News & Analysis

Nasdaq +1.24% after Apple hits 1Trillion Market cap; Oil rebounds on supply worries; Fight to safe havens sends risk sharply lower – Gold new 2018 lows

Aug 3, 2018 | Market Updates

Upcoming high impact news:

11:30 AUD Retail sales
18:30 GBP Services PMI
22:30 CAD Trade Balance
22:30 U.S. Employment data; Average Hourly EarningsNon-Farm Employment ChangeUnemployment Rate
00:00 USD ISM Non-Manufacturing PMI

U.S Markets mainly finished in the black. The Nasdaq jumping by 1.2%, adding 95.40 pts. The S&P500 closed 13.86 pts higher and the Dow Jones just about recovered from a 200 point loss to close 7.66 points lower.

Apple share rose 2.9% to $207.39, bringing its market cap above 1 trillion. Apple’s stock has been on the up since the company reported stronger than forecast quarterly results on Tuesday pushing the stock close to 9% higher.

It wasn’t all blue skies, stocks were sharply lower in the Asian and London session off the back of trade war fears. The U.S. administration announced on Wednesday that President Donald Trump asked U.S. Trade Representative Robert Lighthizer to consider increasing the proposed levies on $200 billion worth of Chinese goods up to 25%, from 10%.

China’s Ministry of Commerce responded to the U.S. announcement saying: “China is fully prepared and will have to retaliate to defend the nation’s dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries.”

European share traded sharply lower due to trade worries, the DAX fell 190.72 pts – the FTSE lost 76.98 and the Euro Stoxx 50 lost 40.76 points. The Bank of England raised interest rates, despite uncertainty over what Brexit means for the U.K. economy. Basic resources dropped 2.96% and auto stocks fell 1.02% on the back of trade concerns.

Kaz Minerals led the losses Thursday, plunging 28.3% after it said it had agreed to buy the Baimskaya copper project in the Chukotka region of Russia for $900 million.

Oil bounced back after trading sharply lower. Price gained 1.9% after Crude inventories at Cushing dropped 1.1 million barrels since Friday, July 27, traders said, citing a report issued by energy information provider Genscape. USOUSD after hitting a low of 66.29 closed at 68.22.

Gold closed at 1-year lows hitting 1207. A raging USD cut into gold’s fightback and once it slipped red sellers took hold. The USD and JPY really picked up to risk yesterday with hammer gains across the boards. Fear of a trade war driving buyers back into the two safe haven currencies. By the mid-London session, risk majors were all sharply lower. The GBP cut back the loses post rate raise but it was short-lived sellers resuming, sending the GBPUSD 109 lower; GBPJPY -133 pips lower. The EUR dropped 74 to the USD and 86 to the JPY.

After a quite a volatile week, we end with the Non-farm payrolls tonight at 22:30 AEST. Traders are looking for an increase in Average earnings (0.3%), a fall in unemployment (3.9%) and 190K in the employment change.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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