US stocks started the week on a front foot ahead of key earnings reports from Netflix and Tesla. While most big tech shares continued to rise following the light CPI data last week, banking stocks rallied for the second straight trading day amid positive earnings. JPMorgan Chase’s shares rose 2.5% to the highest level since February 2022, buoying the Dow Jones Industrial Index up for the sixth consecutive trading day to a new year high.
At the same time, the US dollar paused declining but stayed at the recent low as the disappointing Chinese GDP growth slashed commodity currencies, such as the Australian dollar and the New Zealand dollar. The China-growth-sensitive commodities like copper and crude oil prices also declined sharply following the weak economic data.
Equity markets across Asia markets are set to open lower. The ASX 200 futures were down 0.26%, the Hang Seng Index futures fell 0.40%, and the Nikkei 225 futures slid 0.03%.
- 5 out of 11 sectors finished higher in the S&P 500, with Technology and Financials leading gains, up 1.33% and 1%, respectively. Utilities and Real Estate were the laggards, down 1.18% and 0.83%, respectively.
- Meta’s Threads is being investigated by US lawmakers on content censorship regarding political posts. Threads is flagged as it is seen as a rival of Twitter, which was involved in free speech issues earlier.
- Grain prices popped amid Russia’s withdrawal from a deal that allowed the export of Ukrainian grain across the Black Sea. Russia’s announcement reignited fears of supply shortage in Ukraine’s agricultural products like wheat, corn, and soybeans at a point before pulling back on Monday.
- China’s weak economic data pressed on Asian markets and commodities. China’s second-quarter GDP grew by 6.3% year on year, less than an estimated 7.15. The growth decelerated from last quarter as the country encountered deflationary issues due to weak consumer demand. The youth unemployment rate rose to a record high of 21%.
- The WTI futures retreated for the second straight trading day, finishing below key support of 75, following the disappointing Chinese economic data. The WTI crude price may continue the downside momentum and test further support of the 50-day moving average of 71.50 from a technical perspective.
ASX and NZX announcements/news:
- Turners (NZX,/ASX: TRA) has set the strike price for the Dividend Reinvestment Plan at NZ$3.45 per share. The dividend is to be paid on 28 July 2023.
- RBA Monetary Policy Meeting minutes
- US Retail Sales
Disclaimer: CMC Markets is an execution-only service provider. 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.