The US stock market showed multidirectional dynamics. Technology, healthcare, and consumer cyclical sectors demonstrated growth. The oil and gas and financial sectors declined. At the close of trading, the S&P 500 increased by 0.43%, while the Nasdaq added 0.9%; both indices updated the price highs. But the Dow Jones Industrial Average decreased by 0.16%, even despite the growth of Apple and Microsoft’s shares, which increased yesterday by 3.04% and 1.29%, respectively. The US dollar index is under pressure right now. Excess liquidity in the financial system is driving the dollar index lower and major stock indices higher. And most likely, the situation will not change much before the next Federal Reserve meeting, held on September 22. The only thing that could significantly affect the market before that date is strong labor market data later this week, which could trigger a sharp rise in the dollar index and a decline in the major stock indices.
The earnings of more than 75% of major US companies surpassed 2019 levels in Q2. This suggests that many types of businesses have adapted to the new conditions.
The majority of European stock indices grew yesterday. The activity was lower than usual due to the bank holiday in the UK. German DAX increased by 0.2%, French CAC 40 and Italian FTSE MIB added 0.1% each. However, the Spanish index IBEX 35 lost 0.6%. Inflation in Germany jumped to a 13-year high of 3.4%. Companies are struggling with supply shortages, which are putting pressure on prices. Other countries in Europe will also report on the level of inflation today. Economists expect consumer prices in Europe to reach 2.7% annually, which is significantly higher than the 2% target of the ECB. Due to the growth of COVID-19, Europe will tighten the rules for US citizens to enter Western European countries. As a result, the capitalization of Deutsche Lufthansa and EasyJet airlines decreased by 1.5% and 0.3%, respectively, the shares of TUI tour operator fell by 1.1%.
Oil rose on Monday as US Gulf Coast refineries faced uncertainty over the timing of a restart after Hurricane IDA damaged the region. Natural gas prices in Europe continue to rise. The gas price in the European futures market exceeded $600 per thousand cubic meters for the first time in history. High prices are supported by such factors as low storage levels in Northwest Europe and the uncertainty with the launch of Nord Stream 2.
The US Treasury yields are declining. This indicator correlates inversely with gold and silver prices. As long as the Fed maintains a soft monetary policy, the price of precious metals will rise. Industrial metals are also on investors’ radars right now.
Asia-Pacific stocks have decreased during Tuesday’s morning trading as data shows a slowdown in manufacturing activity in China in August. Japan’s Nikkei 225 index decreased by 0.1%, South Korea’s Kospi lost 0.15%, Hong Kong’s Hang Seng index and China’s CSI300 blue-chip index opened lower by 0.1% and 0.2%, respectively. In response to growing concerns about gaming addiction, Chinese regulators reduced the period of time players can spend playing online games. Users under 18 will only be allowed to play games between 8 p.m. and 9 p.m. local time and only on specific days. Online gaming companies will be prohibited from providing gaming services to minors in any form outside of those hours.
Main market quotes:
- S&P 500 (F) 4,528.79 +19.42 (+0.43%)
- Dow Jones 35,399.84 −55.96 (−0.16%)
- DAX 15,887.31 +35.56 (+0.22%)
- FTSE 100 7,148.01 +23.03 (+0.32%)
- USD Index 92.68 0.00 (0.00%)
Important events for today:
- Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
- Japan Industrial Production (m/m) at 02:50 (GMT+3);
- China Manufacturing PMI (m/m) at 04:00 (GMT+3);
- German Unemployment Rate (m/m) at 10:55 (GMT+3);
- Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- Canada GDP (m/m) at 15:30 (GMT+3);
- US CB Consumer Confidence (m/m) at 17:00 (GMT+3).
