Major equity indexes in the US opened the day near Monday's closing levels on Tuesday as investors are waiting for negotiations on the next coronavirus relief bill to conclude. As of writing, the S&P 500 Index was down 0.05% on a daily basis at 3,292, the Dow Jones Industrial Average was losing 0.08% at 26,642 and the Nasdaq Composite was virtually unchanged on the day at 10,906.
According to the latest market chatter, despite a broad agreement on the extension of the Paycheck Protection Program (PPP), US lawmakers are still far apart on many aspects of the relief bill.
Among the 11 major S&P 500 sectors, the Financials Index is down 0.6% on Tuesday pressured by a 5.5% drop witnessed in the 10-year US Treasury bond yield. On the other hand, defensive sectors, Real Estate, Utilities and Consumer Discretionary, trade in the positive territory to start the day.
Gold has been edging higher but seems shy of staging a major breakout. The precious metal is pushed higher by the failure of American politicians to reach an agreement on extending federal unemployment benefits and other emergency programs. That implies a bigger package down the road – and more importantly for XAU/USD more monetary stimulus.
On the other hand, hopes for a coronavirus vaccine remain robust as Novavax and other companies are moving forward to provide immunization. Stocks, bonds, and precious metals are looking for a new direction.
How is gold positioned on the charts? Significant hurdles loom over XAU/USD, implying another attempt to push the precious metal to the upside seems futile. However, after extending the downward correction, gold may be ready for the next bullish move – as fundamentals continue pointing higher.
The Technical Confluences...
BEIRUT (Reuters) - Fifteen years after a truck bomb killed Lebanon’s former Sunni leader Rafik al-Hariri in Beirut, triggering regional upheaval, a U.N.-backed court trying four suspects from Shi’ite Hezbollah delivers a verdict on Friday that could shake the country again.
Citadel has been shopping and Goldman Sachs appears to be its chosen aisle. The hedge fund has added numerous managing directors (MDs) from Goldman Sachs.
One of the most recent joiners is Sven Khatri, a former managing director in Goldman's strats and treasury quantitative research team. Khatri has joined Citadel as a treasury quantitative researcher according to his Linkedin profile.
Ford Motor said that CEO Jim Hackett, who has led the company’s transformation since 2017, plans to retire from the company. Jim Farley has been named the company’s new president and CEO and will join the board of directors, effective Oct. 1.
EUR/USD is now receding for the third consecutive session on turnaround Tuesday, always on the back of the moderate pick-up in the sentiment for the buck while at. The same time extending the leg lower from the overbought territory.
Other than developments from the unremitting pandemic and the performance of fundamentals in the region, investors keep closely watching headlines from the US political scenario, where another stimulus package aimed at helping Americans counteract the impact of the coronavirus remains the centre of the debate between Republicans and Democrats.
Later in the US calendar, Factory Orders for the month of June will be in the limelight seconded by the IBD/TIPP index and the weekly report on US crude oil supplies by the API.
The generally received wisdom is that summer is a quiet month for trading. Traders are on holiday and markets quieten down. That’s the expectation among many. However, the reality is that August can be one of the most volatile trading months of the year. According to Bloomberg’s Market’s Live blog, the Cboe volatility index has risen an average of+11% in August over the past 15 years. So, August is time of volatility. Given the unusual nature of 2020, this could be a very volatile year!
Americans sharply reduced their mobility in late March and early April, staying at home to avoid COVID-19 infection. As mobility and economic activity resumed in the latter half of April and into May, the renewed movement didn’t appear to reflect local infection rates.
That pattern changed the following month. Across states, a strong relationship seems to have developed between local COVID-19 cases and mobility. Mobility has declined in states experiencing a rising rate of new cases, while mobility has increased in states that saw a relatively high incidence earlier in the pandemic but an easing in recent weeks.Economic activity has exhibited a similar response to COVID-19 outbreaks. Thus, the economic recovery going forward is likely to be geographically uneven, dictated by local infection conditions. A full recovery to pre-pandemic levels of economic activity appears unlikely until the virus is under control.
TOKYO (Reuters) - Japan Post Holdings Co Ltd (6178.T) has decided to sell its Australian logistics arm Toll Holdings Ltd, a media report said on Tuesday.
In 2015, Japan Post acquired Australia’s transport logistics firm Toll for A$6.5 billion ($4.64 billion), making an ambitious bet to diversify overseas. But two years after the deal, it had to write down the bulk of Toll’s value only two years after the deal due to its weak performance.
Japanese business magazine Diamond reported that Japan Post had started sounding out brokerage firms this week to find advisors for the sale of the troubled Australian firm, citing multiple unidentified sources.
Japan Post plans to pick two brokerages, one Japanese and one from overseas, by August, the magazine added.
A spokesman for Japan Post Holdings declined to comment on the media report.
TOKYO/SEOUL (Reuters) - Nippon Steel Corp (5401.T) said on Tuesday it will appeal a South Korean court ruling that allows for a seizure of its assets, as tensions between Tokyo and Seoul over the case threaten to flare up again.
A leading association of Turkish doctors said on Tuesday that nearly 1,000 people are being infected with the coronavirus every day in Ankara alone, questioning the accuracy of government figures which put the daily nationwide tally of new cases at around the same level.
Patients are able to get access to their doctors—even mental-health therapists—online, without driving to the office, paying for parking or sitting idly in the waiting room until the provider wraps up their previous appointment. But not everyone is benefiting. Those most in need might also be the least likely to be able to reap the benefits of telemedicine.
- failure to get a grip on the pandemic is putting the brakes on its rebound compared with Europe, where many former virus hot spots managed to resume economic activity without causing a similar surge in infections.
Shadow banking isn’t what it used to be. The Covid-19 crisis, far from tripping it up, could help complete its transformation.
Last week, investment giant Apollo Global Management announced the creation of a $12 billion platform that will make loans of around $1 billion. This is another early sign that “direct lending”—where funds take on the role of banks by extending loans directly to firms—is expanding beyond its middle-market niche toward funding big companies....
(Reuters) - The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, U.S. central bankers said on Monday.
The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.
“The ball is in Congress’ court,” Chicago Fed President Charles Evans told reporters on a call. “Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely.”
Without more government aid, Evans said, “aggregate demand trouble is brewing.” Translated for non-economists: people...
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