CURRENCY MARKET WRAP
As of Mon Aug 19th, Singapore Time zone UTC+8
Dollar Index +0.06%, 98.20
USDJPY, +0.05%, $106.43
EURUSD, +0.01%, $1.1091
GBPUSD, +0.07%, $1.2158
USDCAD, -0.03%, $1.3268
AUDUSD, +0.07%, $0.6786
NZDUSD, -0.05%, $0.6426
U.S. preliminary University of Michigan Consumer Sentiment report for August checked in at 92.1 (consensus 97.7) versus the final reading of 98.4 for July. The August number was the lowest reading since January. The takeaway from the report was the finding that apprehension about the economic outlook increased with the Fed’s rate cut, which is something that might influence consumers to curtail their discretionary spending activity.
Positive trade narrative contributed to a healthy risk appetite on Friday. Trump said he would speak to his Chinese counterpart Xi Jinping “very soon” as Beijing warned it would retaliate if Washington continued imposing tariffs on Chinese products. Asked whether he had spoken to Xi directly, Trump said: “I will speak to him. We have a call scheduled soon – [with] President Xi.” Trump added: “We’re talking by phone and we’re having very productive talks. They would like to do something, I will tell you that.”
Despite the rally in equities, demand for U.S. Treasuries held firm amid lingering growth concerns.The 2-yr yield declined two basis points to 1.47%, and the 10-yr yield increased one basis point to 1.54%. The U.S. Dollar Index was unchanged at 98.18. WTI crude increased 0.5% to $54.89/bbl.
STOCK MARKET WRAP
S&P500, +1.44%, 2,888.68
Nasdaq, +1.67%, 7,895.99
Nikkei Futures, +0.06%, 20,418.81
A buy-the-dip mindset helped boost the S&P 500 (+1.4%), Dow Jones Industrial Average (+1.2%), and Nasdaq Composite (+1.7%) each over 1.0%. The Russell 2000 increased 2.2%.
Industrial components Deere & Company (DE 149.23, +5.52, +3.8%) and General Electric (GE 8.79, +0.78, +9.7%) greatly benefited from the risk-on mood. Deere missed earnings estimates and lowered its full-year guidance, which sent shares down nearly 4% prior to the open, but shares still finished higher. GE, meanwhile, bounced back from yesterday’s 11% drop that followed allegations of accounting fraud.
High-beta groups like the Dow Jones Transportation Average (+2.1%), the Philadelphia Semiconductor Index (+2.8%), and the iShares Nasdaq Biotechnology ETF (IBB 104.97, +2.29, +2.2%) each advanced over 2%. The semiconductor space was boosted by a positive reaction to better-than-expected earnings results from NVIDIA (NVDA 159.56, +10.79, +7.3%).