CURRENCY MARKET WRAP
As of Mon Aug 26th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.54%, 97.64
USDJPY, -0.97%, $105.41
EURUSD, +0.59%, $1.1144
GBPUSD, +0.22%, $1.2279
USDCAD, -0.18%, $1.3280
AUDUSD, -0.01%, $0.6756
NZDUSD, +0.61%, $0.6404
The day started with investors looking forward to Fed Chair Powell’s speech from Jackson Hole, Wyoming. Attention quickly shifted to trade, however, after China announced tariffs on $75 billion of goods imported from the U.S on Sept. 1 and Dec. 15, which are the same dates the U.S. has planned for its tariffs on China. The tariff rate will range from 5-10%, including a separate 5-25% on autos and auto parts starting Dec. 15. Trump took to Twitter to lash out against both the Fed Chair and China. Stocks fell noticeably on the president’s declaration that companies find alternatives to China.
Powell promised on Friday to take the steps needed to maintain U.S. economic growth as fears about a potential recession grow.In his remarks to the Fed’s annual Jackson Hole symposium, the central bank chief said the economy has “continued to perform well overall” but acknowledged “trade policy uncertainty seems to be playing a role in the global slowdown.”
Amid the uncertainty and growth concerns, investors flocked to safe-haven assets like gold ($1537.25/oz, +$28.75, +1.9%), the Japanese yen, and U.S. Treasuries. In addition, expectations for further downside in equities contributed to a 17.8% spike in the CBOE Volatility Index (19.65, +2.97).
The 2-yr yield dropped seven basis points to 1.53%, and the 10-yr yield dropped eight basis points to 1.53%. The U.S. Dollar Index fell 0.54% to 97.64. WTI crude fell 2.0%, or $1.12, to $54.16/bbl.
STOCK MARKET WRAP
S&P500, -2.59%, 2,847.11
Nasdaq, -3.00, 7,751.77
Nikkei Futures, +0.48%, 20,720.0
The stock market sold off on Friday after Trump ordered companies to find an alternative to China in response to Beijing announcing retaliatory tariffs against the U.S. The S&P 500 (-2.59%) and Dow Jones Industrial Average (-2.4%) lost around 2.5%, while the Nasdaq Composite (-3.0%) and Russell 2000 (-3.1%) lost at least 3.0%
A steady broad-based retreat transpired during the day amid worries that escalated trade tensions will exacerbate slowing global growth and, by extension, affect corporate earnings. All 11 S&P 500 sectors finished in negative territory, which saw the energy (-3.4%) and information technology (-3.3%) sectors losing over 3%. The utilities sector (-1.1%) declined the least.
Shares of Apple(AAPL 202.64, -9.82) fell 4.6% and other trade-sensitive areas like the Philadelphia Semiconductor Index (-4.4%) and Dow Jones Transportation Average (-3.3%) also posted steep losses. Shares of Foot Locker (FL 34.00, -7.93, -18.9%)plunged nearly 20% after the company missed top and bottom-line estimates.