Market Brief: A Terrible, Horrible, No Good, Very Bad Day on Wall Street
Matt Weller, CFA, CMT August 5, 2019 9:03 PM
- The combination of USD/CNH rising through 7.00 (a move President Trump dubbed “currency manipulation…a major violation”) and news that China’s government has stopped US agricultural purchases led to big risk-off moves across the globe as markets price in the risk of a worsening trade/currency war.
- FX: The euro and Swiss franc were the strongest major currencies, while the trade-correlated Aussie brought up the rear.
- EUR/CHF is at 2-year lows, prompting some traders to speculate on the potential for the SNB to intervene in the market and sell the Swiss franc.
- Beyond China-related developments, traders will also look forward to New Zealand jobs data and the RBA in today’s Asian session trade.
- Commodities: Gold rallied again today, hitting a six-year high above 1470, while oil dropped 1% despite ongoing tensions in the Middle East.
- US indices bore the brunt of the selling pressure, losing roughly 3% on the day.
- Utilities (XLU) were the strongest sector, but still dumped nearly 2%. Technology stocks (XLK) were the weakest, losing over 4% on the day.
- Stocks on the Move:
- Apple (AAPL, -6%) and Visa (V, -5%) were the biggest contributors to the Dow’s drop today.
- Tyson Foods (TSN) gained 5% to buck the weakness in broader markets after reporting strong earnings.
- Cars.com (CARS) dumped nearly 35% after reporting weak earnings, cutting guidance, and announcing there were no new bidders for the company.
Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by Forex.com 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 Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
For further details see our full non-independent research disclaimer and quarterly summary.