Asia Morning July 29

Asia Morning: U.S. Stocks Lose Steam

On Tuesday, U.S. stocks ended in the red. The Dow Jones Industrial Average fell 205 points (-0.77%) to 26379, the S&P 500 dropped 21 points (-0.65%) to 3218, and the Nasdaq 100 lost 141 points (-1.33%) to 10532.

Dow Jones Industrial Average: Daily Chart

Source: GAIN Capital, TradingView

Market sentiment was dampened by ongoing political negotiations concerning a new $1 trillion coronavirus stimulus bill proposed by Senate Republicans. And investors exercised caution following mixed quarterly results from large firms.

Materials (-2.18%), Technology Hardware & Equipment (-1.84%) and Energy (-1.75%) sectors performed the worst.

Lamb Weston (LW -11.46%), National Oilwell Varco (NOV -11.01%) and F5 Networks (FFIV -8.77%) were top losers. Meanwhile, McDonald's (MCD -2.49%) and 3M Company (MMM -4.85%) declined after releasing earnings.

On the technical side, about 55.0% (55.4% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 75.4% (76.2% in the prior session) were trading above their 20-day moving average.

Regarding U.S. economic data, the Richmond Federal Reserve Manufacturing Index jumped to 10 in July (5 expected). The Conference Board's Consumer Confidence Index declined to 92.6 in July (95.0 expected).

Reports on Wholesale Inventories (June preliminary reading -0.5% on month expected) and Pending Homes Sales (June annualized rate +15.0% on month expected).

European stocks closed mixed. The Stoxx Europe 600 Index rebounded 0.42%, the U.K.'s FTSE 100 gained 0.40%, while France's CAC 40 declined 0.22%, and Germany's DAX 30 ended flat for a second day.

The benchmark U.S. 10-year Treasury yield declined to 0.582% from 0.609% Monday.

Spot gold price marked another record close at $1,958 an ounce after retreating from an intraday high at $1,962. Spot silver price swung down to $22.30 an ounce before settling at $24.42, down 0.7%.

U.S. WTI crude oil futures (September) reversed course to the downside falling 1.4% to $41.04 a barrel.

On the forex front, the U.S. dollar showed signs of stabilization after its recent plunge, as traders widely regarded the decline as overdone. The ICE U.S. Dollar Index added 0.1% to 93.73 halting a seven-session losing streak. Later today, the Federal Reserve is expected to keep its benchmark interest rates unchanged at 0.00%-0.25%.

EUR/USD lost steam after marking the highest level since September 2018, as it declined 0.3% to 1.1715.

GBP/USD advanced 0.4% to 1.2931, extending its winning streak to an eighth session.

USD/JPY dropped 0.3% to test the support at the 105.00 key level.

Meanwhile, AUD/USD managed to edge up 0.1% to 0.7157.

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