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U.S stocks lower on Banking stocks – Trump’s comments to the FED; AUD trades in wild session – GBP sent packing after data miss; Gold hits new 2018 lows

Jul 20, 2018 | Market Updates

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The run came to end overnight, both U.S and European shares finishing lower. Bank shares and Presidents Trumps comments regarding the Fed led U.S. shares lower snapping a 5-day winning streak. The Dow Jones -134.79 pts. The S&P500 -11.13 pts. The Nasdaq -29.15 pts. Bank shares fell broadly. J.P. Morgan Chase, Citigroup, Bank of America and Morgan Stanley all declined by more than 1%.

Speaking exclusively with CNBC, Trump said he was not thrilled the Fed was raising rates. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time, I’m letting them do what they feel is best.”

“I think the market will ignore it because (Fed Chairman Jerome) Powell will ignore it,” said Maris Ogg, president at Tower Bridge Advisors. “He’s a real estate guy… he’s going to think rates going up are a bad thing no matter what.”

“Clearly for the next few weeks earnings are likely to become a major driving force of the market,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management.

In Europe, markets closed lower as investors digested corporate results and took profits. Basic resources were down 1.56%, the worst-performer. Metals, in particular, were in the firing line as worries about the Chinese economy continue. Media stocks also in the firing line, down 1.36%. This as French media conglomerate Publicis fell 8.99% after it reported an expected drop in second-quarter sales.

Trade relations remain in the spotlight with White House economic advisor Larry Kudlow suggesting that the European Union will be offering a significant deal on trade with the U.S. soon.

Dominic Raab, the new chief Brexit negotiator, is set to publish and spread technical advice for businesses and households in case there’s no agreement with the European Union, the Financial Times reported. Raab met with his opposite number Michel Barnier in Brussels today. Uk retail sale data came in well below market expectations at -0.5%. The FTSE added 7 pts as weaker CPI and retail sales data could be offsetting any future rates rises for now. The DAX fell 79.65 and the EUR STOXX ended the session 14.37 points lower.

Oil started Europe with decent selling, USOUSD fell to a session low of 66.47. Price recovered into NY closing slightly higher at 67.82. The recovery was led by news of falling stockpiles. U.S. crude strengthened on forecasts that inventories at the Cushing, Oklahoma oil delivery hub fell 1.8 million barrels in the week through Tuesday. Saudi Arabia’s OPEC governor said in a statement that the kingdom expects crude exports to drop by roughly 100,000 bpd in August. There will be OPEC-JMMC Meetings running all day.

Currencies, another yo-yo session with very strong selling into the European/London session and buying during NY. This time it wasn’t all just about the USD. The JPY also made good gains to risk currencies. The Poor Aussie, after flying higher during the Asian session after very positive employment data was taken to by sellers. The A/$ moved 119 pips from high to low. Settling 43 lower. The A/J 134 pips from high to low. Closing 76 pips lower.

The GBPUSD was hammered to 10-month lows after retail sales data came in well below expectations. Buyers returned into the U.S session, the AUD EUR and GBP closing off lows. The EURUSD closed higher after trading 63 pips into the red. The majors all closed lower to the Japanese Yen. This morning risk is trading mainly higher to the USD and JPY.

Gold was also hit hard into the LON open, falling to new 2018 lows hitting 1211! It did recover from its plunge closing 4.30 lower at 1222.71. Currenlty slightly lower in this mornings trade.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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