Asia Morning Oct 1

Asia Morning: U.S. Stocks Resume Rally on Stimulus Hopes

On Wednesday, U.S. stocks resumed their rebound. The Dow Jones Industrial Average jumped 329 points (+1.20%) to 27781, the S&P 500 rose 27 points (+0.83%) to 3363, and the Nasdaq 100 was up 95 points (+0.84%) to 11418.

Dow Jones Industrial Average : Daily Chart

Sources: GAIN Capital, TradingView

The first presidential debate between Donald Trump and Joe Biden, widely regarded as chaotic, seemed not to have much impact on the market. Instead, investors were still optimistic over a new economic stimulus package, although U.S. Treasury Secretary Steven Mnuchin said there is still no agreement on a deal after a meeting with House Speaker Nancy Pelosi.

Health Care Equipment & Services (+2.23%), Automobiles & Components (+1.47%) and Food & Staples Retailing (+1.43%) sectors performed the best. Duke Energy (DUK +7.46%), L Brands (LB +4.78%), Centene Corp (CNC +4.42%), Universal Health Services (UHS +4.38%) and Harley-Davidson Inc (HOG +3.94%) were top gainers.

Approximately 59% (61% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 37% (42% in the prior session) were trading above their 20-day moving average.

U.S. official data showed that the GDP (third reading) shrank at an annualized rate of 31.4% on quarter in the second quarter (-31.7% expected). Pending Home Sales surged 8.8% on month in August (+3.1% expected). And the Automatic Data Processing (ADP) jobs report showed that the economy added 749,000 private jobs in September (+649,000 expected).

European stocks remained under pressure. The Stoxx Europe 600 Index edged down 0.11%, Germany's DAX 30 declined 0.51%, France's CAC 40 lost 0.59%, and the U.K.'s FTSE 100 was down 0.53%.

U.S. Treasury prices softened and the benchmark 10-year Treasury yield advanced to 0.677%.

Spot gold slipped back $12.00 to $1,885 an ounce, while spot silver shed 3.9% to $23.24 an ounce.

Oil prices rose after the U.S. Energy Information Administration reported that crude-oil stockpiles were down 2 million barrels last week, in contrast to an addition of 1.6 million barrels expected. U.S. WTI crude oil futures (November) rebounded 2.4% to $40.22 a barrel.

On the forex front, the U.S. dollar softened further as investors were optimistic on a new stimulus package. The ICE Dollar Index edged down to 93.80 from 93.87 in the prior session.

EUR/USD declined 0.19% to 1.1720. Official data in Germany showed that the jobless rate held steady at 6.3% in September (6.4% expected) and retail sales jumped 3.1% on month in August (+0.4% expected). In France, consumer prices were reported to edged up 0.1% on year in September ((+0.2% expected).

GBP/USD rallied for a third session advancing 0.44% to 1.2920. U.K. official data showed that the second-quarter GDP (final readings) shrank 19.8% on quarter (-20.4% expected). The Nationwide Building Society House Price Index rose 0.9% on month in September (+0.5% expected).

Meanwhile, USD/JPY fell 0.19% to 105.46, and USD/CAD slid 0.52% to 1.3318.

AUD/USD climbed 0.45% to 0.7162.

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