Asia Morning July 31

Asia Morning: U.S. Market Dragged by Record GDP Slump

On Thursday, U.S. stocks closed mixed. The Dow Jones Industrial Average retreated 225 points (-0.85%) to 26313, the S&P 500 dropped 12 points (-0.38%) to 3246, while and the tech-heavy Nasdaq 100 advanced 52 points (+0.49%) to 10715.

S&P 500 Index: Daily Chart

Source: GAIN Capital, TradingView

U.S. official data showed that gross domestic product (GDP) shrank at an annualized rate of 32.9% in the second quarter, the most on record. Initial Jobless Claims rose to 1.434 million for the week ended July 25 (1.445 million expected, 1.422 million in the prior week). Both pieces of data helped in dampening market sentiment.

Semiconductors & Semiconductor Equipment (+2.22%), Household & Personal Products (+1.69%) and Transportation (+1.14%) sectors performed the best, while the Energy (-4.1%), Automobiles & Components (-3.12%) and Banks (-2.55%) sectors were laggards.

On the technical side, about 57.0% (54.6% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 80.8% (67.5% in the prior session) were trading above their 20-day moving average.

In after-market hours, Apple (AAPL), Amazon.com (AMZN), Alphabet (GOOGL) and Facebook (FB) saw their share prices rise after posting upbeat earnings results.

European stocks closed in the red. The Stoxx Europe 600 Index shed 2.16%, Germany's DAX 30 tumbled 3.45%, France's CAC 40 lost 2.13%, and the U.K.'s FTSE 100 fell 2.31%.

U.S. government bond prices remained buoyed, as the benchmark 10-year Treasury yield dropped to 0.540% from 0.578% Wednesday.

Spot gold price halted its nine-session rally retreating $13.00 to $1,956 an ounce. And spot silver price was down for a third day as shedding 3.3% to $23.50 an ounce.

U.S. WTI crude oil futures (September) fell 3.3% to $39.92 a barrel, the first close below $40.00 since July 9.

On the forex front, the U.S. dollar kept sliding with the ICE U.S. Dollar Index falling 0.3% to 92.96. Apart from the record shrinking GDP readings, President Donald Trump's tweet on delaying the November presidential election helped to beat down the greenback.

EUR/USD closed above 1.1800 for the first time since May 2018, as it climbed 0.5% to 1.1847. The Eurozone's jobless rate was reported at 7.8% for June (7.7% expected), up from 7.7% in May. The Eurozone's GDP for the second-quarter (a fall in annualized rate of -12.1% on quarter expected) and Consumer Prices for July (-0.5% on month expected) will be reported.

Official data showed that Germany's GDP fell at an annualized rate of 10.1% in the second quarter (-9.0% expected) and jobless rate was stable at 6.4% in July (6.5% expected). June Retail Sales will be reported today (-3.0% on month expected).

GBP/USD shot above the key level of 1.3000 closing at 1.3095.

USD/JPY fell 0.2% to 104.72.

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