Markets Adjust to Fed's New Outlook
Hey! How was the weekend? Hope you did unwind!
That was a crazy week we left behind, no? Through the week, Dow lost 3.5%, S&P 500 and Nasdaq were down by 1.9% and 0.2%, in that order, post that FOMC meeting. Friday was no better!
The week ahead is going to be a busy one with the Federal Reserve scheduled to release data on its preferred measure of inflation, the Personal Consumption Expenditures (PCE).
Also, the Chicago Fed Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, will be updated this morning.
Oil prices have been soaring and now the talks on the Iran Nuclear Deal have come to a standstill, which will mean a delayed supply from the OPEC producer. It will further push Crude Oil prices upwards.
Lumber prices have been pulled back to earth with a 48% drop since early May-from $1686, per thousand board feet to $875.
A quick rewind of Friday: The mid-week upset, caused by Fed signalling an early rise in interest rates and the “Quadruple Witching Day” on Friday-marking the quarterly expiration of US options and futures contracts-left the markets red. Dow had the worst week since October.
S&P 500: 4166 -55.4 (-1.31% )▼NASDAQ: 14030 -130.9 (-0.92%)▼Dow Jones: 33290 -533.3 (-1.58%)▼All major equity sectors were into the negative territory. Energy (-3.0%▼) was the worst hit, followed by Financials (-2.4%▼), Utilities (-2.6%▼) and Real Estate (-1.6%▼). Healthcare (-1.1%▼) and Technology (-0.9%▼) were among the losers as well.
Despite the sectors being all red, there were some stocks that did exceedingly well on Friday.
Riding on its Thursday’s promising earnings report, Adobe Inc (ADBE, 2.58%▲) made substantial gains followed by PayPal Holdings Inc (PYPL, 1.89%▲), from the Information Technology sector. PayPal has had a growth of 18% this year and 117% in 2020.
Cai International (CAI, 46.8%▲) soared on Friday after the news of this transportation equipment financing company being acquired by Mitsubishi HC Capital came to fore. This small cap’s relative volume was 52.7.
After reporting the results of its phase-2 clinical data regarding treatment of a rare bone marrow cancer, Geron Corporation (GERN, 29.79%▲), a Russell 2000 Biotechnology Company, soared 42.2% to $2 on Friday. It’s relative volume was 161.2.
After snapping a four week winning streak on Friday, the pan-European Stoxx-600 fell to a two week low by 0.6%, early Monday morning-the slide fuelled by a decline in Mining and Bank stocks.
The individual markets, however, bounced back later in the day.
FTSE: 7042 25.0 (0.36%)▲CAC: 6595 26.5 (0.40%)▲DAX: 15539 91.4 (0.59%)▲*As of 6:15 am ET
The investors in the Asia Pacific, are still figuring their moves out following a sellout in US markets on Friday, post the Fed signal of an early raise in interest rates. The markets were red overall with Nikkei leading the slide, coming down by 3.7%. Shanghai and Sensex bounced a little later in the day.
Hang Seng:
28399 -402.2 (-1.4% )▼
NIKKEI:
27883 -1080 (-3.7%)▼
Shanghai:
3529 4.08 (0.12%)▲
Sensex:
52464 104.6 (0.19%)▲
The greenback continues to grow, though it gave up some gains made on Friday early Monday morning. The dollar index stands at 92.31 (DXY, 0.10%▲) against the 92.40 on Friday,
Euro / $: 1.19 22p (0.18%)▲GBP / $: 1.39 11p (0.079%)▲CNY / $: 6.76 -72p (-0.10%)▼JPY / $: 110.1 -0.17 (-0.15%)▼
Earnings:
Firearms and accessories company, Smith and Wesson (SWBI, 17.22%▲) soared high on Friday after easily beating its earnings estimate of $1.08. The EPS of the company was $1.71, with a revenue of $322.9 million.
Centogene N.V (CNTG, -1.69%▼), a company of genetic diagnosis for rare diseases, came up with a surprise of -636%, as the EPS reported $-0.22 against an estimate of $0.04.
Cantel Medical Corp (CMD, -1.18%▼), UXIN Limited (UXIN, -4.49%▼) are among some other stocks listed to release their earnings today.
Commodity prices, barring Oil, continue to decline with a soaring dollar and China opening up on its reserves, metals in particular, and cracking down on “hoarders”. Copper prices have dropped to its lowest in around 10 weeks.
Lumber: $897.9 -7.0 (-0.77%)▼Copper : $4.16 -0.02 (-0.53%)▼Iron Ore: $214.2 0.00 (0.00%)▲Crude Oil: $73.7 0.23 (0.31%)▲The 10 year US Treasury Yield slid again, to its lowest since March, early Monday morning while markets in the Asian territory were witnessing a major slide.
10 yr US Gov: 1.39% (-3.95%)▼10 yr UK Gov: 0.76% (0.40%)▲10 yr Euro zone: -0.20% (-0.09%)▼Miners around the world have approved the first Bitcoin upgrade in four years. Aimed at greater transactions privacy and efficiency, the upgrade is called Taproot and will take effect in November.
Cryptocurrency updates:
BTC: $37654 -4.07%▼ETH: $2335 -4.69%▼BCH: $593 -3.87%▼LTC: $165 -4.52%▼Ok! That was it for today. We hope your trading week is lit!
Warm Regards
Team Researchfin.ai
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