CURRENCY MARKET WRAP
As of Thu Aug 8th, Singapore Time zone UTC+8
Dollar Index -0.02%, 97.61
USDJPY, -0.35%, $106.11
EURUSD, +0.04%, $1.1204
GBPUSD, -0.23%, $1.2141
USDCAD, +0.26%, $1.3314
AUDUSD, -0.05%, $0.6758
NZDUSD, -1.16%, $0.6449
Treasury yields have been on a steady decline since November, but a sharp acceleration that further flattened the yield curve yesterday was startling to see. Investors piled into the safe-haven asset amid familiar growth concerns and expectations that global central banks will continue to lower rates.
Central banks from New Zealand (50bps vs Expected 25bps), India (35bps vs Expected 25bps), and Thailand (25bps vs Expectation Of No Cut) cut interest rates sharper than expected on Wednesday with New Zealand’s RBNZ Governor indicating that rates may go negative. Negative rates around the world has been a phenomenon that has presumably increased interest in U.S. Treasuries.
The 2-yr yield finished three basis points lower at 1.58% after touching 1.53% at its low, and the 10-yr yield finished six basis points lower at 1.68% after touching 1.61% at its low. The U.S. Dollar Index finished flat at 97.61. Low rates and growth concerns continued to boost gold ($1505.9/oz, +$33.30, +2.3%), which at one point today provided investors a higher return than the S&P 500 this year.
STOCK MARKET WRAP
S&P500, +0.08%, 2,883.98
Nasdaq, +0.38%, 7,862.83
Nikkei Futures, -0.06%, 20,518.0
Stock market staged a big reversal on Wednesday in which the S&P 500 increased 0.08% after being down as much as 2.0% shortly after the open. A steep drop in U.S. Treasury yields contributed to the early sell-off, but selling pressure was abated soon after yields stabilized. The Nasdaq Composite (+0.38%) also finished higher after beginning sharply lower, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.1%) finished just below their flat lines.
Nevertheless, much like Tuesday’s session, initial gloom and doom quickly turned into an opportunistic mindset throughout the day. Six of the 11 S&P 500 sectors finished in the green, led by solid gains in the materials (+1.3%), consumer staples (+1.2%), and real estate (+0.9%) sectors.
In earnings news, Dow component Walt Disney (DIS 134.86, -7.01, -4.9%)fell nearly 5% after it missed top and bottom-line estimates.CVS Health (CVS 58.12, +4.03, +7.5%)and Match Group (MTCH 91.77, +17.86, +24.2%)climbed on positive results and guidance.