U.S. Dollar Continues Lower For Eighth Consecutive Week
The U.S. dollar stumbled again Friday, giving it an eighth consecutive
week of losses as investors continue looking elsewhere around the globe for
currencies whose governments are performing better in the fight against the
coronavirus and its economic impact.
The failure of U.S. lawmakers to pass a new coronavirus
stimulus package before leaving for a three week break did nothing to help
sentiment surrounding the greenback either.
The eight week long drop in the U.S. dollar is its longest
negative run in a decade according to historical data. Friday’s drop came
despite the better than expected reading on core retail sales in the U.S. which
points to a recovery in consumer buying behavior.
Analysts around the world are shunning the U.S. dollar,
claiming that the prospects for the U.S. economy in coming quarters is worse
than nearly every other developed country, primarily due to the failure of U.S.
leaders to effectively manage a response to the pandemic.
The Euro continued to see the best performance against the
U.S. dollar, with EUR/USD rising to the 1.1835 level. The pair still faces
strong resistance at the 1.1900 area it has previously been unable to surpass.
The Pound also remains extremely strong versus the
greenback, with the GBP/USD trading just short of the 1.3100 level. This pair
is facing strong resistance at the 1.3150 handle.
One outlier is the USD/JPY, which has been rising all week,
although Friday saw it get rejected at the 107.00 level and fall back to the
106.50 area by the close. The Yen has been softer this week despite its haven
U.S. Daily Market Review
The S&P-500 retreated away from record levels on Friday.This comes as domestic retail sales growth slowed in July.At 10:00 a.m. ET, the Dow Jones Industrial Average tumbled 71.07 points, or 0.25%, at 27,825.65.The S&P-500 dropped 0.90 points, or 0.03%, at 3,372.53, and the Nasdaq Composite fell 3.31 points, or 0.03%, at 11,039.19.U.S. business inventories are into a weaker side in June as sales continued to accelerate amid pent-up demand.Business inventories declined 1.1% in June after falling 2.3% in May, according to the U.S. Commerce Department.The share price of the Electric auto giant Tesla gained 2.3% after Morgan Stanley upgraded the stock, citing potential in the firm’s battery business.Joe Biden get economic advices from former Federal Reserve Chair Janet Yellen, who ran monetary policy while the Democratic nominee served as vice president.Yellen, now serves as a distinguished fellow at the Brookings Institution.
European Daily Market Review
European markets are into a solid retreat today with shares in London off the most. The FTSE-100 dropped 2.13% while France's CAC-40 retreated 2.12% and Germany's DAX fell 1.24%.The pan-European Stoxx 600 tumbled 0.6%.EasyJet (EZJ.L), British Airways owner IAG (IAG.L) and Ryanair (RYA.L) all lost around 4%.The U.K. has introduced a new 14-day quarantine period on all arrivals from France from Saturday due to the rising rate of coronavirus cases.The euro area marked a large decline in employment on record in the second quarter.The common currency dropped around 2.8% of its jobs in the three months through June.
Gold Prices Tumbled
Gold slipped this morning during the Asian hours over coming signs of a U.S. economic recovery. Presently, the precious market trades at $1943.75, which is a further decline of $7.70 or 0.39% from the previous close of $1951.45.The daily trading range is from 1942.09 to $1962.03, while the trading volume is 170.984K.An earlier regaining path of the price of the USD also crated in some pressure on the precious market.However, the suspension of negotiations for COVID-19 stimulus plans in the U.S. capped gold's losses.Moreover, Washington is very slow is reaching a deal for a COVID-19 stimulus package, curbed investor risk appetite and resulted in falls losses for the gold prices.
Asian Daily Market Review
Asian markets are edging lower on Friday morning after U.S.
lawmakers adjourned until the early September Labor Day holiday without a
stimulus plan approved. The losses also follow a mixed session overnight on
Wall Street in which the S&P 500 failed again to reach a new record high.
Australia’s S&P/ASX 200 is leading gains as its rising
0.3% heading into its afternoon session in Sydney. Shares of the big four banks
are mixed, with ANZ rising 0.5%, Westpac gaining 0.2%, and NAB adding 0.8%,
while Commonwealth Bank has dropped 1.4%. Major miners are also edging up with
BHP advancing 0.4%, and Rio Tinto flat with a gain of less than 0.1%.
In Japan the Nikkei has started flat with a gain of less
than 0.1%. Shares of Softbank are continuing to slide, down 0.5%, but Sony is
trading 1.8% higher. Meanwhile exporters are mostly lower with Toyota falling
1.3% and Panasonic losing 0.6%, but Canon rising 1%.
In mainland China the Shanghai Composite has also opened
flat with a gain of less than 0.1%, while the smaller cap Shenzhen Composite
has gained 0.7%. Over in Hong Kong the Hang Seng is trading 0.2% lower as
shares of Tencent edge higher by 0.2%, but rival Alibaba is down 0.2%.
In South Korea the Kospi is leading losses for the region as
it’s fallen 1.3%, and in Taiwan the Taiex has slipped lower by less than 0.1%.
Southeast Asian markets are falling with the KLCI in
Malaysia and the Straits Times in Singapore both trading 0.4% lower, while the
Jakarta Composite in Indonesia has opened flat.
Gold Looking To Reclaim $2,000
Gold notched a second consecutive winning session Thursday
as it continues to bounce back from the 5% plunge suffered this past Tuesday
following better than expected unemployment numbers. While the 1.19 million
unemployment claims are far worse than pre-COVID levels, it is also a faster
recovery than market watchers have been expecting, and was a blow to haven
Still, the fact that the unemployment claims are so very
high is enough to allow gold to recover quickly from the initial knee-jerk
reaction of traders. In fact, with these uncertain times comes volatility in
markets, so the pullback didn’t come as a large surprise to professional gold
traders and analysts. In fact, some cheered the drop as the profit-taking will
allow for a reset and the beginning of a new leg higher for the gold markets.
Thursday’s move saw December gold add $21.40, or 1.1%, to
close at $1,970.40 an ounce. That leaves gold down more than 3% from last
Friday’s close, making it unlikely gold will avoid a loss this week, however
with one trading day left in the week it wouldn’t be out-of-the-question for
gold to edge back above the $2,000 level before the weekend begins.
Volatility from equity markets could help gold reclaim that
level on Friday, particularly if the weakness in the technology sector
continues to pull markets lower. Also keep an eye on Treasury yields, which
were showing recovery on Tuesday, but have dropped back to prior levels.
Finally, the U.S. dollar will play its part. If weakness from the greenback
resumes, gold will see an easy path higher.
U.S. Daily Market Review
The S&P-500 and Dow dropped as the start of the session as weekly jobless claims tumbled below 1 million last week.The Dow Jones Industrial Average slipped 54.33 points, or 0.19%, at the open to 27,922.51.The Nasdaq Composite secured 14.62 points, or 0.13%, to 11,026.86 at the opening bell.The USD tumbled to its bottom mark in a week against a basket of currencies today.The number of officially unemployed Americans retreated below one million last week for the first time since the start of the COVID-19 pandemic.In reality, initial claims for state unemployment benefits lost 228,000 to a seasonally adjusted 963,000 for the week ended Aug. 8.U.S. Treasury yields are around near five-week highs before the Treasury will sell a record amount of 30-year bonds. The Treasury will sell $26 billion in bonds, up from $22 billion at its last quarterly refunding in May.The Federal Reserve is expected to preserve policy outline that would commit it to low rates for years in order to stimulate the economic activity.
European Daily Market Review
European markets are into a lower side with shares in London losing the most. The FTSE-100 dropped 0.84% while France's CAC-40 slipped 0.06% and Germany's DAX fell 0.04%. The Europe Stoxx 600 declined 0.3% in early morning trades, with most sectors entering into bears market.European stocks slipped while U.S. futures fluctuated on Thursday as a global rally in equities.German yields tumbled off three-week highs hit in the previous session. Benchmark German 10-year government yields lost 1.2 basis points.Russia has been developing its coronavirus vaccine for the past six years.Yesterday, Russia declared that it had registered a coronavirus vaccine, making it the first country to do so.
The USD Further Retreated
The USD further dropped during the early European trading hours. This is taking place amid fading hopes for additional economic stimulus while inflation figures are into a rising trend.Now, the USD versus the Euro trades at $1.1824, which is a very minor incline of $0.00407 or 0.35% from the previous close of 1.17837.The daily trading range is from $1.1777 to 1.1838, while the trading volume is 92.093K. Moreover, the USD Index slipped 0.3% at 93.157. Washington is still not able to come up with a stimulus package in regards to the stimulus measures in reference to Covid-19.Meanwhile, the U.S. President Donald Trump accused Democrats of not willing to negotiate over the package.Furthermore, U.S. victims of Covid-19 topped 166,000 as of Aug. 13, with confirmed cases rallying more than 4% in the past week.
Crude Oil Prices Dropped
Crude oil prices fell this morning after OPEC announced it predicts that demand dropped more than forecasts. In the meantime, the U.S. government data demonstrated a slip in inventories implied in demand is returning despite the coronavirus pandemic.Now, oil trades at $42.410, which is a loss of $0.125 or 0.29% from the previous close of $42.535.The daily trading range is from $42.385 to 42.665, while the trading volume is 5.284K.The Organization of the Petroleum Exporting Countries (OPEC) stated in a monthly report that world oil demand will fall by 9.06 million bpd this year.U.S. fuel demand jumped to 19.37 million barrels per day last week, the highest since March, data from the Energy Information Administration (EIA) showed.Crude inventories retreated around 4.5 million barrels.
Asian Daily Market Review
Asian markets are mostly higher on Thursday in response to
the overnight gains on Wall Street, although Australia is struggling after
reporting an unemployment rate at a 22-year high.
The Australian S&P/ASX 200 is trading down by 0.6% in
response to the employment data, which showed July’s unemployment rate was
7.5%. Shares of the big four banks are falling as a result, with ANZ trading
2.1% lower, NAB down 1.9%, Commonwealth Bank falling 2.4%, and Westpac losing
1.5%. The gold miners are rebounding from losses in the prior session, with
Evolution Mining up 4.1% and Newcrest Mining adding 1.9%.
In Japan the Nikkei is leading gains for the region as it
trades 1.9% higher. Those gains are coming despite Yen strength today, which
would normally weigh on shares of Japan’s exporters. Softbank is trading 3.7%
higher today, while Sony is up 2.5% and Toyota trades with a 1.1% gain. Among
exporters Panasonic is 0.8% lower, but Canon has a 0.2% advance.
In mainland China major indices are basically flat. The
Shanghai Composite has a slight gain of 0.1%, while the smaller cap Shenzhen
Composite trades less than 0.1% lower. Hong Kong’s Hang Seng is also trading
lower by 0.1%, with shares of index heavy weight Tencent trading down 1.1%.
South Korea’s Kopsi is making good gains, up by 0.9% mid-morning,
while in Taiwan the Taiex has a 0.7% gain.
In Southeast Asia markets are mostly higher as well. Singapore’s
Straits Times Index has a solid 1.4% gain, and the KLCI in Malaysia is trading
0.8% higher, but the Jakarta Composite in Indonesia is down by 0.2%.
Will Uber Reclassify Drivers As Employees?
Shares of Uber slid 1.2% lower Wednesday, adding to losses
suffered following last week’s poor earnings, after a California judge ruled
that gig-economy companies like Uber need to classify their workers as
employees, not contract workers.
The decision marks the end of legal battles over the
classification of Uber’s workers stretching back to 2013. The judge gave ten
days before the injunction takes effect, and Uber has already said it will
appeal the decision.
Separately CEO Dara Khosrowshahi said if the ruling stands
Uber will need to temporarily shut down California operations for as long as
several months. “It’s hard to believe we’ll be able to switch
our model to full-time employment quickly,” Khosrowshahi said.
Uber shares began to slide lower last Wednesday ahead
of the ride sharing and food delivery company reporting its quarterly earnings.
Investors must have been prescient as Uber reported a 29% decline in revenues
and a larger than expected loss of $1.02 a share.
As of Wednesday’s close the stock is down more than
15% from the past week, and given the situation there’s little reason to see a
recovery, unless of course Uber’s appeal is accepted. Of course that’s simply
kicking the can down the road, and there’s a very real possibility that
eventually Uber will need to classify its drivers as employees, offering them
benefits such as health insurance and paid time off.
Uber maintains a strong network effect in its drivers,
particularly due to its Uber Eats business, which has thrived during the
pandemic. But the company will need to win its appeal or face massively rising
U.S. Daily Market Review
Stocks secured some ground today, shaking off Tuesday’s losses.At 12:47 p.m. ET, the Dow Jones Industrial Average surged 260.54 points, or 0.94%, at 27,947.45. The S&P-500 gained 46.84 points, or 1.41%, at 3,380.53. The Nasdaq Composite advanced 232.79 points, or 2.16%, at 11,015.61.The financials, materials and energy sectors led the rising path.The stock price of Tesla soared more than 9% after the carmaker reported late Tuesday a five-for-one stock split in a move to make its shares more accessible.Treasury yields jumped today after data indicated in that inflation started to creep back into the economy.The yield on the benchmark 10-year Treasury note gained than 2 basis points to 0.685%.
European Daily Market Review
European markets are into mixed pattern. The FTSE-100 added 1.29% while the CAC-40 added 0.45%. The DAX dropped 0.01%.The pan-European Stoxx 600 secured 0.3% by early afternoon.U.K. economy retreated a record 20.4% in the second quarter of 2020, versus to the previous three months.Shares of Royal Caribbean Group secured 4.4% in premarket trading Wednesday.When Royal Caribbean announced second-quarter results earlier this week, the company said it has liquidity of about $4.1 billion as of June 30.Amazon.com Inc. announced this morning that it will host its first Amazon Accelerate virtual event.
Gold Price On A Large Drop
Gold are into a massive decline this morning during the Asian hours.The precious metal is extending the dropping pattern from the previous sessions in North America and Europe.Now, the yellow metal trades at $1914.11, which is an incline of $3.13 or 0.16% from the previous close of $1910.98.The daily trading range is from $1862.49 to $1929.12, while the trading volume is 340.819K.The demand for riskier assets entered into recovery to a higher rate of the USD and real rates. The USD gained some steam today, adding to the move away from two-year lows.Washington is making some progress towards finally reaching a deal of new stimulus package. U.S. President Donald Trump also stated yesterday that he is “seriously” considering a capital gains tax reduction.Moreover, Russian President Vladimir Putin announced yesterday that a Russian developed vaccine for COVID-19, Sputnik-V, has been given regulatory approval and soon will be on the market.