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US stocks fall – Bank of America drags financials; Oil tests lows bounces back above 69.50; USD hits back to risk

Oct 22, 2018 | Market Updates

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U.S shares fell in last night’s session. After positive leads coming into the session after Chinese stocks bounced back by over 4%. Buyers lost momentum as bank shares declined, Bank of America and Citigroup both fell more than 3%. J.P. Morgan Chase and Goldman Sachs closed 1.4% and 2.4% lower, respectively. Banks were targeted amid worries that higher mortgage rates would cap loan growth. The Dow Jones lost 126 pts – The S&P500 down 11.90 and the Nasdaq gained 19.60 after gains from Apple and Amazon.

“You need the market to calm down for investors to jump back in,” said Jeremy Klein, chief market strategist at FBN Securities. “Hopefully, earnings will help with that.”

European shares closed lower after Italy vowed to stick to the draft budget. the focus was mostly on corporate earnings with several big stocks announcing their latest results. Shares of Ryanair rose more than 4% despite reporting lower-than-expected profits. Trader continues to monitor Brexit developments.

Oil saw a volatile session, Saudi Arabia says it can raise output to 11 million barrels per day to offset the loss of Iranian exports. The Trump administration’s sanctions against Iran oil exports are due to start on November 4. U.S.-China trade war is denting the 2019 crude demand outlook. USOUSD tested 107 cents lower dipping back inside the $68 range before paring losses to close flat at 69.49.

Gold edged lower despite weaker equity markets, a stronger USD denting its appeal. Price closed 5.19 lower after testing 1229.40 earlier in the session. A USD fightback was a key point from last night. Risk held well to the USD during the Asian session. Things started to change the Lon session with the EUR and GBP falling first. The AUD started the week lower but fought back nicely and did its best to hold higher during the Lon session. Selling increased as the EUR and GBP continued to lose ground. The AUD gave up the fight in the U.S session finishing 33 lower, the EUR lost 52 and the GBP ended 106 pips lower.

The USD added 24 to the Yen while risk gave up gains to finish in the red. The GBPJPY dropped 94 pips. Bitcoin continues to tread water in what have been some of the most muted trade we’ve seen for a while.  The three trading days have been stuck in an 80 USD wide trading range.

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Sources; CNBC – All times are AEDT

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