well.
Meanwhile in Hong Kong the Hang Seng is leading losses as it’s dropped 1.5%.
Japan’s Nikkei is lower for a second consecutive session,
losing 0.6% despite the Yen weakening against the U.S. dollar and providing
some support for Japan’s export sector. Shares of Softbank Group are sliding
2.7% lower, while Sony is edging 0.1% lower and Toyota has a loss of 1.3%.
In South Korea the Kospi continues to be one of the worst
performing Asian markets as it’s trading down 1.5% today and adding to losses
of 2.5% over the past two sessions. In Taiwan the Taiex has a 1.5% loss today
Southeast Asian markets are mostly lower today as well with
Indonesia’s Jakarta Composite 1.4% lower, and Singapore’s Straits Times losing 1%,
while the KLCI in Malaysia is edging up by less than 0.1%.
Natural Gas Prices Are On Fire
Natural gas, which was sitting at a seven-week low on
Monday, has roared back Wednesday, adding 16% and closing above the closely
watched $2.00 level. That puts the energy at a one-week high, leaving plenty of
upside potential for prices going forward.
Prices apparently found support from two directions at once.
On the one hand the disruptions caused by maintenance and tropical storm Beta
has impacted production, and on the other forecasts for colder weather have
traders hopeful that demand will be rising in coming weeks. While tropical
storm Beta has passed beyond the Gulf coast, flooding in its wake in the
Houston area has greatly reduced the flow of natural gas.
That pinching of supply comes as data shows U.S. production
of natural gas is at a two-year low. That helped Wednesday’s rally, but is
really a negative since the falling production is a function of congestion at
storage facilities and a significant drop in demand for the resource.
There is good news for the coming months however. Data also
shows less than five U.S. cargoes being cancelled for loading in November, which
should lead to production ramping back up to full capacity in October.
Even with the 16% jump on Wednesday October natural gas futures
are down 19% since the start of September as demand falters on the shift away
from summer cooling demands.
Winter is right around the corner though, and traders are
preparing for a colder than usual winter, with prices for the December contract
of natural gas trading at a premium of more than 50% against the October
U.S. Daily Market Review
The main U.S. indexes are red with S&P-500 and the Nasdaq dropping.This comes as the numbers indicated in that the business activity fell down in September, while a record high for Nike following solid quarterly earnings reports.At 10:03 a.m. ET, the Dow Jones Industrial Average added 70.47 points, or 0.26%, at 27,358.65. On the other side, the S&P-500 slipped 2.26 points, or 0.07%, at 3,313.31, while the Nasdaq Composite dropped 46.23 points, or 0.42%, at 10,917.41.Stock price of Tesla Inc TSLA.O lost 5.4% after Chief Executive Officer Elon Musk failed to keep his promise to reduce electric vehicle costs at the much awaited "Battery Day" event on Tuesday.Oracle Corp ORCL.N also tumbled 1% after a the leading Chinese newspaper announced that Beijing is not expected to approve a proposed deal by the software maker and Walmart WMT.N for ByteDance's TikTok.
The GBP Into A Massive Retreat
The GBP extended its dropping pattern to a two-month bottom as the market is focused over the possibility of a new lockdown in the country.Presently, the GBP versus the USD trades at $1.2749, which is a very minor incline of $0.00188 or 0.15% from the previous close of 1.27302.The daily trading range is from $1.2675 to 1.2759, while the trading volume is 319.158K.Further stimulation to the downfall added Foreign Secretary Dominic Raab after reporting that he can’t rule out a nationwide shutdown. In the meantime, the government bonds advanced, sending the yield across tenors down about two basis points.Earlier today, Prime Minister Boris Johnson instructed new rules to curb the rally of the new coronavirus cases, including a 10 p.m. closing time for pubs and restaurants and a recommendation for office workers to work from home, in case that is possible.
European Daily Market Review
European markets are into a higher side today with shares in London leading the region. The FTSE-100 added 2.31%, in Paris CAC-40 gained 1.92% and Germany's DAX inclined 1.71%. The Stoxx Europe 600 index secured 1.1% to 361.58, after rising 0.2% on Tuesday. The euro EURUSD, -0.11% lost 0.1% versus the USD, while the pound was even weker GBPUSD, -0.09%, dropping 0.3%. Berlin agreed with Finance Minister Olaf Scholz’s draft budget for next year which envisages net new debt of 96.2 billion euros ($112.43 billion) to finance further measures to handle the issues resulted from the pandemic.Portugal’s budget deficit jumped to a whole 10.5% of its gross domestic product (GDP) in the second quarter of 2020. This compares to 2.2% versus last year due to the impact of the coronavirus pandemic, according to the official data from Wednesday.The National Statistics Institute also announced that the country is likely to mark a budget deficit of 7% of GDP in 2020 versus to the previous year.