Opening Bell: Fresh US-China Trade Blows Hit Stocks; USD Gains; WTI Drops
Investing.com | Aug 01, 2018 06:30AM ET
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Fresh US-China trade salvos pressure European shares, US futures
- NASDAQ outperforms on Apple's earnings beat and hopes of easing trade war
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Dollar ticks higher, weighs on EM currencies and commodities
- Oil slips on higher output expectations, stronger USD h2 Key Events/h2
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Earnings season continues:
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Tesla (NASDAQ:TSLA), due Wednesday, EPS $2.78 & revenue $4.03 forecast
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Barclays (LON:BARC), due Thursday, EPS $0.28 & revenue $6.94B forecast
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Berkshire Hathaway (NYSE:BRKa), due Friday, EPS 3,398.89 & revenue 61.64B forecast Toyota, due Friday, EPS $3.95 & revenue $65.15B forecast
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The US Treasury is set to release its funding program for the next three months on Aug. 1.
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Central banks in the US, UK, Brazil, and India are meeting over the week.
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The US jobs report comes out on Friday and is predicted to show a healthy labor market, with 190,000 new jobs.
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The STOXX Europe 600 dropped 0.1 percent.
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Futures on the S&P 500 gained less than 0.05 percent.
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The MSCI All-Country World Equity Index slid less than 0.05 percent.
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The MSCI All-Country World Index lost 0.1 percent to the lowest level in more than a week.
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The Dollar Index climbed 0.07 percent, giving up a 0.15 percent advance, forming a shooting star.
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The euro fell less than 0.05 percent to $1.1689.
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The British pound slipped less than 0.05 percent to $1.3123.
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The Japanese yen slid 0.2 percent to 112.10 per dollar, the weakest level in almost two weeks.
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The yield on 10-year Treasuries gained two basis points to 2.98 percent, the highest level in almost ten weeks.
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Germany’s 10-year yield rose two basis points to 0.46 percent, the highest level in seven weeks.
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Britain’s 10-year yield climbed three basis points to 1.33 percent, the highest level in seven weeks.
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The Bloomberg Commodity Index slipped 0.7 percent to the lowest level in more than a week on the most significant fall in more than two weeks.
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West Texas Intermediate crude fell 0.8 percent to $68.19 a barrel, the lowest level in more than a week.
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LME copper declined 1.5 percent to $6,204.00 per metric ton, the lowest level in more than a week on the biggest drop in three weeks.
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Gold lost 0.2 percent to $1,221.18 an ounce, the weakest level in almost 13 months.
A fresh round of trade headwinds hit equity markets on Wednesday, sending European shares and futures on the S&P 500 and Dow Jones lower, while contracts for the NASDAQ 100 managed to edge higher on Apple (NASDAQ:AAPL)’s earnings beat.
The pan-European STOXX 600 opened higher but then started sliding lower erasing most of yesterday's gains.
The Trump administration is said to be reports that talks between Washington and Beijing were set to resume, clouding investor outlook and weighing on Asian equity markets, which closed mixed.
Earlier, in the US session, those same reports boosted trading, allowing investors to rotate into larger cap stocks: the NASDAQ Composite outperformed (+0.55 percent) smaller-cap, domestic shares on the Russell 2000 (+ 0.22 percent).
The SPX climbed 0.49 percent, led by two growth sectors, Consumer Discretionary and Technology. Materials was one of the only two sectors in red, dragged lower by lingering trade worries.
The Dow Jones Industrial Average gained 0.43 percent.
Investor focus will now shift to central bank policy, after the BOJ slightly stepped up its threshold for yields to 0.2 percent from 0.1 percent Tuesday. The Federal Reserve is expected to hold rates at 2.00 percent today and the Bank of England to increase rates to 0.75 percent from 0.50 percent tomorrow.
In other news, the greenback ticked higher against most of its major peers for a second day, weighing on emerging market currencies. Commodities dropped as crude slipped on expectations of an increase in production, as well as on the stronger USD.
Oil is penetrating the bottom of a pennant. Should it close with a downside breakout, it would suggest that prices will continue to fall, toward the uptrend line since mid-November 2017, as sellers lower their asking prices to find willing buyers.
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