Stocks slump after a NQ pullback though China support offset the APAC impact
The US stock market falls, with the Nasdaq 100 having its second worst day of the year.
NS
Friday, July 21, 2023 at 05:38AM
The Nasdaq 100, which had its second worst day this year, led the way in the US stock market declines.
APAC stocks mixed as continued support from China partially offsets the headwinds of Wall St.
The Euro Stoxx 50 is down 0.3% after yesterday's cash market ended up 0.3%.
DXY holds onto yesterday's gains. EUR/USD, Cable and USD/JPY are choppy post Japanese CPI.
Highlights for the future include UK Retail Sales and Earnings by Evolution AB (Danske Bank), American Express & Schlumberger.
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US TRADE
EQUITIES
US Stocks
The Nasdaq 100, which had its second-worst day of the year due to poor earnings reports from NFLX and TSLA, led the way. A higher yield environment was also a headwind for equities as they headed into Friday's expiration of monthly stock options and Nasdaq 100 rebalancing.
SPX
-0.68% on 4,534
NDX
-2.28% to 15,466,
DJIA
+0.47% to 35,225
RUT
-0.89% to 1,967
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NOTEABLE HEADLINES
US President Biden has launched a group to end debt ceiling standoffs. The White House will also explore all legal and political options in order to avoid a future standoff.
According to a White House spokesperson, the White House will look at possible actions Congress can take to eliminate default risk.
USTR's Tai and EU's Dombrovskis had an open and honest exchange regarding the deadline of October 31st for a trade agreement on steel and aluminum.
APAC TRADE
EQUITIES
APAC stocks
The market was mixed, as the continued support from China offset some of the negatives on Wall St. where the Nasdaq 100 had its second worst day in the year due to tech disappointments and a rising yield climate.
ASX 200
The market was muted amid losses in the tech, financial and mining sectors. However, the downside was limited due to the absence of catalysts coming from Australia.
Nikkei 225
The market fell at the opening but recovered quickly after currency fluctuations and the somewhat ambiguous CPI figures which were mostly in line but showed a slight increase for both the headline and core inflation.
Hang Seng
You can also find out more about the following:
Shanghai Comp
The NDRC has released a series of policies and measures to encourage the consumption of electronic products as well as automobiles.
US equity futures
The market has been trading sideways as we approach the expiration of monthly stock options and Nasdaq rebalancing.
European Equity Futures
Euro Stoxx 50 is indicating a softening of the opening with -0.3%, after the cash market closed yesterday up by 0.3%.
FX
DXY
The market traded in a range overnight, holding onto yesterday's gains despite briefly rising to just below the 101.00 mark on the backs of recent increases in yields due to the low initial claims data for several months.
EUR/USD
The currency pair struggled to recover after this week's losses and remained below the 1.1200 level.
GBP/USD
While attention is turned to UK Retail Sales, the market tried to salvage some of its losses from the previous day.
USD/JPY
The pair was volatile and traded both on the left and right side of 140.00 after inflation data that were mostly in line. However, the yield differentials are what ultimately support the pair.
Antipodeans
After recent sales pressure and a lack of relevant data releases, people were indecisive.
The PBoC has set the mid-point for USD/CNY at 7,1456 vs. 7.1965 (prev. 7.1466)
China's FX regulator stated that yuan flexibility and the market's understanding of risk-neutrality and two-way fluctuations has also increased.
China will take steps to prevent sharp fluctuations in the exchange rate.
Will use all available policy measures to stabilize expectations and keep the yuan at a balanced level.
The change in reserves will remove TRY 450bln to 500bln of liquidity from the market.
According to Reuters.
Fixed Income
Futures on 10 Year US Dollars
After yesterday's strong selling pressure in advance of the supply, and following the initial data on jobless claims, prices lacked direction. However, they are now off their worst levels since support at 112.00 was held.
Bund futures
After its recent downward slide, the stock was trading below 133.00. It is also near to yesterday's low.
Futures on 10 year JGB
Prices were volatile as participants digested recent inflation data. They also ignored the increased demand from Japan at the enhanced liquidity auction.
COMMODITIES
Crude futures
As the mood improved, Chinese participants joined in.
OPEC+ shifted the online panel a week later, to August 3rd. August 2nd,
According to Reuters sources
The US Senate has voted to ban sales of US strategic petroleum reserves to China
Bloomberg.
Spot Gold
The greenback's recent gains on the market kept prices in check.
Copper Futures
The price of oil has gradually increased with a slight tailwind due to China's assistance measures.
CRYPTO
Bitcoin
The range-bound trading below the psychological USD 30000 level saw some modest gains.
The US House Republicans have introduced a bill to regulate digital assets to protect cryptocurrency investors.
CoinDesk reports that the number of bitcoins has increased by a factor of two.
FTX is suing Sam Bankman-Fried, and other former executives in order to recover hundreds of millions of dollar of alleged fraudulent transfer.
According to Reuters.
Notable Asia-Pacific Headlines
China's NDRC has released policies to increase electronic product consumption
Encourages market players and scientific research institutions to use AI technologies to enhance the intelligence of electronic products.
NDRC has also released measures to encourage automobile consumption. They are encouraging regions with purchase restrictions, to set annual purchase targets and to do so as soon as they can.
According to Reuters.
On Friday, China will explain its anti-espionage laws and restrictions on mineral exports to Japanese, US and EU executives.
According to Jiji
The US ambassador to China has been hacked as part of a spying operation linked to China
According to WSJ sources.
DATA RECAP
Japanese National CPI (Jun.) 3.3% vs. 3.5% (Prev. 3.2%)
Ex. Fresh Food YY - (Jun.) 3.3% vs. Ex. 3.3% (Prev. 3.2%)
Ex. Fresh Food & Energy YY (Jun) 4.2% vs. Exp. 4.2% (Prev. 4.3%)
GEOPOLITICS
Kirby, White House's Kirby, said that cluster munitions were now in Ukrainian hands. They are also being deployed on the field.
He expects another round of Ukraine's support to come in the next few days.
Russia has not been preparing an attack on civilian ships in Black Sea, despite US claims.
According to RIA, citing the Russian ambassador in the US.
US Central Command announced that the US will deploy a Marine Unit following Iran's recent attempt to seize vessels.
UK/EU
NOTEABLE HEADLINES
UK PM Sunak is reportedly looking at holding UK general elections in November 2024, to give the economy the maximum amount of time to recover.
Bloomberg cites sources.
The UK's Sunak won the former Boris Johnson parliamentary seat Uxbridge and South Ruislip, but lost Somerton and Frome as well as Selby and Ainsty in the by-elections.
According to Pippa Crrar of The Guardian, the Selby defeat broke the record as the largest Tory majority overturned in a Labour by-election since 1945.
DATA RECAP
UK GfK Confidence in Consumers (July) -30.0 vs. -26.0 (Prev. -24.0)
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