News & Analysis

Overnight on Wall Street: Wednesday 02 September 2020

September 2, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Global stocks started September on a mixed after the global benchmark for stocks had its best August on record. Technology stocks continue to outperform amid the currency uncertainties.

Major US equity benchmarks performed better compared to its peers. Weak inflation data in the Eurozone weighed on the European stocks. 


Source: Bloomberg

Wall Street advanced in positive territory and the Dow Jones and S&P 500 pared Monday’s losses.

  • The Dow Jones Industrial Average added 216 points or 0.8% to 28,646.
  • S&P 500 rose by 26 points or 0.8% to 3,500.
  • Nasdaq Composite added 164 points or 1.4% to 11,940.

Currency Markets

In the FX space, the US dollar gained some strength against major G10 currencies on the back of upbeat US Manufacturing data while the New Zealand dollar and the British Pound hold on to gains.


Source: GO MT4

On the economic front, the focus was on the US ISM Manufacturing data:

  • The August PMI registered 56 percent, up 1.8 percentage points from the July reading of 54.2 percent. This figure indicates expansion in the overall economy for the fourth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth. 
  • The New Orders Index registered 67.6 percent, an increase of 6.1 percentage points from the July reading of 61.5 percent. 
  • The Production Index registered 63.3 percent, up 1.2 percentage points compared to the July reading of 62.1 percent. 
  • The Employment Index registered 46.4 percent, an increase of 2.1 percentage points from the July reading of 44.3 percent. 
  • The Prices Index registered 59.5 percent, up 6.3 percentage points compared to the July reading of 53.2 percent. 

The US dollar index which measures of the greenback compared to a basket of currencies moved from a low of 91.70 to reclaim the 92 level.


Source: GO MT4

Similarly, manufacturing data in Germany and the UK also grew but the figures came below expectations:

Germany: Markit Manufacturing PMI came in at 52.2, below expectations (53) in August.  

UK: Markit/CIPS Purchasing Managers’ Index® (PMI®) rose to a 30-month high of 55.2 in August, up from 53.3 in July but a tick below the earlier flash estimate of 55.3. 

In Australia, the RBA kept the interest rate unchanged at 0.25% as widely expected. By keeping interest rates on hold, the RBA has signalled that the economic conditions have not worsened which may boost confidence. The Aussie dollar rallied to a key psychological level of 0.74 mark before retreating slightly lower on a stronger US dollar.


Source: GO MT4

Commodities

Crude oil prices moved higher on Tuesday. On the data front, API Weekly Crude Oil Stock fell from previous -4.524M to -6.36M in August 28 supporting the oil market. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $43.09 and $45.90 respectively. 

Gold

Another day of indecisiveness for Gold where bulls and bears pushed prices in different directions. A stronger US dollar also weighed on the XAUUSD pair. The precious metal reached a high of $1,992.51 before retreating lower to close around $1,964.


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Gross Domestic Product (Australia)
  • Retail Sales (Germany)
  • ADP Employment (Change)
  • Inflation Report Hearings and BoE’s Haldane speech (UK)
  • Factory Orders and Fed’s Beige Book (US)
Thursday, 03 September 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
8.959 0 0.666 0.124 1.52 0 0.206
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 5.972 0 14.04 0 0.415


Disclaimer:  The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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