Investing.com | Aug 13, 2020 07:18
Contracts for the four major US indices—the S&P 500, Dow Jones, NASDAQ and Russell 2000—wavered on Thursday and European stocks headed lower as a resolution to the US coronavirus relief package standoff remains mired in politics and markets await today's US jobless data.
The dollar extended a decline and oil advanced.
US futures edged lower the morning after the S&P 500 finished a mere 0.2% from its highest point on record yesterday.
The Stoxx Europe 600 Index opened lower, pulled down by bank shares and mining stocks. Dutch insurer Aegon (AS:AEGN) plummeted 12% after it missed revenue estimates. Earnings were down 31% for the first half of 2020 prompting the company to cut its dividend by 67%.
Technically, Aegon found resistance at the 200 DMA, keeping it from pushing higher, forming a H&S continuation pattern, complete with a downside breakout below 2.50. The monthly chart shows the stock completed a massive H&S continuation pattern, going back to the 2008 crash—suggesting the company’s troubles are structural and significantly predate the coronavirus pandemic.
During the Asian session, most indices were higher, with the noted exception of Australia’s ASX 200, (-0.7%). The regional benchmark was pressured by telecommunications company Telstra (ASX:TLS), financial services firm AMP (ASX:AMP) (OTC:AMLTF) and utility provider AGL Energy (ASX:AGL) which all reported shrinking profits—exacerbating concerns of economic hardship due to COVID-19.
Chinese stocks, both on the mainland Shanghai Composite as well as in Hong Kong’s Hang Seng were flat. Japan’s Nikkei outperformed, (+1.8%), soaring to a six month peak as regional investors kept the faith that the Sino-US trade deal will remain intact after a key meeting between the two economic powerhouses this coming weekend.
Wednesday, during the New York session, US stocks advanced, fueled by ongoing, muscular demand for technology stocks. The NASDAQ surged 2.1%, outperforming the other major indices. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Tesla (NASDAQ:TSLA) each provided a significant boost. And while all 11 sectors of the S&P 500 rose, the gains were mainly due to the Technology sector (+2.25%).
Our opinion on this equity rally amid the pandemic remains: it's nothing short of incredible...and that's not meant in a complimentary way. Investors are placing their faith in a Fed that continues to promise “infinite QE,” even if it’s economically untenable and traders continue to think that President Donald Trump will simply not let the stock market crash ahead of his reelection bid.
Investors have returned to Treasuries, including the 10-year benchmark note, after yields jumped the most since early June.
The Dollar Index appears to be developing a continuation pennant, at the bottom of a massive, rising channel, in place since 2009. The bottom of the channel can be seen peeking up, in red, at 92.00.
Gold gave up a second day advance.
Given that both the dollar and US futures are down, and the VIX is rising, this latest price decline could be nothing more than profit-taking.
The price of WTI is now the highest it's been since March. It extended the rise above the 200 DMA for the first time since January, for the second day. It may be breaking out of a continuation pennant. Still, it's not clear how much of an oil price recovery we can actually expect during the remainder of 2020.
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.