Asia Morning July 17

Asia Morning: U.S. Stocks Take a Breather

On Thursday, U.S. stocks closed in negative territory. The Dow Jones Industrial Average fell 135 points (-0.50%) to 26734, the S&P 500 dropped 11 points (-0.34%) to 3215, and the Nasdaq 100 was down 75 points (-0.70%) to 10626.

Nasdaq 100 Index: Daily Chart

Source: GAIN Capital, TradingView

U.S. Labor Department reported that Initial Jobless Claims amounted to 1.300 million for the week ended July 11 (1.250 million expected). In other words, coronavirus lockdowns have led to a total of 51 million job losses across the country.

Prior to the session, China's benchmark Shanghai Composite Index slumped 4.50%, the largest one-day loss since early February, and Hong Kong's Hang Seng Index lost 2.00%

Software & Services (-1.53%), Consumer Services (-1.48%) and Real Estate (-1.19%) sectors lost the most.

Travel-related stocks such as Norwegian Cruise Line (NCLH -15.62%), Carnival Corp (CCL -9.73%), Royal Caribbean Cruises (RCL -7.57%) and American Airlines (AAL -7.37%), which were top gainers in the prior session, led the market lower Thursday.

On the technical side, about 52.0% (46.8% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 82.8% (65.1% in the prior session) were trading above their 20-day moving average.

U.S. official data showed that Retail Sales jumped 7.5% on month in June (+5.0% expected).

Due later today are reports on Housing Starts (an increase in annualized rate to 1.180 million units in June expected) and the University of Michigan's Consumer Sentiment Index (July preliminary reading expected at 79.0).

European stocks also ended in the red. The Stoxx Europe 600 Index eased 0.47%. Germany's DAX 30 slipped 0.43%, France's CAC 40 dropped 0.46%, and the U.K.'s FTSE 100 was down 0.67%.

The benchmark U.S. 10-year Treasury yield sank back to 0.614% from 0.629% Wednesday.

Spot gold price retreated $13.00 (-0.7%) to $1,797 an ounce halting a three-session rally.

Oil prices lacked upward momentum amid muted market sentiment. U.S. WTI crude oil futures (August) settled 1.1% lower at $40.75 a barrel.

On the forex front, the ICE U.S. Dollar Index rebounded 0.3% on day to 96.30, snapping a four-day losing streak.

EUR/USD marked a day-high of 1.1443 before closing down 0.2% to 1.1385. The European Central Bank kept its monetary policy unchanged as expected. ECB President Christine Lagarde said the central bank currently expects to spend the full amount of its pandemic bond-buying program.

GBP/USD fell 0.2% to 1.2556. Official data showed that U.K. ILO jobless rate remained at 3.9% in the three months to May (4.2% expected), compared with the three months to April.

USD/JPY rose 0.4% to 107.32.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.