The stock markets mixed into a wobbly session - strength only in the energy and financial services industries

• GLOBAL CAPITAL MARKETS OVERVIEW:

US stocks were mixed late on Monday, with the Nasdaq and S&P 500 falling slightly. However, the Dow rebounded after falling for five consecutive trading days. The Democratic Party of the U.S. House of Representatives will propose a comprehensive tax increase plan for businesses and the wealthy. The Dow rose 154.46 points, or 0.45%, to 34762.18 points; the Nasdaq fell 56.61 points, or 0.37%, to 15058.88 points; the S&P 500 index fell 5.61 points, or 0.11%, to 4,452.97 points. Apple stock price rose. the judge in California made a ruling and supported most of Apple's requests and motions. Epic Games was required to pay about 3.6 million U.S. dollars in damages, but the reversal of the Apple App Store's provisions (anti-steering provisions) issued a permanent ban. Apple will hold an event on Tuesday, possibly introducing a new iPhone and other hardware. This week, US officials will announce the latest inflation and consumer spending data. Traders will pay close attention to inflation data to monitor whether rising price pressures are further expanding and use this to determine whether the Fed may need to intervene early to avoid a continuous surge in inflation. Economists generally predict that the US August Consumer Price Index (CPI) will rise 5.3% year-on-year on Tuesday. The CPI in July rose 5.4% year-on-year, a record high in more than ten years. At the close in Toronto, Canada, the Toronto S&P/TSX Composite Index rose 0.16%. 562 stocks on the Toronto Stock Exchange rose, more than the number of declining stocks-445, while 94 stocks remained unchanged, basically unchanged. The German stock market was mixed on Monday, with rising sectors such as insurance, utilities, and telecommunications leading stock indexes higher; at the same time, declines in retail, pharmaceuticals, and healthcare and technology sectors pushed stock indexes lower. The top stock markets in Europe closed on Monday, with investors responding to optimistic signs of economic recovery. The German Ministry of Economy has forecast "significant" growth in the country's GDP in the third quarter. Isabel Schnabel from the European Central Bank said the temporary increase in inflation would dissipate by next year. British Prime Minister Boris Johnson has stated that the government will take the necessary steps to protect the country from another wave of the virus. Still, it does not rule out further containment. Meanwhile, British medical authorities have also recommended Pfizer's jab for children between 12 and 15. At the close in Frankfurt, Germany, the DAX 30 rose 0.59%, while the MDAX index fell 0.81%, and the TecDAX index fell 1.93%. The best performing stock in DAX 30 was Daimler AG, which rose 4.07% (2.810 points) and closed at 71.830. At the same time, the German Continental Group rose 3.64% (3.93 points) to close at 111.87; the German BMW Motor Company rose 3.25% (2.570 points) to close at 81.565 in late trading. The weakest stock on the disk was Delivery Hero AG, which fell 1.83% (2.40 points) and closed at 129.00. Deutsche Börse fell 0.93% (1.330 points) to close at 141.950; Infineon fell 0.93% (0.348 points) to 37.090 at the close. The best-performing stocks in the MDAX were K&S AG, which rose 3.08% to close at 12.560; Hochtief AG rose 3.04% to close at 70.40; ThyssenKrupp Bo rose 2.90% to close at 9.440. The worst-performing stock, Sartorius AG Vz, eventually fell 4.59% to close at 565.000 in late trading; TeamViewer AG fell 4.43% to close at 28.49; in addition, Qiagen NV fell 4.03%, and the closing price was 45.105. The best-performing stocks in the technology index (TecDAX) were Deutsche Telekom, which rose 0.86% to close at 17.510; Telefonica Deutschland Holding AG rose 0.75% to close at 2.423 at the close; Freenet AG rose 0.39% to close at 21.985.The worst-performing stock, Sartorius AG Vz, eventually fell 4.59% to close at 565.000 in late trading; TeamViewer AG fell 4.43% to close at 28.49; in addition, Qiagen NV fell 4.03%, and the closing price was 45.105. On the Frankfurt Stock Exchange, 369 stocks rose, more than the number of declining stocks-326. At the same time, 76 stocks remained unchanged. DAX New Volatility, which measures the implied volatility of DAX 30 options, rose 2.30% to 21.31. The UK stock market closed higher, with rising sectors such as oil and gas producers, natural gas, water, multi-purpose facilities and household goods, and residential construction, leading to the higher stock index. At the close in London, the Investing.com UK 100 rose 0.14%. The best performing stock in the Investing.com UK 100 was NK Rosneft PAO DRC, which rose 3.26% (0.24 points) to a closing price of 7.60. At the same time, CENTRICA rose 3.02% (1.50 points) to close at 51.20; EasyJet (rose 2.94% (16.83 points) in late trading. It closed at 590.00. The weakest stock on the disk was Auto Trader Group Plc, which fell 3.05% (19.60 points) and closed at 622.40. Burberry fell 2.55% (49.0 points) to close at 1875.0; British United Foods fell 2.36% (46.5 points) to 1923.5 at the close. On the London Stock Exchange, 1024 stocks rose, surpassing the number of declining stocks-956. At the same time, 477 stores remained unchanged. The Nikkei 225 index has soared about 2,700 points in the past two weeks. On Friday (10th), the closing price hit a seven-month high, triggering profit-making pressure, coupled with Toyota's expansion of production and the decline of related stocks. the Nikkei Index fell nearly a hundred points at one time. However, the Nikkei Index sharply pulled in late trading and turned red, driven by the rise in semiconductor-related stocks. It rose by 0.22% or 65.53 points in the end. , To close at 30,447.37 points, rising for the second consecutive trading day, continuing to hit a new closing high for about seven months (since February 16). The Topix Index (TOPIX) rose 0.29% (up 6.06 points) to close at 2,097.71 points, rising for the second consecutive trading day, setting a record close for 31 years. The first section of the East Stock Exchange had 1,533 gainers, 554 losers, and 101 firms that remained flat. As a result, today's turnover of the First Section of the East Stock Exchange was 2,850.4 billion yen, which is the 32nd consecutive trading day above the 2 trillion yen mark, which shows the active limit of buying gas. In terms of the performance of stocks, 25 of the 33 stocks in the First Section of the Top Securities rose, among which stocks in the steel industry saw the most significant gains, followed by oil/coal products, banking, and warehouse/transportation-related industries. According to the MoneyDJ XQ global winner system quotation, as of the close of the Japanese stock market, the U.S. dollar appreciated against the yen (i.e., the yen depreciated) 0.15% to 110.04; the U.S. dollar appreciated 0.15% against the yen on the 10th, three transactions It rose for the first time in the past few days. Japanese semiconductor-related stocks rose. Equipment maker Tokyo Weiliktron rose 1.50%, Advantest soared 1.98%, and silicon fab SUMCO rose 1.18%. Japanese Apple concept stocks rose. Murata Manufacturing Co. rose 0.72%, Taiyo Yuden rose 0.97%, and the Alps rose 1.98%. The demand for the new iPhone is booming, and Apple is expected to capture 1/3 of the global 5G smartphone market. Toyota Motor plunged 1.65%, and component supplier Denso dropped 1.95%. The epidemic in Southeast Asia has been tragic, and the utilization rate of suppliers has declined. Toyota has expanded its production worldwide. Production will be cut by half in September and another 40% in October. Mitsui Hi-Tech soared 21.19%, lit up the daily limit, and closed at 8,580 yen, a record closing record since its listing. Orders for lead frames and electric vehicle parts are excellent, and Mitsui High-Tech has upgraded its financial estimates. Japanese tire manufacturer Toyo Tire fell 1.28%. The lack of labor in the United States has impacted local Japanese manufacturing production, and Toyo was forced to cut production. Japanese telecom company KDDI fell 0.08%. KDDI announced that it has cooperated with SpaceX under the well-known entrepreneur Elon Musk to provide low-orbit (LEO) satellite communications services in Japan.

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- HK: According to the prospectus, as of June 30, 2021, Himalaya's revenue in the first half of the year was 2.51 billion yuan, a year-on-year increase of 55.5%. The monthly active users of all scenarios have reached 262 million, including 151 million monthly active users of IoT and other third-party platforms. . Tencent, China Reading, Baidu, Xiaomi, Good Future, and Sony Music are strategic investors in Himalaya.

- HK: Yunnan Water announced on the Hong Kong Stock Exchange that the company is considering a possible spin-off of Yunnan Solid Waste Investment Co., Ltd. and independent listing on a stock exchange recognized by the People's Republic of China. Yunnan Solid Waste is currently a wholly-owned subsidiary of the company, directly holding shares. It is principally engaged in solid waste treatment project investment, solid waste treatment technology, and equipment research, development, and consulting.

- HK: Tencent Holdings announced on the Hong Kong Stock Exchange that it would buy back 220,000 shares today at the cost of 105 million Hong Kong dollars at a repurchase price of 471.2-480.2 Hong Kong dollars.

- US: The U.S. Department of Agriculture released the World Agricultural Supply and Demand Estimates (WASDE) on September 10, stating that in the 2021/22 season, the U.S. wheat ending stocks are estimated to fall to an 8-year low of 615 million bucks, which is higher than that. The annual decrease was 27%, and 12 million British buckets revised the previous month’s estimate. This was mainly due to a 10 million British bucket reduction in the estimated import volume and a 2 million British bucket increase in the estimated food consumption. Estimates of U.S. wheat production and exports remain unchanged, at 1.697 billion bucks (46.18 million tons) and 875 million bucks (23.81 million tons), respectively. Among the major wheat exporting countries, Argentina’s wheat output is estimated to be reduced by 500,000 tons to 20 million tons from the previous month, Australia’s wheat output is estimated to be increased by 1.5 million to 31.5 million tons from the previous month, and Canadian wheat production is estimated to be reduced by 1 million from the previous month. To 23 million tons, EU wheat production forecast is raised 400,000 tons from the previous month to 119 million tons. Australia’s wheat export forecast is increased by 1 million tons to 23 million tons from the previous month. In comparison, the Canadian wheat export forecast is lowered by 500,000 tons from the previous month to 17 million tons. India’s wheat production forecast is raised by 1.5 million tons to 109.5 million tons from the previous month. The export volume forecast is also increased by 800,000 tons to 3.5 million tons from the last month.

- US: U.S. corn production is estimated to be increased by 6.25 million tons to 381 million tons (15 billion bucks) from the previous month, mainly due to the impact of the increase in yield and harvest area estimates; corn export estimates are also raised by 900,000 tons from the last month to 62.87 million tons (2.5 billion bucks), corn ending stock estimates are grown 4.2 million tons from the previous month to 35.77 million tons (1.4 billion dollars). According to the report, this year's U.S. corn production is estimated to increase by 1.7 acres per year to 176.3 acres per acre. The corn harvest area is also estimated to increase by 600,000 acres to 85.1 million acres. Among the significant corn exporting countries, Argentina’s corn production is estimated to be up 2 million tons to 53 million tons from the previous month. The corn export forecast is also up 2 million tons to 38 million tons from the previous month. On the other hand, Russia’s corn production forecast is lowered by 1 million tons from the previous month to 15.5 million tons. The export volume forecast is also reduced by 200,000 tons from the previous month to 4.8 million tons. Brazil’s corn production and export estimates remain unchanged, at 118 million tons and 43 million tons, respectively. Corn production in China has been revised by 5 million tons from the previous month to 273 million tons, while the forecast for imports remains unchanged at a new high of 26 million tons.

- US: U.S. soybean production is estimated to be raised by 35 million bucks to 4.4 billion dollars (119 million tons) from the previous month. This is mainly due to the increase in unit production estimates from 50 bucks per acre to 50.6 bucks per acre in the last month. The assessment is 300,000 acres lower than the previous month. The forecast for US soybean ending stocks is revised by 30 million British buckets from the previous month to 185 million British buckets (5.04 million tons). Among the two largest soybean exporters in South America, Brazil’s soybean production is estimated to increase by 7 million tons per year to reach a record high of 144 million tons, and the export volume is also counted to increase by 11 million tons per year to get a record high of 93 million tons, which is in line with the previous month’s forecast. Estimated the same. Argentina's soybean production is estimated to increase by 6 million tons per year to a record high of 52 million tons. Soybean exports are estimated to increase by 1.15 million tons per year to 6.35 million tons, the same as the previous month's estimate. China's soybean imports are estimated to increase by 2 million tons per year to a record high of 101 million tons, the same as the previous month's estimate.

- US: This Thursday, the US Department of Commerce will release August retail sales data. Analysts believe that this data will show the impact of rising prices and the rapid spread of new crown delta strains on consumer spending. On average, the market expects August retail sales data to fall by 0.8% year on year. The data for July was a decrease of 1.1%. The market is still paying attention to the prospect of tax increases in the United States. This week, the Ways and Means Committee of the US House of Representatives will discuss raising the corporate income tax rate from 21% to 26.5% and raising the minimum income tax rate for overseas corporate profits from 10% to 16.5%. It is expected that lawmakers will also propose to raise funds by expanding the enforcement of the Internal Revenue Service, possibly including tax increases for companies and high-income individuals. Democrats in the House of Representatives are also considering increasing the maximum capital gains tax rate from 23.8% to 28.8%, increasing the maximum tax rate for those with an annual income of more than $400,000 from 37% to 39.6%; and imposing an additional tax for those with an annual income of more than $5 million. 3% additional tax.

- EU: At a meeting attended by the Italian Minister of Health Speranza and the Commissioner of the New Coronary Pneumonia Epidemic Emergency Committee, Ferriolo, the Italian government decided to vaccinate the immune-compromised population with the third dose of the new crown from the September 20 vaccine. The Italian New Coronary Pneumonia Epidemic Emergency Committee stated that the Italian Ministry of Health has begun coordinating with the central regions to determine the population standards for vaccination, update system information, and prepare nationwide vaccination. To this end, the emergency committee will reserve more new crown vaccines.

- EU: Economic-sensitive sectors, including banks, automakers, oil and gas, and construction and materials, rose from 0.8% to 1.2%. Last week, the European Central Bank raised its growth and inflation forecasts for this year and beyond, as the euro area economy recovers faster than anticipated. The German pet supply retailer Zooplus AG increased by 7.8%. After Hellman & Friedman raised its takeover bid to EUR 3.29 billion (USD 3.89 billion) on an initial offer of EUR 3 billion. Associated British Foods decreased by 2.2%, with quarterly sales to Primark lower than forecast, but it raised its profit outlook for the entire year.

- GB: On Sunday, the Scottish National Party (SNP) held an autumn meeting. It was proposed at the meeting that Scotland should have a second referendum on whether to leave Britain. The leader of the National Party, Sturgeon, said that a referendum will be held when the new crown epidemic is "controllable," no later than the end of 2023. British Prime Minister Johnson stated that he would not approve a referendum in Scotland again. However, the Secretary of State for Scotland said that if polls show that 60% of Scots want a referendum, the British government may allow the referendum.

 

• LOOKING AHEAD:

Today, investors will receive:

- GBP: Average Earnings Index 3m/y, Claimant Count Change, and Unemployment Rate.

- JPY: Revised Industrial Production m/m.

- CHF: PPI m/m.

- EUR: German Buba President Weidmann Speaks.

- USD: NFIB Small Business Index, CPI m/m, and Core CPI m/m.

- CAD: Manufacturing Sales m/m.

- NZD: Current Account.

- JPY: Core Machinery Orders m/m.

- AUD: Westpac Consumer Sentiment.

- CNY: Retail Sales y/y, Fixed Asset Investment ytd/y, Industrial Production y/y, and Unemployment Rate.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- European stocks closed the main stock indexes generally rose, the German DAX30 index rose 0.57%; the UK FTSE 100 index rose 0.56%; France CAC40 index rose 0.2%; the European Stoxx 50 index rose 0.46%.

- The three major US stock indexes collectively opened higher. The Dow rose 0.66%, the Nasdaq rose 0.59%, and the S&P 500 index rose 0.69%. Large technology stocks generally rebounded. Apple rose by more than 1%. Previously, in response to the Epic ruling, the business model will not change.

- European natural gas futures continue to hit a new historical high, now at 750 US dollars per thousand cubic meters.

- US stock futures rose strongly, and the prevalence of risk appetite became a key factor supporting the risky currency, the Australian dollar. However, thanks to the Fed’s expectation of announcing its balance sheet reduction plan, as the US dollar is broadly strengthening, the exchange rate’s upward trend lacks support.

- The price of gold futures December options contract rose by 0.16% (2.95 points) to 1,795.05 US dollars. In terms of the remaining futures, the October delivery WTI crude oil futures contract price rose 1.08% (0.75 points) to $70.47, while the November London Brent crude oil futures contract rose 0.78% (0.57) to trade at $73.49.

 

• STOCK MARKET SECTORS:

- High: Energy, Financials.

- Low: Consumer Discretionary, Health Care, Information Technology.

 

• TOP CURRENCY MARKET DRIVERS:

- CAD: The US dollar/Canadian dollar was still on the defensive before the European market, and the trading was dominated by shocks in the day, which is currently hovering around 1.2675. The combination of different factors failed to help the US dollar against the Canadian dollar profit from the strong rebound of more than 110 points last Friday, resulting in the suppression of price movements or narrow fluctuations on the first day of the new week. West Texas Intermediate (WTI) prices rebounded above US$70 per barrel, supporting the commodity-related Canadian dollar. However, the overall strength of the U.S. dollar provided some support for the U.S. dollar against the Canadian dollar and helped limit any meaningful decline.

- AUD: From a technical point of view, the recent decline of the Australian dollar against the US dollar since the highest level since mid-July stopped at the 38.2% Fibonacci retracement level of the substantial rise of 0.7106-0.7478, which coincides with the 200 SMA in the 4-hour chart due to economic data. Light, this bit should now constitute a critical pivot point. At the same time, the Japanese chart's technical indicators have stabilized in the positive zone but have been struggling to gain any meaningful traction. In addition, the 4-hour chart oscillator has not yet fully rebounded from the bearish zone, and bullish traders should remain cautious before betting on further gains. Therefore, any subsequent payments are more likely to face a strong resistance near the 0.7390 area where the 23.6% Fibonacci retracement level is located. The 0.7400 marks follow it. If it breaks decisively, it will pave the way for a breakthrough of 0.7450 and another test of the monthly highs near the 0.7478 area. On the other hand, the confluence support level of 0.7336 should continue to limit the immediate downside of the exchange rate. Some follow-up selling may drag the exchange rate down further to test below 0.7300 or the 50% Fibonacci retracement level. If it falls below the above support level, it will be a new trigger for bearish traders. After that, the Australian dollar against the US dollar may accelerate its decline to the support levels of 0.7250 and 0.7230-25, and eventually fall to the integer mark of 0.7200. The downtrend will further extend to the horizontal support level of 0.7170-65. If it falls below this level, the bears may be committed to retesting the annual low near the 0.7100 marks.

- OIL: Oil prices continued the good trend of the previous trading day, rising from the $67.50 area, and gained some follow-up traction on Monday, as demand is expected to rise. In addition, concerns about the slow recovery of supplies in the Gulf of Mexico after Hurricane Ida caused supply disruptions have provided additional support for crude oil. However, concerns about the rapidly spreading delta variant may limit its gains. On the other hand, the U.S. dollar is supported by market expectations that the Fed will begin to reduce its stimulus measures during the epidemic period soon rather than later. The U.S. Producer Price Index (PPI) released on Friday further exacerbated this speculation. The index set the most significant increase since November 2010, indicating that inflation may continue for some time. In turn, this may continue to drive the U.S. dollar.

 

• CHART OF THE DAY:

The pound against the US dollar rebounded more than 40 points from the 1.3800 downside zone and climbed to the top of its daily trading range around 1.3835 in the North American market. The risky impulse of the stock market and the mild correction of U.S. Treasury yields inhibited the dollar's intraday rise as a safe-haven currency, which had previously risen to a two-week high. This, in turn, is seen as a critical factor in supporting entry into the North American market. Even so, the expectation that the Fed will soon announce a reduction in debt purchases should continue to drive the dollar and restrict any meaningful upside into the North American market. This makes it prudent to wait for some follow-up buying before going up further. From a technical point of view, the recent rebound from the 1.3600 level is along an upward sloping channel. However, the bulls have been working hard to take advantage of this trend and have repeatedly failed to break through the 1.3900 marks, which should become a critical turning point for the pound against the dollar.• GBPUSD- D1, Resistance around ~ 1.40142, Support around ~ 1.36689.

 

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