Asia Morning: US Stocks Mixed as Powell Unveils Policy Review

On Thursday, S&P 500 extended its rally to a sixth straight session, and Dow Jones Industrial Average rose 0.6%, while Nasdaq 100 dropped 0.4%.

FED 1

On Thursday, U.S. stocks closed mixed. S&P 500 extended its rally to a sixth straight session, adding 5 points (+0.2%) to 3,484. The Dow Jones Industrial Average rose 160 points (+0.6%) to 28,492, while the Nasdaq 100 dropped 45 points (-0.4%) to 11,926.

Dow Jones Industrial Average daily chart:

Source: Gain Capital, TradingView


The Food & Staples Retailing (+2.58%), Banks (+2.5%) and Insurance (+1.7%) sectors gained the most, while the Media (-1.5%), Retailing (-1.13%) and Semiconductors & Semiconductor Equipment (-1.06%) sectors were the worst performers.

Approximately 59.8% of stocks in the S&P 500 Index were trading above their 200-day moving average and 61.0% were trading above their 20-day moving average.

Federal Reserve Chairman Jerome Powell said they "will seek to achieve inflation that averages 2% over time", meaning that "following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time".

Regarding U.S. economic data, second quarter annualized GDP was revised to -31.7% on quarter (-32.5% expected and -32.9% previously), while initial jobless claims fell to 1.006 million in the week ended August 22 (1 million expected) from 1.104 million in the prior week.

Later today, U.S. personal spending for July (+1.5% on month expected) and Market News International's Chicago PMI for August (52.6 expected) will be released.

European stocks were broadly lower. The Stoxx Europe 600 Index dropped 0.8%, Germany's DAX 30 lost 0.7%, France's CAC 40 slid 0.6% and the U.K.'s FTSE 100 was down 0.8%.

The benchmark U.S. 10-year Treasury yield jumped to a two-month high of 0.7522% from 0.6884% Wednesday.

WTI crude oil futures (October) fell 0.8% to $43.04 a barrel. Hurricane Laura, which caused shutdown of Gulf oil production, had lost its power and was downgraded to a tropical storm. 

Spot gold saw volatile trading, as it marked a day-high near $1,976 before closing at $1,929, down 1.3%.

On the forex front, the ICE U.S. Dollar Index marked a day-low of 92.44 before ending up 0.2% at 92.99, amid mixed reactions to Fed Chairman Jerome Powell's speech.

EUR/USD slipped 0.1% to 1.1820. Later today, the eurozone's Economic Confidence Index for August will be released (85.0 expected).

GBP/USD fell 0.1% to 1.3198. 

USD/JPY bounced 0.6% to 106.57. This morning, official data showed that Japan's Tokyo CPI grew 0.3% on year in August (+0.6% expected).

USD/CAD edged down 0.1% to 1.3125, posting a three-day decline. Canada's second quarter annualized GDP will be released later in the day (-39.4% on quarter expected).

Commodity-linked currencies were broadly higher against the greenback. AUD/USD climbed 0.4% to 0.7260 and NZD/USD rose 0.3% to 0.6640, both up for a third straight session.

More from Indices

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.