2023-07-18 20:44:00
The US stock market continued to rise on the 18th. Earnings of Bank of America (BofA) and Morgan Stanley prompted buying of bank stocks. Buying also returned to stocks related to artificial intelligence (AI).
S&P 500 Stock Index 4554.9832.190.71% Dow Jones Industrial Average 34951.93366.581.06% Nasdaq Composite Index 14353.64108.690.76%
BofA’s trading and investment banking revenues beat analyst expectations in the second quarter. Morgan Stanley executives pointed to an improved outlook. In technology stocks, Microsoft announced the price of AI tools for enterprises. Buying in related sectors across the board.
Both U.S. industrial production and retail sales fell short of expectations in June. The US money market has fully priced in the expectation that next week’s Federal Open Market Committee (FOMC) meeting will decide on a rate hike of 0.25 percentage points.
Traders have been gradually lowering their expected peak policy rate on signs of slowing inflation and an improving economy. Meanwhile, the FOMC’s median forecast calls for two more 0.25-point rate hikes this year to keep inflation at its target level.
Video: “Bloomberg The Open”
Source: Bloomberg
“Private spending is a little more volatile right now,” said Jeffrey Roach, chief economist at LPL Financial. The use of credits has begun to continue.”
Rubira Falqui, chief U.S. economist at High Frequency Economics, agrees. “A still strong labor market, upward real disposable incomes and a gradual easing of price pressures will likely support consumption in the near term,” he said, although high borrowing costs and high prices will continue to constrain private consumption. rice field.
Source: BofA Global Fund Manager Survey
“What is clear is that the theme of receding inflation is driving everything,” said Gilles Gibou, head of European equity strategy at AXA Investment Managers. “Investors are fueled by hope, hope that US interest rates will fall soon and China will introduce stimulus measures to boost consumption,” he said.
The wild card is China, where economic recovery is slow. Investor sentiment is beginning to swell due to concerns regarding spillover effects from the slowdown of the world’s growth engine.
US Treasuries
The US Treasury market sharply reduced its morning gains. After rising with German government bonds, it fluctuated wildly in response to mixed US retail sales. In the followingnoon, yields were reluctant to decline once morest the backdrop of continued high stock prices.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.89%-3.5-0.89% US 10-year bond yield 3.78%-2.3-0.61% US 2-year bond yield 4.76%1.90.40% US Eastern time 16:40
Long-term bonds outperformed in followingnoon trading, narrowing the 5- to 30-year bond yield spread by 1 basis point (bp = 0.01%). The 10-year bond yield rose to around 3.8% before pulling back slightly.
Prices were volatile immediately following June’s U.S. retail sales figures were released. The market rose immediately followingward, but soon slowed down. This was due to the upward revision of past data and the fact that core sales greatly exceeded market expectations.
foreign exchange
In the foreign exchange market, the Bloomberg dollar index rose slightly. U.S. retail sales have made it seem certain that next week’s FOMC will raise interest rates. A flurry of dovish comments from European Central Bank (ECB) officials prompted the euro to erase its gains on European time.
Bloomberg Dollar Index 1202.790.810.07%USD/JPY¥138.84¥0.130.09%EUR/USD$1.1229-$0.0007-0.06% 16:40 US ET
The Bloomberg Dollar Index is near its lowest level since April 2022.
“The dollar is following the path of US rates and yields, with some significant upward correction to resume the rally and begin the smiley curve,” said Valentin Marinov, head of G10 FX research and strategy at Crédit Agricole CIB. will be needed,” he said.
ECB policy committee member Visco said inflation might fall faster than the ECB expected last month as lower energy costs continue to affect broader prices. . Dutch central bank governor Knott, also a member of the ECB policy committee, said no tightening was promised following next week’s meeting.
Euro spot price and 21-day and 55-day moving averages
Source: Bloomberg
The dollar fell 0.7% once morest the yen at one point, and there was a scene where it touched 137.70. European traders said there was some buying interest in options around the lows.
crude
Crude oil futures in New York rebounded. Amid widespread risk-on sentiment across financial markets, there were signs that Russia was actually curbing supply, as it had said it would be.
Russian seaborne crude oil supplies fell to their lowest level in six months in the last four weeks. Rate hikes are likely to slow or halt following the Federal Open Market Committee (FOMC) meeting in July following U.S. retail sales growth fell short of market expectations. Observation strengthened.
The West Texas Intermediate (WTI) futures contract on the New York Mercantile Exchange (NYMEX) for August closed at $75.75 a barrel, up $1.60 (2.2%) from the previous day. London ICE’s North Sea Brent September delivery rose $1.13, or 1.4 percent, to $79.63.
Money
The New York gold market rebounded. Hawkish European Central Bank (ECB) policy committee member Knott, the governor of the Dutch central bank, said no tightening was promised following next week’s meeting. Yields on government bonds, including US Treasuries, fell following his remarks, boosting non-interest-bearing gold.
ECB Knott refutes September rate hike prospects – no commitments (1)
U.S. retail sales growth for June was lower than expected, according to a report released today. While that might be a welcome sign for the Fed’s efforts to keep inflation under control, the data came as expected when excluding cars and gasoline, suggesting relatively strong spending.
Investors want a clearer view of the trajectory of U.S. monetary policy.
The New York Mercantile Exchange (COMEX) futures contract for August closed at $1,980.80 an ounce, up $24.40, or 1.3%, from the previous day. Gold spot price rose 1.1% to $1,976.54 as of 2:39 pm New York time.
Original title:US Equities Gain as Banks, AI-Linked Stocks Rally: Markets Wrap(excerpt)
Treasuries Gain Post-Retail Sales, Ease Off High as Stocks Rally（抜粋）
Dollar Ekes Out Gain in Choppy Trading, Euro Slips: Inside G-10（抜粋）
Oil Rises as Russian Exports Slow, Rate Hikes Expected to Stop(excerpt)
Gold Climbs as Bond Yields Fall After Comments by ECB Official(excerpt)
1689716825
#U.S #market #conditionsStocks #continue #rise #banking #stocks #strong #due #financial #resultsbuy #AIrelated #stocksBloomberg
