2023-07-21 20:39:00
On the 21st, the US stock market continued to sell to tech stocks. After a string of weaker-than-expected results this week, investors turned their attention to next week’s results.
S&P 500 Stock Index 4536.341.470.03% Dow Jones Industrial Average 35227.692.510.01% Nasdaq Composite Index 14032.81-30.50-0.22%
The tech-heavy Nasdaq 100 index fell 0.3%. The day before, Netflix and Tesla’s financial results were disappointing, and technology stocks were down.
American Express is down 3.5% on this day. Total revenue growth fell short of analyst expectations in the quarter. Next week, Alphabet, ExxonMobil and Meta Platforms report earnings.
“We’re likely going to need strong results and outlook next week to maintain momentum,” said Citigroup’s Scott Cronert. Pointing to the fact that Netflix and Tesla were sold this week, he said, “It suggests that the hurdles to backing up current valuations are pretty high.”
The market was volatile today as a large number of options entered final trading ahead of the Nasdaq 100 index rebalancing on the 24th. The rebalancing is intended to reduce the dominance of large tech stocks.
Whether the rally of a handful of mega-cap stocks and the artificial intelligence (AI) frenzy can sustain remains a big focus in the stock market. The S&P 500 is already above most year-end expectations, baffling strategists who expected another bad year on the cusp of a recession.
“The market is taking a breather following a few weeks of madness,” said Ken Mahoney, CEO of Mahoney Asset Management. “There are still plenty of stocks that might see more upside from here. After experiencing a terrible sell-off last year, who hasn’t been surprised that the market has regained momentum?”
Video: Bloomberg Television
Source: Bloomberg
US Treasuries
U.S. Treasuries rose slightly. The 10-year bond yield remained in a narrow range. The week has been mixed, with the yield curve flattening. The swap market is fully priced in for a rate hike at next week’s Federal Open Market Committee (FOMC) meeting. Both 20-year and 10-year inflation-protected Treasuries (TIPS) auctions saw strong demand.
Treasury Bond Latest Price Change Rate (bp) US 30-Year Yield 3.90%-1.1-0.28% US 10-Year Yield 3.83%-1.5-0.40% US 2-Year Yield 4.84%0.50.10% US Eastern Time 16:38
Trading in US Treasury futures was thin, regarding 10% below the 20-day average. With no key economic data to be released, Federal Reserve officials are in a blackout period during which they refrain from making public statements.
A series of upcoming auctions next week also supported the flattening trend in yields. Two-year notes worth $42 billion are due on Thursday, five-year notes worth $43 billion on Thursday, and seven-year notes worth $35 billion on Thursday.
foreign exchange
In the foreign exchange market, selling to the yen increased. The Bank of Japan sees little need to urgently deal with the side effects of the yield curve control (YCC) policy at this point, according to an interview with a person familiar with the matter. The Bloomberg Dollar Index rose for a fourth straight day. It was the best week since February.
Bloomberg Dollar Index 1215.324.430.37%USD/JPY¥141.77¥1.701.21%EUR/USD$1.1128-$0.0002-0.02% 16:38 ET
Ahead of the Bank of Japan’s monetary policy meeting, which will be held on the 27th and 28th, it is believed that the review of the YCC will be the subject of discussion. June’s nationwide consumer price index (core CPI excluding fresh food) expanded from the previous month. The stickiness of inflation has been demonstrated once once more.
US dollar spot rate once morest yen (right axis), US dollar 1-week risk reversal once morest yen (left axis)
Source: Bloomberg
The Bloomberg Dollar Index is at its highest level since March 11. 1% up for the week. It was down nearly 2% last week.
The euro fell 0.9% once morest the dollar in the week. Speculators closed long positions and took profits.
crude
The New York crude oil futures market continued to rise. In the midst of light trading in the summer, the weekly price rose for the fourth consecutive week. There are also tentative signs that global markets are tightening.
Russian seaborne crude oil supplies fell to their lowest level in six months in the last four weeks. China, the world’s largest oil importer, is stepping up efforts to boost its economic recovery.
West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) for September contract closed at $77.07 a barrel, up $1.42 (1.9%) from the previous day. London ICE’s North Sea Brent September delivery rose $1.43, or 1.8%, to $81.07.
Money
The New York gold market continues to fall. Selling dominated on the back of a stronger dollar. Price pressures in major countries have eased, and there are moves to review how much additional monetary tightening will be implemented, and it has been high for three consecutive weeks on a weekly basis.
Christopher Looney, a strategist at RBC Capital Markets, said the bullish scenario for gold “still holds strong” as the Fed nears the end of its tightening. However, investors may become less risk-averse, which might make gold less attractive as a hedge, he added.
Spot prices were down 0.3% to $1,962.77 an ounce as of 3:01 pm New York time. December futures on the New York Mercantile Exchange (COMEX) fell by $4.50, or 0.2%, to close at $2005.30.
Original title:Tech Slides With Eyes on Earnings in Week Ahead: Markets Wrap(excerpt)
Treasuries Eke Out Small Gains to End Week Mixed, Curve Flatter（抜粋）
Yen Drops on BOJ Bets, Dollar Extends Weekly Gain: Inside G-10（抜粋）
Oil Posts Weekly Gain as Global Supplies Tighten, Volumes Thin(excerpt)
Gold Set to Eke Out Third Weekly Gain on Hope Rates Nearing Peak（抜粋）
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