Market Update: Dow Jones Down, Euro Weakens, Copper Rises

The Dow Jones fell 174 points on Tuesday, with the S&P 500 slipping 0.3%. US banks faced downgrades from S&P Global Ratings due to economic challenges. The Nasdaq saw slight gains, boosted by Tesla and Apple. Nvidia’s stock initially soared but later dipped before its earnings report. Macy’s stock plummeted 14.2% due to fewer overseas tourists, and Dick’s Sporting Goods dropped 24.2% after revising profit forecasts. Lowe’s stock, however, rose 3.7% after exceeding expectations in its quarterly report.

Euro Weakening Ahead of Speeches

The euro weakened to $1.08, its lowest since June 14th, as investors await key speeches from ECB President Christine Lagarde and Federal Reserve Chief Jerome Powell at the Jackson Hole Symposium. Expectations suggest a 70% chance of the ECB raising its deposit rate to 4%, while US interest rates are expected to remain high due to inflation concerns.

Steady British Pound

The British pound stabilized around $1.27, nearing a one-month low set on August 10th. Investors turned to the US dollar ahead of the Jackson Hole Symposium for insights into global monetary policy. Strong recent data, including GDP and wages, point to an 80% likelihood of a 25 basis-point rate hike by the Bank of England in September.

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Copper Futures Surge

Copper futures surged past $3.75, rebounding from a two-month low on August 16th. This was driven by China’s efforts to support its economic recovery and rising demand. Beijing’s approval for 12 regions to issue 1.5 trillion yuan of special financing bonds will boost construction and infrastructure projects. Interest rate cuts by the People’s Bank of China and growing domestic demand are also contributing.

Steel Rebar Futures Reach Three-Week High

Steel rebar futures hit CNY 3,725 per tonne in late August, a three-week high. Renewed bets on Beijing’s economic support are driving demand for construction materials. Reports indicate a reintroduction of easing policy measures at the municipal level and permission for 12 provinces to issue CNY 1.5 trillion of special financing bonds. These actions respond to concerns about China’s economic slowdown and housing market pressures, leading to a significant reduction in production outlook for 2023.

Conclusion

Global markets remain dynamic, influenced by central bank speeches, economic indicators, and policy actions. Investors closely watch the US stock market, currency values, and commodities for opportunities in an ever-changing landscape.

Signals

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