By IFCMarkets
US stocks closed lower on Tuesday after a volatile session. The dollar edged higher for a third session, with the ICE US Dollar Index, a measure of the dollar’s strength against a basket of six currencies, adding 0.2%. Investor optimism was undermined by weakness in overseas markets despite positive report on home construction in July. The S&P 500 fell 0.3%, as nine out of ten sectors edged lower with only consumer discretionary stocks recording gains. Housing starts rose 0.2% in July to the highest annual rate since October 2007, while permits for new construction fell 16.3%. Shares of Wal-Mart tumbled 3.4% as it cut its earnings outlook for the year and earnings missed analysts’ forecast. Home Depot shares rose 2.6% after the home-improvement store lifted its outlook following better-than-expected sales growth. Today at 12:00 CET Mortgage Applications will be released in America. At 13:30 CET July consumer price index will be published. The tentative outlook is positive. At 15:30 US crude oil inventory will be published by Energy Information Administration. And at 19:00 CET Federal Open Market Committee’s July 28-29 meeting minutes will be released.
European stock indices edged lower on Tuesday as positive corporate reports were outweighed by fall in commodity related shares. The euro weakened against the dollar. The Stoxx Europe 600 gained 0.2%, while Germany’s DAX 30 ended lower 0.2%, France’s CAC 40 lost 0.3%. Shares of companies with substantial exposure to China fell together with energy and mining stocks. The Spanish, Austrian and Estonian parliaments approved the agreement on Tuesday that would give Greece emergency funding in exchange for more austerity measures. Today German and Dutch parliaments will vote on Greece’s new bailout plan. Euro-zone’s current account for June will be released today at 9:00 CET, the tentative outlook is positive. At 10:00 CET June construction output will be released.
Nikkei fell 1.6% to more than five-week low today as yen continued strengthening and concerns persisted over prospects of Japanese exports to China in light of China’s slowdown and currency devaluation. Ministry of finance report today showed trade deficit in July increased more than threefold to 268.1 billion yen ($2.15 billion), the fourth straight month of shortfall, as exports rose 7.6% on year but imports fell 3.2%.
Chinese stocks rose today while the yuan held steady. The official data released today showed year to date foreign direct investment in China increased 7.9% from a year earlier, amounting to $73.62 billion.
Oil prices are falling today after rebounding on Tuesday on bullish US economic data and expectations of falling US crude inventories, to be reported today. The outlook for oil remains bearish as China’s slowdown is expected to weigh on global demand growth and US demand is expected to fall in autumn after peak summer season.
Free Reports:
Copper prices fell 1.5% to six-year low on Tuesday after a 1.3% drop the previous day on concerns China’s demand for copper, which is one of world’s biggest importer of the metal, will fall with the slowdown of its economy.
Gold is rising today after edging lower on Tuesday. Gold prices rallied last week after China’s unexpected devaluation of yuan gave rise to speculation the Federal Reserve may not move to hike interest rates in light of apparent start of a currency war. Traders will be watching closely today the minutes of Federal Reserve’s July 28-29 meeting for guidance on the timing of the rate hike.
Market Analysis provided by IFCMarkets