CURRENCY MARKET WRAP
As of Wed Sep 25th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.22%, 98.39
USDJPY, -0.37%, $107.17
EURUSD, +0.19%, $1.1014
GBPUSD, +0.44%, $1.2486
USDCAD, -0.18%, $1.3239
AUDUSD, +0.35%, $0.6798
NZDUSD, +0.37%, $0.6316
U.S. Conference Board’s Consumer Confidence Index for September dropped to 125.1 consensus 134.0) from a downwardly revised 134.2 (from 135.1) in August. It reflects burgeoning anxiety among consumers about the impact of tariffs and trade tension. That hasn’t translated into a retrenchment in consumer spending yet. If confidence continues to wane, though, the market will start to assume it is going to show up in weaker levels of discretionary spending activity, which would be bad for growth prospects.
In Trump’s UN speech, he took shots at China, accusing the nation of breaking promises to the international community to “adopt promised reforms.” Trump also took a shot at Venezuela’s Nicolás Maduro in his speech, calling him a “dictator” and a “Cuban puppet.” He called Iran’s regime one of the “greatest security threats facing peace-loving nations” and urged nations not to “subsidize Iran’s bloodlust.” He railed against the World Trade Organization for failing to compel China to liberalize its economy and called for “drastic change” to the international trade system. The second-largest economy in the world, he said, should not be allowed to declare itself a developing country at the expense of others.
The major averages moved well into negative territory by midday, after reports surfaced that House Speaker Nancy Pelosi was planning to formally announce an impeachment inquiry on Trump at 5:30 p.m. ET. Trump said he will release a full unredacted transcript of his conversation with Ukraine’s President Volodymyr Zelensky.
U.S. Treasuries resumed their recent advance amid the political uncertainty and concerns about trade and growth. The 2-yr yield declined six basis points to 1.61%, and the 10-yr yield declined seven basis points to 1.64%. Interestingly, the 10-yr yield is now down 27 basis points from its high on Sept. 13. The U.S. Dollar Index fell 0.22% to 98.39.
STOCK MARKET WRAP
S&P500, -0.84%, 2,966.61
Nasdaq, -1.46%, 7,993.63
Nikkei Futures, -0.49%, 21,797.5
U.S. stocks fell on Tuesday, as investors shunned risk following a decline in consumer confidence, a hard-lined speech from Trump, and growing calls for the president’s impeachment.
Stocks opened higher, lifting the S&P 500 up as much as 0.5% and back above the 3000 level, amid news that China was purchasing more U.S. soybeans and Treasury Secretary Mnuchin confirming trade talks will resume in two weeks. None of these developments was particularly surprising. That advance proved short-lived as stocks began an orderly retreat following a weaker-than-expected consumer confidence report for September and Trump’s speech at the UN General Assembly.
The S&P 500 energy sector (-1.6%) led the sectors in losses as oil prices ($57.32, -1.30, -2.3%) weakened. The communication services sector (-1.3%) and the trade-sensitive Philadelphia Semiconductor Index (-1.7%) showed relative weakness after a strong start. The defensive-oriented utilities (+1.0%) and consumer staples (+0.2%) sectors were the lone sectors to finish in positive territory.
Notable laggards included FAANG components Facebook (FB 181.28, -5.54, -3.0%), Amazon (AMZN 1741.61, -43.69, -2.5%), and Netflix (NFLX 254.59, -11.33, -4.3%). An earnings miss from AutoZone (AZO 1096.63, -50.63, -4.4%) weighed on the stock.