Gold Rose to Record High
Market Reviews • 27th Jul, 20
The Dollar extended its recent slide and gold rose to a record high as investors mulled simmering Sino-American tensions, the upcoming Federal Reserve meeting and signs the virus spread in the US may be slowing. Global stocks were mixed.
The Bloomberg Dollar Spot Index fell as much as 0.80% to its lowest in about a year and a half. Shares fluctuated in Japan, Hong Kong and Australia, while US and European futures climbed after last week’s declines. A 10% surge in Taiwan Semiconductor Manufacturing Co. led shares in Taipei toward a record high.
Silver rose as investor appetite for precious metals continued. Treasuries edged higher.
Investors this week will be looking to the Federal Reserve’s meeting for clues on what comes next for policy amid expectations for more accommodation ahead. That comes as wrangling continues in Washington over a stimulus bill. On the virus front, cases fell in California, Arizona, Florida and New York.
Elsewhere, Oil edged lower after last week’s gain. Bitcoin climbed back above $10,000.
Here are some key events coming up:
- Earnings include, Apple, Amazon.com, Alphabet, Chevron, Rio Tinto, L’Oreal, Caterpillar, Samsung, Barclays and Credit Suisse
- The Federal Open Market Committee holds its policy meeting on Tuesday, with an announcement due on Wednesday
- US second-quarter GDP is expected on Thursday
- China PMI data comes Friday
These are the main moves in markets:
Stocks:
- Futures on the S&P 500 rose 0.40% as of 7.00 am in London. The gauge fell 0.60% on Friday
- Japan’s Topix Index rose 0.20%
- South Korea’s Kospi added 0.70%
- Hong Kong’s Hang Seng fell 0.40%
- Shanghai Composite rose 0.30%
- Euro Stoxx 50 futures gained 0.20%
Currencies:
- The Yen rose 0.50% to 105.62 per Dollar
- The offshore Yuan gained 0.20% to 7.0024 per Dollar
- The Euro bought $1.1702, up 0.40%
- The Bloomberg Dollar Spot Index fell 0.60%
Bonds:
- The yield on 10-year Treasuries dipped to 0.58%
- Australia’s 10-year bond yield rose about three basis points to 0.89%
Commodities:
- West Texas Intermediate Crude Oil fell 0.20% to $41.21 a barrel
- Gold was at $1,936 an ounce, up 1.80%
US Market Wrap
US equities dropped for a second day as rising US-China tensions, debate over another stimulus package and slower-than-expected economic recovery all contributed to investor concern.
Markets:
- S&P 500 down 0.60%
- Dow Jones Industrial Average lower by 0.70%
- Nasdaq Composite retreated 0.90%
- Russell 2000 dropped 1.50%
- 10 of 11 main S&P 500 sectors closed lower
- Consumer discretionaries up 0.30%
- Information technology down 1.20%
- 10-year Treasury yield at 0.59% vs 0.58% Thursday
- Bloomberg Dollar Spot down 0.40% (5th decline in six days)
Politics:
- Virus update: McDonald’s and Chipotle Mexican Grill joined the growing list of retailers requiring customers to wear face coverings in their stores. California reported a second straight day of record deaths. Florida’s Covid-19 hospitalisations hit a new high, though deaths declined
- The Trump administration’s decision to shutter the Chinese consulate in Houston followed years of frustration about criminal and covert activity directed by Beijing to steal trade secrets and carry out malign influence operations across the US
- New York Governor Andrew Cuomo called for an investigation into the Department of Homeland Security’s botched attempt to ban New Yorkers from programmes that allow pre-screened travellers to breeze through airport passport and customs checks
Economy:
- New-home sales in the US increased to an almost 13-year high in June, fuelled by record-low borrowing costs and adding to evidence that residential real estate is a bright spot for the economy
- Bridgewater Associates, the world’s biggest hedge fund firm, said it’s planning job cuts because it won’t need the same number of support staff as more employees work from home and new technologies are changing the types of people it needs to serve clients
On Monday:
- June Prelim. Durable Goods Orders, Cap Goods Orders 8.30 am
- July Dallas Fed Mfg Activity 10.30 am
