Asia Morning: U.S. Market Dragged by Record GDP Slump

U.S. GDP shrank at an annualized rate of 32.9% in the second quarter...

Trading floor 2

On Thursday, U.S. stocks closed mixed. The Dow Jones Industrial Average retreated 225 points (-0.85%) to 26313, the S&P 500 dropped 12 points (-0.38%) to 3246, while and the tech-heavy Nasdaq 100 advanced 52 points (+0.49%) to 10715.

S&P 500 Index: Daily Chart

Source: GAIN Capital, TradingView

U.S. official data showed that gross domestic product (GDP) shrank at an annualized rate of 32.9% in the second quarter, the most on record. Initial Jobless Claims rose to 1.434 million for the week ended July 25 (1.445 million expected, 1.422 million in the prior week). Both pieces of data helped in dampening market sentiment. 

Semiconductors & Semiconductor Equipment (+2.22%), Household & Personal Products (+1.69%) and Transportation (+1.14%) sectors performed the best, while the Energy (-4.1%), Automobiles & Components (-3.12%) and Banks (-2.55%) sectors were laggards. 

On the technical side, about 57.0% (54.6% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 80.8% (67.5% in the prior session) were trading above their 20-day moving average.

In after-market hours, Apple (AAPL), (AMZN), Alphabet (GOOGL) and Facebook (FB) saw their share prices rise after posting upbeat earnings results.

European stocks closed in the red. The Stoxx Europe 600 Index shed 2.16%, Germany's DAX 30 tumbled 3.45%, France's CAC 40 lost 2.13%, and the U.K.'s FTSE 100 fell 2.31%.

U.S. government bond prices remained buoyed, as the benchmark 10-year Treasury yield dropped to 0.540% from 0.578% Wednesday.

Spot gold price halted its nine-session rally retreating $13.00 to $1,956 an ounce. And spot silver price was down for a third day as shedding 3.3% to $23.50 an ounce.

U.S. WTI crude oil futures (September) fell 3.3% to $39.92 a barrel, the first close below $40.00 since July 9.

On the forex front, the U.S. dollar kept sliding with the ICE U.S. Dollar Index falling 0.3% to 92.96. Apart from the record shrinking GDP readings, President Donald Trump's tweet on delaying the November presidential election helped to beat down the greenback.

EUR/USD closed above 1.1800 for the first time since May 2018, as it climbed 0.5% to 1.1847. The Eurozone's jobless rate was reported at 7.8% for June (7.7% expected), up from 7.7% in May. The Eurozone's GDP for the second-quarter (a fall in annualized rate of -12.1% on quarter expected) and Consumer Prices for July (-0.5% on month expected) will be reported.

Official data showed that Germany's GDP fell at an annualized rate of 10.1% in the second quarter (-9.0% expected) and jobless rate was stable at 6.4% in July (6.5% expected). June Retail Sales will be reported today (-3.0% on month expected). 

GBP/USD shot above the key level of 1.3000 closing at 1.3095.

USD/JPY fell 0.2% to 104.72.

More from Commodities

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account