Knight Investment Limited –US Markets & Economic Update – Dow Back on Track

U.S. stocks bounced back to close higher Tuesday, with the S&P 500 snapping its longest losing streak since March as the worst of the panic over Turkey's currency crisis abated, allowing investors to focus on a healthy domestic economy
 
HONG KONG - Aug. 14, 2018 - PRLog -- Dow Jones's Performance?
The Dow Jones Industrial Average DJIA, +0.45% rose 112.22 points, or 0.5%, to 25,299.92, supported by rallies in shares of Walgreens Boots Alliance Inc. WBA, +3.28% and McDonald's Corp. MCD, +1.56%

The S&P 500 index SPX, +0.64% climbed 18.03 points, or 0.6%, to 2,839.96, halting a four-day skid, and the Nasdaq Composite Index COMP, +0.65% gained 51.19 points, or 0.7%, to 7,870.89, after briefly slipping into negative territory early in the session.

On Monday, the Dow shed 0.5% to 25,187.70, the S&P 500 fell 0.4% to 2,821.93 and the Nasdaq finished down 0.3% to 7,819.71, dogged by worries of contagion fears from the Turkish lira USDTRY, +0.7617%
What happened? Why the markets moved.
Market participants focused on signs that Turkey is trying to stem a tumble in its currency that has slashed a third of its value over the past two weeks. On Monday, Turkey's central bank pledged to provide "all the liquidity" the country's financial institutions needed.

It is unclear if that will be enough to address many of the economic challenges that Ankara faces under President Recep Tayyip Erdogan, who has encroached on the independence of the central bank and crossed swords with President Donald Trump over the detention of American evangelical pastor Andrew Brunson. The central bank, meanwhile, has declined to lift interest rates during this crisis, as experts have recommended. Erdogan also has been an opponent of higher rates.

Still, the lira managed to rebound, with some market participants speculating that Turkey's crisis should remain contained to the country of about 80 million. The Turkish lira was up more than 5% against the U.S. dollar, with one dollar buying 6.356 lira, compared with 6.884 late Monday in New York.
What Economic Indicators were released?
The National Federation of Independent Business' small-business optimism index rose 0.7 points in July to 107.9. The NFIB said it was the second-highest level in history, just under the 1983 peak.

A reading of the cost of imported goods was flat in July, but the yearly rate of increase jumped to the highest level since February 2012, up an annualized 4.8%, the government said Tuesday. Excluding fuel, import prices dropped 0.3% last month and produced an annualized rise of 1.3%.

Household debt — including mortgages, credit cards, auto loans, student loans and other credit — grew for the 16th consecutive quarter in the April-to-June period, rising by 0.6%, or $82 billion, to $13.29 trillion, the New York Fed reported.
Major Stock News?
Shares for Tesla Inc. TSLA, -2.46% fell 2.5% after CEO Elon Musk late Monday said in a tweet that he was working with Goldman Sachs and private-equity firm Silver Lake on the electric-car maker's go-private plan. A separate report indicated that Tesla had formed a special committee to review take-private proposals but didn't indicate that any specific deal was on the table.

Shares of fashion retailer Tapestry Inc. TPR, +12.01% jumped 12% after the parent of Coach and Kate Spade reported fiscal fourth-quarter earnings and sales that rose above expectations and provided an upbeat outlook.

Wynn Resorts Ltd.'s stock WYNN, -2.79% slid 2.8%, among the biggest S&P 500 losers. The company's shares have been among the hardest hit during the Turkish lira worries.
Elsewhere?
European stocks were generally up, recovering from a blanket decline in the previous session, and Asian markets were also mostly higher.

Gold GCZ8, -0.13% settled moderately higher, while crude oil prices CLK9, -0.36%  were flat after an earlier rally and the U.S. dollar index DXY, +0.09%  rose 0.3%.

"There are several major geopolitical issues at the moment which have seen volatility in the markets not apparent for some time." said Jordan Richardson, Head of Market Research at Knight Investment Limited, "More than likely as we enter the "Ber" months it will settle down and we expect the remainder of the year to be very positive."

To find out more about Knight Investment Limited and the opportunities it sees in the markets, contact us at info@knight-investment.com or visit our website www.knight-investment.com to find out more about their services and products available.

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