CURRENCY MARKET WRAP
As of Fri Jul 19th, Singapore Time zone UTC+8
Dollar Index -0.09%, 97.19
USDJPY, +0.06%, $107.42
EURUSD, 0.00%, $1.1260
GBPUSD, 0.00%, $1.2543
USDCAD, -0.02%, $1.3036
AUDUSD, +0.02%, $0.9214
NZDUSD, +0.05%, $0.6776
New York Fed President Williams (FOMC voter) catalyzed a slow-moving market after he said that when interest rates are low and there are signs of economic slowing, it is better to lower rates and keep them low rather than keep the Fed’s powder dry. The dovish commentary increased the probability for a 50-basis points rate cut at the July 30-31 FOMC meeting to 66.9% from 34.3% yesterday, according to the fed funds futures market.
Lower rates, which were seen across the U.S. Treasury yield curve, should continue to favor risk assets. The fed-funds sensitive 2-yr yield declined five basis points to 1.78%, and the 10-yr yield declined two basis points to 2.04%. The U.S. Dollar Index lost 0.5% to 96.69.
Separately, oil prices fell for the sixth straight session on Thursday. WTI crude settled 2.8% lower at $55.19/bbl but finished on a high note after Trump said the U.S. Navy defensively shot down an Iranian drone near the Strait of Hormuz.
STOCK MARKET WRAP
S&P500, +0.36%, 2,978.87
Nasdaq, +0.19%, 7,850.12
Nikkei Futures, +0.13%, 21,118.0
S&P 500 overcame a sluggish start to increase by 0.4% on Thursday, as dovish Fed commentary bolstered expectations for accomodative monetary policy. In addition, mostly positive reactions to earnings reports helped provide support for the market.
The Nasdaq Composite and the Russell 2000 both increased 0.3%. The Dow Jones Industrial Average finished flat, pressured by losses in shares of Boeing (BA 361.11, -8.41, -2.3%) and UnitedHealth (UNH 260.60, -6.05, -2.3%) with UNH unable to gain on positive earnings results.
Overall, the gains were modest, but the S&P 500 consumer staples (+0.8%), financials (+0.8%), information technology (+0.8%), and utilities (+0.8%) sectors did gain 0.8% apiece. The communication services sector (-0.9%) was a drag on the market, as shares of Netflix (NFLX 325.21, -37.23) fell 10.3% after disappointing investors with a miss on net subscriber additions. In other earnings news, Philip Morris International (PM 87.71, +6.66, +8.2%), IBM (IBM 149.63, +6.56, +4.6%), Morgan Stanley (MS 44.43, +0.66, +1.5%), and Honeywell (HON 173.88, +5.26, +3.1%) climbed on better-than-expected results.