Spreads
Spreads
Spreads
Spreads
Spreads
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The Dow Jones Industrial Average saw a modest increase on Thursday, propelled by a surge in Disney’s stock following their post-earnings announcement of a price hike for ad-free Disney+ subscriptions. The market was also buoyed by a key inflation report that revealed slightly lower year-over-year inflation growth than economists had predicted. The blue-chip index gained 52.79 points, or 0.15%, closing at 35,176.15. While all three major indexes had initially climbed more than 1% earlier in the day, the Nasdaq Composite and S&P 500 are projected to conclude the week with slight declines of 1.2% and 0.2%, respectively, while the Dow is set for a 0.3% advance.
The inflation report for July showed an annual consumer price increase of 3.2%, slightly under the 3.3% consensus projected by economists polled by Dow Jones. Despite this moderate figure, the core July CPI reading, which excludes food and energy, marked a substantial increase of 4.7% on an annual basis, well above the Federal Reserve’s targeted 2% inflation rate. Additionally, Disney’s positive earnings announcement drove a 4.9% surge in their stock, making them the top performer in the Dow. Other positive contributors included Wynn Resorts, which advanced 2.6% due to better-than-expected earnings. As earnings season continued, more than 90% of S&P 500 companies had reported their quarterly earnings, with around 80% surpassing Wall Street expectations, according to FactSet data.
Data by Bloomberg
On Thursday, the overall market saw a slight uptick of 0.03%. Among the sectors, Communication Services led the gains with a notable increase of 0.43%, followed by Consumer Discretionary at 0.28%, and Materials at 0.09%. Energy, Financials, and Information Technology all saw minor gains of 0.08% and 0.01%, respectively.
However, Health Care experienced a slight decline of -0.04%, while Consumer Staples, Industrials, Real Estate, and Utilities encountered more notable drops, with decreases of -0.20%, -0.28%, -0.31%, and -0.32% respectively.
Major Pair Movement
During the NorAm session, the dollar index initially weakened due to a near-forecast U.S. CPI reading causing a brief drop in Treasury yields, almost touching last Friday’s lows. However, the dollar swiftly rebounded, erasing its losses along with rising Treasury yields. The expected and confirmed 0.2% monthly rise in both all-items and core CPI led to an initial decline in Treasury yields and a temporary weakening of the dollar against the euro and other currencies supported by risk-on sentiment. But the dollar regained strength, propelled by hawkish comments from San Francisco Federal Reserve Bank President Mary Daly and driven by a de-risking event after Treasury yields surged post a lackluster 30-year Treasury auction. This shift favored the dollar, causing EUR/USD to lose its earlier gains, while USD/JPY bounced back from intraday lows toward 2023’s highs.
Meanwhile, sterling’s early gains turned into a 0.3% loss as risk sentiment waned, compounded by concerns about the BoE’s potential economic slowdown following its final rate hikes. EUR/JPY approached a 15-year high due to the BoJ’s unchanged policy rate and steady cap on 10-year JGB yields, which was unaffected by a post-BoJ meeting peak. Amid ongoing worries about China’s hesitant economic recovery and trade conflicts, the Australian dollar shed its earlier gains, and the Chinese yuan (CNH) fell 0.2%.
Economic Data
| Currency | Data | Time (GMT + 8) | Forecast |
|---|---|---|---|
| GBP | Gross Domestic Product m/m | 14:00 | 0.2% |
| USD | Producer Price Index m/m | 20:30 | 0.2% |
| USD | Core Producer Price Index m/m | 20:30 | 0.2% |
| USD | Prelim UoM Consumer Sentiment | 22:00 | 71.4 |
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