>>> US Close Dow +1,43% S&P +1,88% Nasdaq +2,24% Russell +2)



Closing Stock Market Summary

The stock market finished decisively in the green on Thursday, as trade angst subsided and investors embraced a risk-on mindset. The S&P 500 advanced 1.9%, which extended its two-day comeback to 112 points, or 4.0%, from its session low on Wednesday. 

The Dow Jones Industrial Average increased 1.4%, the Nasdaq Composite increased 2.2%, and the Russell 2000 increased 2.1%. 

Thursday's positive disposition ostensibly formed overnight after China reported a surprise yr/yr increase in July exports while holding its yuan firm, which again signaled goodwill in trade relations. Today's rally, however, appeared to be more a continuation from yesterday's big intraday reversal that suggested the recent sharp sell-off may have been excessive. 

Interestingly, the S&P 500 traded just below its 50-day moving average (2934) for most of the afternoon before finally breaking above the key technical level late in the session. The benchmark index held above the level on a closing basis.

All 11 S&P 500 sectors finished higher by at least 1.0%. The energy sector (+2.9%) led the advance as oil prices ($52.52/bbl, +$1.38, +2.7%) rebounded, followed by the information technology (+2.4%), communication services (+2.2%), and consumer discretionary (+2.0%) sectors.  

Advanced Micro Devices (AMD 33.92, +4.73, +16.2%) led the Philadelphia Semiconductor Index (+2.7%) higher after it unveiled its well-received server CPUs that Google and Twitter will reportedly use. Broadcom (AVGO 270.98, +0.93, +0.3%) struggled to participate in the chip rally amid news that it is close to purchasing Symantec's (SYMC 22.92, +2.51, +12.3%) enterprise business for about $10 billion.

In earnings news, Booking Holdings (BKNG 1941.01, +119.45, +6.6%), Lyft (LYFT 62.10, +1.81, +3.0%), and Roku (ROKU 122.03, +21.06, +20.9%) outperformed the broader market following positive results and/or upbeat guidance. Kraft Heinz (KHC 28.22, -2.65, -8.6%) disappointed investors with its results.

U.S. Treasuries were under noticeable selling pressure today, which sent the 10-yr yield up 11 basis points to 1.79% at one point during the session. Buyers gradually came back, ultimately leaving the benchmark yield up three basis points to 1.72%. The 2-yr yield finished also finished three basis points higher at 1.61%. The U.S. Dollar Index increased 0.1% to 97.60.

Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and Wholesale Inventories for June:

  • Initial jobless claims for the week ending August 3 decreased by 8,000 to 209,000 (consensus 213,000). Continuing claims for the week ending July 27 decreased by 15,000 to 1.684 mln.
    • The key takeaway from the report is that initial claims continue hovering near multi-decade lows.
  • Wholesale inventories were unchanged in June (consensus 0.2%) on top of an unrevised 0.4% increase in May. Wholesale sales decreased 0.3% in June after decreasing a revised 0.6% (from +0.1%) in May.
    • The key takeaway from the June report and the May revision is that the gap between inventory growth and sales growth is widening, which should exert some pressure on prices.

Looking ahead, investors will receive the Producer Price Index for July on Friday.

  • Nasdaq Composite +21.2% YTD
  • S&P 500 +17.2% YTD
  • Russell 2000 +13.6% YTD
  • Dow Jones Industrial Average +13.1% YTD

>>> Pres Trump reiterates criticism of Fed - Pres Trump tweets: "As your Preside

Pres Trump reiterates criticism of Fed - Pres Trump tweets: "As your President, one would think that I would be thrilled with our very strong dollar. I am not! The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing, John Deere, our car companies, & others, to compete on a level playing field. With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition. We have the greatest companies in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way, and we are still winning. Can you imagine what would happen if they actually called it right?"

FT : Sterling sinks to lowest level in two years against the euro

Sterling sinks to lowest level in two years against the euro
Pound faces abrupt bout of selling pressure as speculation rumbles about November poll

The pound abruptly dropped to a two-year low against the euro in mid-afternoon action in London, after a Financial Times report that Boris Johnson would hold a general election in the “days after” the UK is due to leave the EU on October 31 if he loses a likely confidence vote in parliament.

Sterling slid as low as €1.0794 on Thursday, drawing back to €1.0815 in early afternoon trading with a 0.2 per cent fall from the previous day’s trading. August traditionally shows light trading as many are on holiday, which often makes for bigger moves than normal.

Thursday’s level was the lowest since August 2017. The pound has fallen more than 5 per cent since May 1 against the euro.

Sterling briefly fell as low as $1.2094 before recovering slightly to trade 0.1 per cent lower at $1.2120.

Mr Johnson, UK prime minister, would hold a general election “days after” the UK is due to leave the EU on October 31, should there be a successful parliamentary no-confidence vote in his government, senior aides to the prime minister have said.

“We can’t stop them forcing an election but we control the timetable so we will force the date after October 31,” said a senior 10 Downing Street official. “If there must be a general election, then it will be days after October 31.” 

Another close aide to Mr Johnson did not deny that any election would be held in the first few days of November.