Asia Morning: U.S. Stocks Get Sold
Ming Lam October 26, 2020 9:18 PM
Investors are deeply concerned with spiking new COVID-19 cases in the U.S. and Europe...
On Monday, U.S. stocks encountered a sell-off. The Dow Jones Industrial Average tumbled 650 points (-2.29%) to 27685, the S&P 500 shed 64 points (-1.86%) to 3401, and the Nasdaq 100 sank 188 points (-1.61%) to 11504.
S&P 500 Index (Daily Chart) : Caution
Sources: GAIN Capital, TradingView
Investors were deeply concerned with spiking new COVID-19 cases in the U.S. and Europe. Spain announced plans to introduce a curfew due to the reviving pandemic. Meanwhile, U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi failed again to agree on a fiscal stimulus deal.
Energy (-3.47%), Software & Services (-2.95%) and Consumer Services (-2.64%) sectors performed the worst. Energy stocks -- such as Apache (APA -7.76%), ConocoPhillips (COP -6.82%) and Devon Energy (DVN -5.88%) -- were top losers as oil prices slid over 3%.
Boeing (BA -3.9%), Caterpillar (CAT -3.20%) and American Express (AXP -4.04%) also fell.
Approximately 75% (74% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 68% (67% in the prior session) were trading above their 20-day moving average.
The VIX Index, Wall Street's fear gauge, jumped 4.91pts (+17.82%) to 32.46.
European stocks were also deeply in the red. The Stoxx Europe 600 Index dropped 1.81%, Germany's DAX 30 plunged 3.71%, France's CAC 40 lost 1.90% and the U.K.'s FTSE 100 was down 1.16%.
U.S. Treasury prices climbed further, as the benchmark 10-year Treasury yield declined to 0.799% from 0.840% Friday.
Spot gold edged down $0.5 to $1,901 an ounce.
Oil prices ended sharply lower, pressured by worries over lower oil demand due to the coronavirus pandemic and over excess oil supplies from Libya. U.S. WTI crude futures (December) dropped $1.29 (-3.24%) to $38.56 a barrel.
On the forex front, the U.S. dollar outperformed other major currencies, as investors turned to safe-haven assets amid a sell-off in stocks. The ICE Dollar Index gained 0.33% to 93.07.
EUR/USD dropped 0.46% to 1.1809. Germany's IFO Business Climate Index declined to 92.7 in October (93.0 expected).
GBP/USD declined 0.12% to 1.3025 posting a four-session losing streak.
USD/JPY stepped up to 104.83 from 104.73 in the prior session.
The Canadian dollar weakened against the greenback amid sliding oil prices. USD/CAD jumped 0.66% to 1.3212, back above its 20-day moving average.
AUD/USD retreated 0.24% to 0.7123, still below its 20-day moving average.
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 Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.