NEW YORK (Dow Jones) – Worsening concerns over the US-China dispute thwarted Wall Street on Thursday. The Dow Jones index turned negative in late business after US President Donald Trump announced that he would provide information on his response to China’s Hong Kong policy on Friday. On Wednesday, the US government deprived the Hong Kong Chinese Special Administrative Region of its special status under US law, thereby responding to a security law planned in Beijing, which critics believe should massively violate the rights of autonomy. China sharply condemned the decision.
The Dow Jones index lost 0.6 percent to 25,401 points. The S&P-500 lost 0.2 percent and the Nasdaq composite fell 0.5 percent. There were 1,270 (Wednesday: 2,364) course winners and 1,697 (607) losers. 42 (43) titles closed unchanged.
Before the setback in late trading, investors had become increasingly buyer-friendly. There was no euphoria, however. The first drop in unemployment benefit recipients since March was seen positively. This is a further signal for a possible rapid economic recovery. The number of initial applications also fell, from 323,000 to 2.123 million. Economists had anticipated a drop to 2.05 million. The data support the hope of a possible end to the rapid job cuts, it said. US GDP fell somewhat more clearly in the first quarter than initially reported. The order intake of durable goods has slumped, but this was expected.
In addition, the prospect of lush liquidity in the global markets through the programs of the states and of the United States also helped Monetary policy of central banks.
Euro is advancing significantly – oil prices are picking up
The euro expanded its previous day’s gains against the dollar and rose to $ 1.1074 in late trading – the highest level since the end of March. The dollar came under pressure with the data. The dollar index lost 0.5 percent. Participants also referred to the rescue package proposed by the EU Commission to justify the fixed euro. According to MUFG analysts, the euro offers an opportunity for a sustainable recovery of the common currency. “Overall, the EU is now moving in the right political direction,” said analyst Lee Hardman and further: “This helps alleviate short-term downside risks for the euro and at the same time means a firmer foundation for a sustained and more sustainable recovery.”
Economic optimism pushed oil prices up in late business. Before that, the fear of oversupply weighed heavily. It received new food through data from the industry association API on Wednesday and the official oil department data from the U.S. Department of Energy on Thursday, each of which reported a significant increase in U.S. crude stocks. The price of a barrel of the US grade WTI climbed 2.0 percent to $ 33.48. Brent went up 0.9 percent to $ 35.04.
The gold price rose 0.6 percent to $ 1,719, above the important $ 1,700 mark below which it had slipped the previous day. Especially the escalation of the situation in Hong Kong supports the precious metal, it said. The US data had no impact on the gold price.
The US bonds weaken with the economic data. The yield on ten-year stocks rose by 1.6 basis points to 0.70 percent.
HP by numbers under pressure
The stocks of the printer manufacturer HP tended to fall sharply in the individual stocks. Sales disappointed in the company’s second quarter, while adjusted earnings per share exceeded market expectations. HP was also pessimistic with regard to the current third business quarter. JP Morgan analysts have lowered the stock to “Neutral” from “Overweight”. For the titles, it went down by 12.3 percent.
In contrast, the Boeing share gained 0.2 percent. The US aircraft manufacturer has resumed production of the 737 Max, which is subject to a worldwide flight ban. The crisis-shaken company announced that this had started again at a “low” level. Production had been suspended since January.
Walt Disney fell 3.9 percent. Imperial Capital analyst David Miller believes the stock has risen “too fast too high”. The maintenance company reopened its park in Orlando on Wednesday. The share had risen by over 20 percent in the past four weeks. Miller now lowers the rating to “Underperform”.
Dollar Tree rose 11.6 percent. The discount chain of stores recorded like-for-like sales growth of 7 percent in the first quarter. CFO Kevin Wampler is currently seeing a positive development as government stimulus measures have filled consumers’ pockets.
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INDEX last +/-% absolute +/-% YTD
DJIA 25,400.64 -0.58 -147.63 -10.99
S & P-500 3,029.73 -0.21 -6.40 -6.22
Nasdaq Comp. 9,368.99 -0.46 -43.37 4.42
Nasdaq-100 9,416.71 -0.27 -25.33 7.83
US bonds
Term yield bp to vt yield vt +/- bp ytd
2 years 0.16 -2.0 0.18 -104.2
5 years 0.33 -1.1 0.34 -159.1
7 years 0.53 1.2 0.52 -171.3
10 years 0.70 1.6 0.69 -174.4
30 years 1.46 1.7 1.44 -160.8
CURRENCIES last +/-% U “Wed, 5:11 p.m.% YTD
EUR / USD 1.1074 + 0.60% 1.1021 1.0977 -1.3%
EUR / JPY 119.19 + 0.52% 118.86 118.34 -2.2%
EUR / CHF 1.0680 + 0.22% 1.0670 1.0638 -1.6%
EUR / GBP 0.8990 + 0.15% 0.8979 0.8985 + 6.2%
USD / JPY 107.63 -0.09% 107.82 107.81 -1.1%
GBP / USD 1.2318 + 0.46% 1.2274 1.2216 -7.1%
USD / CNH (offshore) 7.1689 -0.17% 7.1730 7.1865 + 2.9%
Bitcoin
BTC / USD 9,449.01 + 4.31% 9,149.76 9,193.01 + 31.1%
ROHOEL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 33.48 32.81 + 2.0% 0.67 -43.1%
Brent / ICE 35.04 34.74 + 0.9% 0.30 -44.8%
METALLE last day before +/-% +/- USD% YTD
gold (Spot) 1,718.82 1,709.25 + 0.6% +9.57 + 13.3%
Silver (spot) 17.33 17.25 + 0.5% +0.08 -2.9%
Platinum (spot) 840.10 824.25 + 1.9% +15.85 -12.9%
Copper future 2.42 2.38 + 1.6% +0.04 -13.9%
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DJG / raz
(END) Dow Jones Newswires
May 28, 2020 16:11 ET (20:11 GMT)
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