vBy Deepta Bolaky
@DeeptaGOMarkets
Attention was predominantly on the exclusive central bank conference this week as it fosters open discussions about global policy matters. In a pandemic-induced environment supported by ongoing fiscal and monetary policies, this year’s theme “Navigating the Decade Ahead: Implications for Monetary Policy” for the symposium was very relevant for investors.
Global stocks traded mixed at the start of the week as investors await updates from central bankers, policymakers and economists to determine whether the current stimulus will likely stay on hold for some time.
We saw new highs in the stock market led by vaccine-related news and the outperformance of the technology stocks. On Thursday, in a much-anticipated speech, Jerome Powell stated that the Federal Reserve will remain accommodative and “appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time”. The Federal Reserve also sent a clear message on the labour market – “A clear takeaway from these events was the importance of achieving and sustaining a strong job market, particularly for people from low- and moderate-income communities.”
All in all, the moderate inflation strategy has confirmed the expectations of low-interest rates and quantitative easing for even longer. Wall Street extended gains compared to its peers.
Source: Bloomberg
Throughout the week, S&P500 and Nasdaq Composite recorded consecutive new highs. Jerome Powell’s speech helped the S&P 500 to notch even higher while pushing the Dow Jones closer towards positive territory for 2020. The latter is yet to reclaim February highs.
Source: Bloomberg
Another notable event was the reshuffling of the Dow – Amgen ($AMGN), Salesforce.com ($CRM) and Honeywell International ($HON) will be added to the index while Pfizer ($PFE), Raytheon Technologies ($RTX) and Exxon Mobil ($XOM) will be removed. The moves were spurred by Apple’s decision to split its stock which will reduce the Information Technology index weight.
Salesforce’s share price rose by more than 30% following the announcement and is currently trading at $276.34.
Source: Bloomberg
Forex Market
In the forex market, major currencies were stronger against the greenback. Major pairs continued to trade within familiar ranges ahead of the Jackson Hole Symposium. Jerome Powell’s speech triggered wild swings in the forex market.
Source: Bloomberg Terminal
The US dollar index which tracks the performance of the greenback against a basket of currencies fell to a low of 92.40 before climbing higher. The Antipodeans and commodity-linked currencies remained among the best performers.
Source: Bloomberg Terminal
Furthermore, on the economic front, the Global Economic Surprise Index by Citigroup shows that global economic data is beating analyst expectations like never before.
Source: Bloomberg Terminal
United States:
Source: Bloomberg Terminal
New Zealand: Retail sales values fell a historic 15 percent in the June 2020 quarter during the COVID-19 lockdown, the biggest drop on record in figures going back 25 years.
Germany:
Budget Deficit: Germany dealt with its first budget deficit since 2013 and recorded its biggest deficit in a decade.
Source: GO MT4
Crude oil prices fell after consecutive sessions of gains. Hurricane Laura and bullish weekly API and EIA reports drove prices higher. Traders are closely monitoring the damage and risk of flooding in the region to determine the impact it may have on the oil and gas industry. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading lower around $42.99 and $45.04 respectively.
Throughout the first half of the week, gold price remains within a range ahead of the symposium. After a volatile session on Thursday following the much-awaited Fed speech, the XAUUSD pair topped the $1,975 pair before retreating back to the $1,935 level.
Source: Bloomberg
By Deepta Bolaky
@DeeptaGOMarkets
Monday, 31 August 2020 Indicative Index Dividends Dividends are in Points |
||||||
ASX200 | WS30 | US500 | US2000 | NDX100 | CAC40 | STOXX50 |
6.697 | 17.147 | 0.411 | 0.248 | 0.111 | 0 | 0.483 |
ESP35 | ITA40 | FTSE100 | DAX30 | HK50 | JP225 | INDIA50 |
0 | 0 | 0 | 3.872 | 0 | 0 |
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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