Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Opening Bell: Stock Woes Deepen As All Eyes Turn To Fed; U.S. Dollar Gains

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJul 09, 2019 06:50
ca.investing.com/analysis/opening-bell-stock-woes-deepen-as-all-eyes-turn-to-fed-us-dollar-gains-200430432
Opening Bell: Stock Woes Deepen As All Eyes Turn To Fed; U.S. Dollar Gains
By Investing.com (Pinchas Cohen/Investing.com)   |  Jul 09, 2019 06:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Global stocks, U.S. futures extend post-NFP losses
  • German BASF's profit warning hits European indices
  • U.S. yields, dollar climb ahead of Fed Chair Powell's speech
  • Gold drops despite broad risk off mode

Key Events

Global stocks and futures on the S&P 500, Dow and NASDAQ 100 deepened a slide this morning after an upbeat U.S. job report tempered the benefits of the Fed rate cut tailwind.

STOXX Daily Chart
STOXX Daily Chart

Europe's STOXX 600 dropped for the third day after the world’s largest chemical producer, German BASF (DE:BASFN), posted a profit warning, heightening growth fears across the continent. Technically, the pan-European benchmark is testing the short-term uptrend line, while the RSI already fell below it, suggesting prices may follow.

The euro also inched lower for the third consecutive session due to the dollar's post-nonfarm payroll data strength, extending a downside breakout of the short-term uptrend line.

In the earlier Asian session, regional stocks excluding Japanese shares reached near a three-week low after investors repriced their overconfidence in falling U.S. interest rates. Hong Kong’s Hang Seng tumbled -0.76% even after the city’s Chief Executive Carrie Lam called her government's controversial extradition bill “dead.”

Global Financial Affairs

In Monday's U.S. session, equities continued to fall on the downward effect Friday's strong labor data carried on investors' rate cut outlook.

S&P 500 Daily Chart
S&P 500 Daily Chart

The S&P 500 gave up 0.48%, with Materials (-1.15%) leading declines, while Real Estate (+0.34%) outperformed. Technically, the index fell below its short-term uptrend line, with the RSI possibly forming a double-top reversal.

The Dow Jones Industrial Average retreated 0.43%, the NASDAQ Composite dropped 0.78% and the Russell 2000 underperformed with a 0.93% loss.

Meanwhile, the yield on 10-year Treasurys is hovering in a holding pattern—after jumping the most since Jan. 3 on the positive NFP numbers—as investors await clues on the Fed's monetary policy path from Chairman Jerome Powell, who speaks at a banking conference today ahead of his highly anticipated testimony before Congress at 8:45 ET on Wednesday—dramatically increasing the likelihood of high volatility at the open.

DXY Daily Chart
DXY Daily Chart

The dollar returned to trading along its uptrend line since September, to cross above its short-term downtrend line since May—no less. Investors can expect fluctuations during and after Powell’s speech.

XAU Daily Chart
XAU Daily Chart

In mirror image to the USD and despite the broader risk off mood, gold is falling for the third day, once again demonstrating it is mostly an anti-dollar trade rather than a safe haven asset. Technically, the drop extended a break of the short-term uptrend line, threatening a small double top pattern.

WTI Daily Chart
WTI Daily Chart

Oil was seen ticking higher as geopolitical tensions on the Mideast front intensified after the U.K. seized an Iranian oil tanker—believed to be carrying over 2 million barrels of oil to Syria—off the coast of Gibraltar. Technically, the price remained under pressure below the medium-term downtrend line and the 200 DMA.

Up Ahead

  • Canadian Housing Starts for June are released Tuesday.

  • Canadian Building Permits for May are released Tuesday.

  • Bank of Canada Rate Decision is issued on Wednesday followed by a press conference.

  • The front-runners for U.K. Prime Minister Theresa May's succession, Boris Johnson and Jeremy Hunt, will go head to head in a televised debate tonight, ahead of the final vote on July 23 .
  • Federal Reserve Chairman Jerome Powell testifies before Congress on monetary policy and the state of the U.S. economy on Wednesday and Thursday.
  • Fed minutes are due on Wednesday, ECB minutes on Thursday.
  • The core consumer price index, a key measure of U.S. inflation coming out on Thursday, is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.
  • U.S. producer prices come out on Friday.

Market Moves

Stocks

Currencies

  • The Canadian loonie was down 0.18 percent against the U.S. greenback early Tuesday, trading at 0.7622.

  • The U.S. Dollar Index rose more than 0.1%.
  • The British pound fell 0.2%.
  • The euro dropped less than 0.05% to $1.1209.
  • The Australian dollar slid 0.3%.

Bonds

  • Canada’s 10-year yield was down early Tuesday at 1.578, a 0.13-percent decrease.

  • The yield on 10-year Treasurys rose less than one basis point to 2.05%.
  • The yield on 2-year Treasurys gained less than one basis point to 1.89%.
  • Japan’s 10-year yield climbed less than one basis point to -0.141%.
  • Spain’s 10-year yield increased one basis point to 0.444%.

Commodities

  • Gold declined 0.1% to $1,394.35 an ounce.
  • West Texas Intermediate crude fell 0.4% to $57.43 a barrel.
  • Iron ore climbed 3.1% to $115.86 per metric ton.
Opening Bell: Stock Woes Deepen As All Eyes Turn To Fed; U.S. Dollar Gains
 

Related Articles

FactSet Research Systems Inc
Podcast : Financial Market Preview - Monday 23-May By FactSet Research Systems Inc - May 23, 2022

US equity futures are indicating a higher open as of 05:00 ET. Asian equities traded mixed to higher on Monday. European equity markets are largely higher. Latest news on the China...

Opening Bell: Stock Woes Deepen As All Eyes Turn To Fed; U.S. Dollar Gains

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email