The US stock markets finished slightly higher to start the week ahead of the critical inflation data, with the second-quarter earnings season kicking in later this week as bond yields slid back following Friday’s weaker-than-expected non-farm payroll data, providing some relief to broad markets. However, it is too early to say that the market has shrugged off the bond jitter as the fear gauge VIX stayed at the recent high of above 15.
The US dollar continued to suffer from weakened expectations for the Fed to stay in a rate hike cycle for long as CME Fed funds futures contracts are pricing in only one more hike before the interest rate peaks. A softened US dollar may provide a bullish factor to commodity prices, particularly in gold.
China’s June CPI grew at a zero pace, suggesting the country faces increasing deflationary issues. However, the Chinese government’s announcement to end its crackdown on tech and an extension of the one-year loan to developers buoyed Chinese stocks, with the Hang Seng Index finishing higher after bouncing off a session low on Monday.
Asian equities are set to open higher, with the Straits Times Index up 0.47%, the Hang Seng Index futures up 0.53%, and the Nikkei 225 futures up 0.50%.
Price movers:
- 7 out of 11 sectors finished higher in the S&P 500, with industrial, healthcare, and energy leading gains, up 1.39%, 0.81%, and 0.76%, respectively. The growth sectors, such as communication services and technology, were the laggards, down 0.92% and 0.02%, respectively. Utility stocks also underperformed, down 0.42%.
- Most big tech names, such as Apple, Microsoft, Alphabet, and Nvidia, lagged in broad markets, all in the red. But Meta Platforms outperformed big techs, up 1.2% as its Threads App hits 100 million users. Twitter’s traffic has slowed since the launch of Threads.
- Weak Chinese economic data pressured the Australian markets and the Australian dollar on Monday. 10 out of 11 sectors in the ASX 200 finished lower, with Consumer Staples leading losses, down 1%. Information Technology was the only sector that ended in the green, up 0.2%. Fortescue Metals and A2 Milk were among the biggest losers, down 2.03% and 2.38%, respectively, due to their reliance on China’s imports. Some gold miners, such as Bellevue Gold and Silver Lake Resources, were in the top performer list on resilient gold prices recently.
- The US-listed Chinese tech shares extended gains after the Chinese government ended its crackdown last Friday. Alibaba was up 0.71%, Baidu rose 1.23%, and JD.com advanced 1.87%. Chinese stock markets showed resilient moves amid the government’s further stimulus measures despite weak economic data.
SGX announcements/news:
- Experts are predicting a 22.6% YoY increase in net profit for Singapore's banking sector.
Today’s agenda:
- Australian Westpac Consumer Sentiment & NAB Business Confidence
Maximize your potential gains! Take immediate action and seize the investment opportunities that await you. Login to the platform now!
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
