Market Brief: DJIA Rallies for Seventh Straight Day, Longest Streak in Over a Year

Matt Weller
By :  ,  Head of Market Research

  • In its highly-anticipated monetary policy meeting, the ECB cut deposit rates by 10bps to -0.5%, reintroduced QE (with no end date!), and introduced a tiering system for banks – see our initial review of the decision. The central bank also cut growth and inflation forecasts.
  • FX: After an initial drop, the euro rallied back to become the strongest major currency on the day in a classic “sell the rumor, buy the news” dynamic around the ECB. The Japanese yen was the weakest major currency.
  • Optimism about a possible interim US-China trade deal to delay tariffs boosted risk appetite (though that rumor was subsequently denied by a White House spokesperson)
  • US data: August CPI came in softer than expected at 1.7% y/y vs. 1.8% eyed, while initial jobless claims met expectations at 204k.
  • Commodities: Gold ticked higher while Oil shed over 1% on the day.

  • US indices traded higher across the board, marking the seventh straight rally for the Dow Jones Industrial average. This is the longest winning streak since last May.
  • Financials (XLF) were the strongest sector while Energy (XLE) was the weakest, hurt by the drop in oil prices.
  • Stocks on the move:
    • Oracle (ORCL) gained 1% after co-CEO Mark Hurd announced he would take a leave of absence for health reasons.
    • Car rental firm Hertz Global Holdings (HTZ) gained 20% after billionaire investor Carl Icahn increased his stake in the company above 30%.
    • New IPO SmileDirectClub dropped -28% in its first day of trading.

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