The US stock market rose on the 24th. Buying prevailed ahead of major central bank policy decisions and corporate earnings releases.
S&P 500 Stock Index 4554.6418.300.40% Dow Jones Industrial Average 35411.24183.550.52% Nasdaq Composite Index 14058.8726.060.19%
This week, the US Federal Open Market Committee (FOMC) and the European Central Bank (ECB) will hold policy-making meetings. Disappointing economic data from both the U.S. and the eurozone on Thursday bolstered speculation that the rate hike cycle was nearing its end to stave off a recession. More than 500 companies around the world, including Microsoft, Alphabet, and Meta Platforms, will announce their financial results within the week.
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“There will be plenty of opportunities this week to test the rally in U.S. equities that started on Oct. 12,” said John Stoltzfuss, chief investment strategist at Oppenheimer Asset Management. “Traders will be looking further to see where the market is headed,” he said.
The Dow Jones Industrial Average rose for the 11th straight day, its longest streak since 2017. The S&P 500 stock index hovered around 4550. The Nasdaq 100 Index, which adopted a new weighting formula aimed at reducing the contribution of large-cap stocks, underperformed on this day.
Tesla rose after strong sales outside the US and China. Apple responded to the Bloomberg News report. The company said it aims to keep iPhone shipments flat year-on-year. Chevron, which posted better-than-expected earnings, was also high.
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Investors in U.S. stocks have largely shrugged off the positive surprises in corporate earnings so far, suggesting the good news is already priced in, said strategists at Bank of America (BofA).
“This suggests higher position risk, and the good news is already priced in,” a BofA team led by Savita Subramanian said in a report to clients Wednesday.
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Chris Larkin, managing director of Morgan Stanley’s E*Trade Financial, said tech companies “may be key” to whether or not the current bullish view on stocks continues ahead of big company earnings reports.
“We expect mixed results for the big tech stocks,” said James Demato, chief investment officer at Main Street Research. “The real test is the companies that are investing heavily in artificial intelligence. Investors want to see if they can post strong enough earnings to support their share prices, which have surged in recent months.”
US Treasuries
US Treasuries fell. Selling was mainly in 2-year bonds. A large sell-off in futures trading before the auction of the same-year bonds was a volatile move.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.92%2.50.64% US 10-year bond yield 3.87% 3.80.98% US 2-year bond yield 4.91%7.81.60% US Eastern Time 16:54
foreign exchange
In the foreign exchange market, the dollar index moved slightly. Meanwhile, the euro and pound fell. Euro zone and UK Purchasing Managers Indexes (PMIs) fell short of expectations, fueling fears of an economic downturn.
The yen rose against the dollar for the first time in five trading days. Bloomberg’s report that the Bank of Japan is likely to significantly revise its price outlook for fiscal 2023 has prompted buying. The yen rose to ¥140.76 at one point.
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Bloomberg Dollar Index 1215.950.630.05% USD/JPY ¥141.51-¥0.22-0.16% EUR/USD$1.1064-$0.0060-0.54% 16:55 US Eastern Time
“Our view is waning that the BOJ will adjust yield curve control (YCC) at its policy meeting as early as this week,” said Lee Hardman, senior currency analyst at Mitsubishi UFJ Financial Group (MUFG). Due to the surprise policy change, the dollar is expected to drop to 136 yen against the yen by the end of this quarter.
crude
New York crude oil futures rose for the third day in a row, hitting a three-month high. Despite expectations of further US rate hikes, signs of tightness in the oil market led to buying, above key technical levels.
The Organization of the Petroleum Exporting Countries (OPEC) and non-member oil producing countries “OPEC Plus” began to implement production cuts, and the world supply became tight, so New York crude oil temporarily rose to the $ 79 per barrel level. Buying was also prompted by news that some facilities at ExxonMobil’s Baton Rouge, Louisiana, refinery could shut down for weeks.
New York crude has broken above its 200-day moving average, which has been a solid resistance since August last year.
On the demand side, China’s slow recovery continues to be a headwind for industrial commodity prices, but the country signaled its intention to implement additional stimulus measures.
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“The Chinese officials’ remarks disappoint some, but the fact that they are going to provide some stimulus is good news for oil, which is not yet priced in the oil market,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
September West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) rose $1.67, or 2.2%, to close at $78.74 a barrel. London ICE’s North Sea Brent September delivery rose $1.67/mt to $82.74/mt.
Money
The New York gold market continues to fall. There was a lot of quarreling as they were eager to wait for policy announcements from the FOMC and ECB. On a weekly basis, the gold spot had risen for three consecutive weeks until last week.
Spot prices were down 0.3% to $1,956.25 an ounce as of 2:37 pm New York time. December futures on the New York Mercantile Exchange (COMEX) fell $4.30, or 0.2%, to close at just $2001.
Original title:Stocks Kick Off Busy Earnings Week With Mild Gains: Markets Wrap(excerpt)
Treasuries Bear-Flatten After Futures Block Trade, Auction
Euro Hits Two-Week Low After PMI Data; Yen Rebounds: Inside G-10
Oil Hits Three-Month High Amid Tighter Supplies, Refinery Outage
Gold Wavers as Traders Await Rate Signals From Central Banks
2023-07-24 21:02:00
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