The S&P 500 stock index fell slightly in the US stock market on the 11th. Selling in large tech stocks has strengthened again amid a lack of direction following mixed economic data.
S&P 500 Stock Index 4464.05-4.78-0.11% Dow Jones Industrial Average 35281.40 105.250.30% Nasdaq Composite Index 13644.85-93.14-0.68%
The tech-heavy Nasdaq 100 Index fell for the first time this year for the second straight week. Semiconductor maker Nvidia fell for a fourth straight day, widening its drop to about 10% over the period.
The stock market has almost certainly lost much of its upside momentum, according to Matt Maley, chief market strategist at Miller Tabak. With the usually volatile September-October quarter approaching, the chances of a correction in the not-too-distant future, if not a wild one, are increasing, Mailley said.
Markets are now betting that the Fed will not raise rates at its meeting next month, but will not declare victory in the fight against inflation. The economic data released on the same day did not change this view.
A consumer survey (preliminary figures) released by the University of Michigan in August showed that inflation expectations one year ahead fell to 3.3% from 3.4% in the previous month, contrary to market expectations. Inflation expectations over the next 5-10 years also fell from 3% to 2.9%. Meanwhile, producer price index (PPI) growth accelerated in July, largely due to strength in certain service categories.
U.S. Consumers’ Expectations of Inflation One Year Ahead Fall Unexpectedly – Great Michigan Index (1)
U.S. Producer Price Index outperforms expectations in July, strong demand for services (3)
“With the University of Michigan data coming out, there doesn’t seem to be much to counter the dominant trend today,” said Ian Lyngen, strategist at BMO Capital Markets. Interest rates markets can be volatile on Friday afternoons in the summer, and with the weekend approaching, he has to be cautious about any move, he said.
US Treasuries
In the US Treasury market, yields have risen, especially for medium-term bonds. In early trading, unexpectedly strong UK Gross Domestic Product (GDP) data and US PPI upside were taken into account. The 10-year U.S. Treasury sell-off spilled over as U.K. GDP data sent U.K. Treasuries plummeting.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 4.26% 1.00.25% US 10-year bond yield 4.15% 4.91.19% US 2-year bond yield 4.89% 5.11.05% US Eastern Time 16:00 58 minutes
money order
The depreciation of the yen and the appreciation of the dollar accelerated in the New York foreign exchange market. The dollar was at 144.999 yen at one point, almost above the psychological milestone of 145 yen. If the yen depreciates and the dollar rises above 145.07 yen, it will reach the level seen in the latter half of 2022 when the Japanese authorities intervened in the market. US dollar yields are rising and the dollar is being bought as interest rate differentials between Japan and the US continue to be a concern. Japan was closed on the 11th due to a national holiday.
The Bloomberg Dollar Spot Index, which shows the movement of the dollar against the 10 major currencies, ended rising amid volatile price movements. On a weekly basis, it was the fourth straight week high since February. Inflation figures released today were mixed in terms of the pace of tightening by the Fed.
Bloomberg Dollar Index 1234.451.740.14% USD/JPY¥144.96¥0.210.15% EUR/USD$1.0947-$0.0034-0.31% 16:58 US Eastern Time
Eugenio Aleman, chief economist at Raymond James, said of the PPI data, “Inflation is slowing, but the Fed’s job of getting inflation back to its 2% target is far from over, and the Fed is confident it will continue to do so.” indicates that we need several more months of good data.”
The pound rebounded against the dollar for the first time in four days. The second quarter (April-June) of the UK’s GDP grew significantly for the first time in about a year, which was a tailwind.
UK GDP up 0.2% in April-June quarter – Unexpectedly strong for the first time in over a year
“The market has re-priced in expectations that the Bank of England will raise interest rates two more times this year, pushing the pound higher in the process,” said Kit Jacks, strategist at Societe Generale.
crude
Crude oil futures in New York rebounded. It has also risen in the week, and this is the 7th consecutive week high and the long-term rise phase since June 2022. A series of reports predicting an increase in demand gave momentum to the rally, which had been rallying on the back of increased risks of supply disruptions and an extended Saudi production cut.
The International Energy Agency (IEA) said in a monthly report released on the 11th that global oil demand rose to a record high in June. Demand in August is likely to increase further as consumption in China is strong. The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report released on Wednesday that the global oil market is expected to face a severe shortage of more than 2 million barrels per day this quarter.
On the other hand, supply concerns, which have been the driving force behind crude oil price hikes since late June, have not receded. Traders are watching the situation closely as escalating fighting between Russia and Ukraine risks disrupting Russian exports through the Black Sea. On Thursday, Saudi Arabia reiterated that it would continue its voluntary production cuts into September.
JPMorgan Chase & Co said on Thursday that North Sea Brent crude could hit $90 a barrel by September.
Analysts at the bank, led by Natasha Kaneba, said in a note that “the price is expected to continue rising toward $90,” adding that “the key indicator for the market is that the physical market is tightening rapidly. It shows ,” he said.
WTI futures for September delivery on the New York Mercantile Exchange (NYMEX) closed at $83.19 a barrel, up 37 cents (0.5%) from the previous day. London ICE North Sea Brent October delivery rose 41 cents, or 0.5%, to $86.81.
Money
The gold spot market rebounded slightly. Markets continued to absorb better-than-expected inflation data and an unexpected decline in inflation expectations one year ahead.
“Gold prices remain vulnerable to further selling pressure as rising producer prices may continue to pressure the Fed to tighten further,” said Ed Moya, senior market analyst at Oanda. There is,” he pointed out. “July’s PPI numbers are a bit hot, and August’s could be the same. The disinflationary process may not go smoothly over the next few months,” he said.
Spot prices rose less than 0.1% to $1,913.22 an ounce as of 2:44 p.m. New York time. December gold futures on the New York Mercantile Exchange (COMEX) fell $2.30, or 0.1%, to close at $1,946.60.
Original title:Tech Giants Keep a Lid on Stocks as Yields Climb: Markets Wrap
Stocks Struggle for Solid Footing as Yields Climb: Markets Wrap
Treasuries End Near Lows After PPI Data Beat, USD/JPY Tests 145
Greenback Gains; Yen Nears Key 145 Mark Per Dollar: Inside G-10
Oil Posts Seventh Weekly Gain Amid Reports of Tighter Market
Gold Edges Higher as Traders Digest US Inflation Readings
2023-08-11 21:00:00
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