Yesterday, the S&P 500 had recorded a gain of +1.1% which snapped a four-day losing streak alongside with the growth oriented Nasdaq 100 (+1.9%).

These gains were led by the mega-cap technology stocks as Amazon recorded a stellar gain of +5.7% after the stock was upgraded to outperform from market perform at Bernstein; Microsoft (+2.4%), Facebook (+2.7%), Google (+2.1%) and Apple (2.4%) had joined the bandwagon as well.

On the flipside, U.S. financial stocks continued to underperform where the S&P financial sector declined by -0.8%. Overall, market breadth was muted with the number of advancing and declining stocks almost on par for both NYSE and Nasdaq Composite.      

Over to U.S. earnings; Nike had managed to beat expectation for its first quarter (Q1) fiscal 2021 earnings result where earnings per share came in at US$0.47 versus consensus of US$0.46 and Q1 revenue held steady at US$10.66 billion that surpassed consensus of US$8.94 billion. In addition, digital sales rose 82% that helped to offset declines seen in its wholesale business. The share price of Nike had reacted positively in the after-trading hours where it added a gain of +13.1% to print a fresh all-time high of 132.15. It closed at 116.87 (+3.1%) in the normal U.S. trading session.

Tesla’s “Battery Day” event was rather lacklustre where CEO Elon Musk commented that some of the new innovations unveiled at the event were “close to working” and some three years away from fruition. Tesla’s share price took a further dive in the after-hours; dropped by -6.9% to 395.08 after it had ended the normal U.S. session at 424.23 (-5.6%). Technically, the medium-term uptrend of Tesla is still intact with its share price holding above the 386.00 key support.

3 Things To Look Forward

Singapore inflation data for August; core CPI has threaded lower in the past six months with deflationary forces intact. Consensus for core CPI is set at -0.4% year-over-year, a similar magnitude of -0.4% seen in July. If it comes in below expectation, the Singapore stock market may see further losses with the underperforming benchmark Straits Times Index that has broken below a key medium support at the 2470 level.

Germany preliminary manufacturing PMI for September; manufacturing activities in Eurozone had continued to recover since April 2020 with a robust reading of 52.2 recorded in August (revised down from a preliminary of 53.0), the fourth consecutive month of increases since May. Market participants will be using September’s preliminary data to gauge whether the recent surge in manufacturing activities are sustainable in the current “new normal ” environment.  Consensus is set at 52.5 for the September data.

UK preliminary manufacturing PMI for September; during the recent Bank of England (BoE) meeting, BoE Governor Bailey had signalled a more dovish approach on BoE’s monetary policy going forward. Hence, the GBP/USD may weaken further if PMI for September comes in below expectation. Consensus is set at 54.1 below a final reading of 55.2 see in July; after four months of consecutive increases since May 2020.

Chart of the day – Bearish break below 7-week range support for EUR/USD

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Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.