Asia Morning July 30

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By :  ,  Financial Analyst

Asia Morning: Tech Giants Gains as CEOs Testify in Congress

On Wednesday, U.S. stocks closed higher. The Dow Jones Industrial Average rose 160 points (+0.61%) to 26539, the S&P 500 advanced 40 points (+1.24%) to 3258, and the Nasdaq 100 jumped 130 points (+1.24%) to 10662.

Nasdaq 100 Index: Daily Chart

Source: GAIN Capital, TradingView

Investors were encouraged by the Federal Reserve's stance to keep supporting economic recovery amid the coronavirus pandemic.

Banks (+2.92%), Health Care Equipment & Services (+2.51%) and Transportation (+2.34%) sectors performed the best. L Brands (LB +35.36%), Advanced Micro Devices (AMD +12.54%), CH Robinson Worldwide (CHRW +9.33%) and Gap Inc (GPS +8.35%) were top gainers.

Tech giants stocks - Amazon (AMZN +1.11%), Apple (AAPL +1.92%), Facebook (FB +1.38%) and Alphabet (GOOG +1.45%) - gained as their CEOs testified at a Congress antitrust hearing in defense of their business practices.

On the technical side, about 54.6% (55.0% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 67.5% (75.4% in the prior session) were trading above their 20-day moving average.

As expected, the Federal Reserve kept its benchmark interest rates unchanged near zero. The central bank said in a statement: "The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, (...) The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world."

Later today, U.S. second-quarter GDP readings will be released (an annualized declining rate of -34.8% on quarter expected). The Labor Department will report Initial Jobless Claims for the week ended July 25 (an increase to 1.430 million expected).

European stocks closed mixed. The Stoxx Europe 600 Index was little changed, Germany's DAX 30 edged down 0.10%, while France's CAC 40 gained 0.60%, and the U.K.'s FTSE 100 closed flat.

The benchmark U.S. 10-year Treasury yield was little changed at 0.581%.

Spot gold price advanced $12.00 (+0.62%) to $1,970, a fresh record close. Goldman Sachs has raised its gold price forecast for the next 12 months to $2,300 an ounce from $2,000 previously. However, spot silver price was down for a second day as it decline 0.5% to $24.31 an ounce.

Oil prices climbed after the U.S. Energy Information Administration reported an unexpected reduction of 1.2 million barrels in crude-oil stockpiles last week. U.S. WTI crude oil futures (September) rebounded 0.6% to $41.27 a barrel.

On the forex front, the U.S. dollar resumed its weakness as the Federal Reserve pledged its continuous support to U.S. economic recovery. The ICE U.S. Dollar Index sank 0.5% to 93.26.

EUR/USD charged higher challenging the key level of 1.1800, a level last seen in early October.

GBP/USD struck against the key level of 1.3000 on the upside, its highest level since March. The Bank of England reported 40,000 Mortgage Approvals for June, higher than 35,000 expected.

USD/JPY dipped below 105.00.

AUD/USD advanced to 0.7190, the highest level since early April. Official data showed that Australia's 2Q Consumer Prices declined 0.3% on year (vs -0.4% expected) and fell 1.9% on quarter (vs -2.0% expected).

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