Asia Morning: U.S. Stocks Rebound as Fed Buys Corporate Bonds

,

On Monday, U.S. stocks pared early losses to close in positive territory, lifted by the Federal Reserve's announcement that it would start buying individual corporate bonds...

Trading floor 2

On Monday, U.S. stocks pared early losses to close in positive territory, lifted by the Federal Reserve's announcement that it would start buying individual corporate bonds. The Dow Jones Industrial Average slid 762 points at the open before working its way up to close at 25763, up 157 points or 0.6% on day. The S&P 500 rose 25 points (+0.8%) to 3066, and the Nasdaq 100 was up 113 points (+1.2%) to 9776.


Nasdaq 100 Index: Daily Chart

Source: GAIN Capital, TradingView


Consumer Durables & Apparel (+2.09%), Insurance (+1.8%) and Food, Beverage & Tobacco (+1.6%) sectors performed the best. ViacomCBS (VIAC +8.69%), Lennar Corp (LEN +7.17%) and ONEOK (OKE +6.89%) were top gainers.


On the technical side, about 39.3% (36.3% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 46.2% (32.5% in the prior session) were trading above their 20-day moving average. 

Regarding U.S. economic data, the Empire Manufacturing Index spiked to -0.2 in June (-29.6 expected) from -48.5 in May.

Due later today are May Retail Sales (+8.0% on month expected) and Industrial Production (+3.0% on month expected).

European stocks were broadly lower, with the Stoxx Europe 600 Index easing 0.3%. Germany's DAX declined 0.3%, France's CAC dropped 0.5%, and the U.K.'s FTSE 100 was down 0.7%.

U.S. government bond prices came under pressure after the Fed announced plans to widen its efforts to support corporate credit markets. The benchmark 10-year U.S. Treasury yield climbed to 0.701% from 0.698% Friday.

Spot gold fell $5.00 (-0.3%) to $1,724 an ounce.

U.S. WTI crude oil futures (July) gained 2.4% to $37.12 a barrel.

On the forex front, the ICE U.S. Dollar Index retreated 0.7% on day to 96.62, following a two-day rebound.

EUR/USD bounced 0.7% to 1.1328. Later today, German ZEW Current Situation Index for June will be released (-83.0 expected).

GBP/USD advanced 0.6% to 1.2620. U.K. Prime Minister Boris Johnson said he "sees no reason" why his country and the European Union can not reach an agreement by July. Meanwhile, investors will focus on the U.K. jobless rate for the three months to April due later in the day (4.7% expected).

USD/JPY was little changed at 107.40. The Bank of Japan is expected to keep its benchmark rate unchanged at -0.10% later today.

More from Indices

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.