CURRENCY MARKET WRAP
As of Thu Nov 21st, Singapore Time zone UTC+8
U.S. Dollar Index, +0.01%, 97.87
USDJPY, -0.02%, $108.53
EURUSD, -0.01%, $1.1078
GBPUSD, -0.02%, $1.2926
USDCAD, +0.27%, $1.3304
AUDUSD, -0.39%, $0.6801
NZDUSD, -0.31%, $0.6412
FOMC Minutes from the October meeting didn’t draw much attention, as it was consistent with the prevailing view about monetary policy since that meeting. U.S. Economic data was limited to the weekly MBA Mortgage Applications Index, which declined 2.2% following a 9.6% increase in the prior week.
In trade, completion of a “phase one” U.S.-China trade deal could slide into next year, trade experts and people close to the White House said, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own. In addition, the crackdown on Hong Kong protesters may also complicate the deal’s completion. The U.S. Senate passed a bill condemning the crackdown and pledging support for Hong Kong, which was immediately criticized by Beijing.
U.S. Treasuries continued to benefit from a defensive mindset, which sent yields lower in a curve-flattening trade. The 2-yr yield declined two basis points to 1.57%, and the 10-yr yield declined five basis points to 1.74%. The U.S. Dollar Index increased 0.01% to 97.87.
STOCK MARKET WRAP
S&P500, -0.38%, 3,108.46
Nasdaq, -0.51%, 8,526.73
Nikkei Futures, -0.91%, 23,078.0
S&P 500 declined as much as 0.9% on Wednesday after Reuters reported that a Phase One trade deal may not get completed this year. The negative-sounding headline conflicted with the optimistic tone struck by top White House officials, including Commerce Secretary Ross just yesterday. Also transpiring yesterday was the U.S. Senate passing the Hong Kong Human Rights and Democracy Act, much to the contempt of China.
The trade-sensitive areas of the market like the S&P 500 materials (-1.2%), industrials (-0.8%), and information technology (-0.7%) sectors led the decline. The communication services sector (-0.8%), which contains many growth-oriented stocks underperformed.
Unsurprisingly, though, selling pressure quickly abated as investors eagerly bought the dip. In addition, the details of the report were not as foreboding as the headline, and knee-jerk selling, suggested. Tucked in the report was a line indicating that some “China and trade experts” were still optimistic about a deal in the coming weeks.
Leading the afternoon comeback was the energy sector (+1.0%), which found reprieve amid a 3% rebound in oil prices ($56.91, +1.70, +3.1%). The defensive-oriented utilities (+0.6%), consumer staples (+0.2%), and real estate (+0.03%) sectors also finished in positive territory.
Shares of Target (TGT 126.43, +15.58, +14.1%) climbed 14% after the company impressed investors with its stellar results and upbeat guidance. Lowe’s (LOW 117.83, +4.43, +3.9%) also beat earnings estimates and raised its FY20 EPS guidance.