CURRENCY MARKET WRAP
As of Thu Sep 26th, Singapore Time zone UTC+8
U.S. Dollar Index, +0.63%, 98.96
USDJPY, +0.60%, $107.71
EURUSD, -0.62%, $1.0952
GBPUSD, -1.05%, $1.2358
USDCAD, -0.11%, $1.3256
AUDUSD, -0.70%, $0.6755
NZDUSD, -0.79%, $0.6273
U.S. annual pace of new home sales for August (713,000) exceeded the consensus of 659,000 and was one of the highest readings since October 2007. The strength underscores the impact of low mortgage rates on buyer demand, as the higher-priced West region saw the biggest increase among all regions.
Dollar, Stocks and Treasury yields were bid despite a formal impeachment inquiry into Trump. While the markets fell at the onset, they quickly realized that the chance of Trump getting removed from office is extremely slim. Investors also liked what they saw in the reconstructed transcript of the Trump-Ukraine phone call. Trump had originally promised a full unredacted transcript of the call but instead, the White House released a “memorandum of telephone conversation” that was “not a verbatim transcript” but rather “notes and recollections of Situation room Duty officers.” The transcript shows Trump asking Ukraine to investigate Biden and the DNC server, there was no mention of a quid pro quo that would lead to a criminal inquiry.
In trade, Trump said a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States, including of beef and pork. He said China was trying to be nice to him and added to reporters: “I was nice to them.”
Safe-haven assets like gold ($1513.10/ozt, -$27.60, -1.8%) and U.S. Treasuries began to sell off, with some curve-steeping activity contributing to the gains in the S&P 500 financials sector (+0.7%). Trade-sensitive areas like the information technology (+1.2%) and consumer discretionary (+1.0%) sectors gained traction after Trump said a trade deal with China could “come sooner than you think.” The 2-yr yield increased six basis points to 1.67%, and the 10-yr yield increased ten basis points to 1.73%. The U.S. Dollar Index rose 0.63% to 98.96 amid weakness in the euro and British pound. WTI crude lost 1.3%, or $0.76, to $56.56/bbl, extending its recent pullback as inventories unexpectedly increased, according to the weekly report from the EIA.
STOCK MARKET WRAP
S&P500, +0.62%, 2,984.87
Nasdaq, +1.05%, 8,077.38
Nikkei Futures, +0.24%, 21,992.5
S&P 500 gained 0.62% on Wednesday, as upbeat trade news and strong economic data and earnings helped investors brush aside impeachment concerns.The Dow Jones Transportation Average (+1.0%) and Philadelphia Semiconductor Index (+1.8%) finished with noticeable gains as the broader market steadily increased throughout the day. The defensive-oriented health care (-0.5%), real estate (-0.1%), and utilities (-0.1%) sectors were the lone S&P 500 sectors to finish in negative territory.
Nike (NKE 90.81, +3.63, +4.2%) and Cintas (CTAS 266.62, +14.48, +5.7%) padded the advance after both beat top and bottom-line estimates, with Cintas issuing upside FY20 EPS guidance. Philip Morris International (PM 75.28, +3.72, +5.2%) outperformed after it ended merger talks with Altria (MO 40.56, -0.17, -0.4%) as scrutiny of Juul/vaping intensified. Altria owns a stake in Juul.