Upward Momentum May Lead To Continued Strength On Wall Street

[ADVFN]( [WorldDaily Markets Bulletin]( [Daily world financial news]( [Friday, 28 August 2020 12:09:29]( [Monitor]( [Quote]( [Charts]( [News]( [Toplists]( [Boards]( --------------------------------------------------------------- US Market Bitcoin [Bitcoin]( DAX [DAX]( Dow Jones [Dow Jones]( Nasdaq [Nasdaq]( The major U.S. index futures are currently pointing to a higher open on Friday following the mixed performance seen in the previous session. The markets may continue to benefit from recent upward momentum on Wall Street, which has helped the major averages show a substantial rebound off their March lows. The Nasdaq and the S&P 500 have more than offset the sell-off seen in late February and early March, soaring to new record highs. The Dow has underperformed its counterparts but is also closing in on the record high set in February. The blue chip index is poised to turn positive for 2020 after briefly moving above the unchanged line for the year on Thursday. Buying interest may also be generated as traders continue to digest Federal Reserve Chair Jerome Powell?s announcement of the central bank?s adoption of ?average inflation targeting.? Powell?s comments were seen as an indication the Fed will leave interest rates at near-zero levels for the foreseeable future even if there is an acceleration in the pace of inflation. Adding to the positive sentiment, the Commerce Department released a report showing an unexpected increase in personal income in July. Stocks fluctuated over the course of the trading session on Thursday but largely maintained a positive bias. The S&P 500 reached a new record closing high and the Dow ended the day at its best closing level in over six months, although the tech-heavy Nasdaq eventually ended the day in the red. The Dow climbed 160.35 points or 0.6 percent to 28,492.27 and the S&P 500 rose 5.82 points or 0.2 percent to 3,484.55. Meanwhile, the Nasdaq, which has recently outperformed its counterparts, fell 39.72 points or 0.3 percent to 11,625.34. The mixed close by the major averages came after Powell announced a widely expected shift with regard to the price-stability side of the central bank's dual mandate. Powell revealed in a live-streamed speech to the Jackson Hole economic symposium that the Fed will change its approach to a "flexible form of average inflation targeting." The Fed chief stressed that the longer-run goal continues to be an inflation rate of 2 percent but noted inflation will average less than that if it runs below 2 percent following economic downturns and never moves above that level even when the economy is strong. "Households and businesses will come to expect this result, meaning that inflation expectations would tend to move below our inflation goal and pull realized inflation down," Powell said. He added, "To prevent this outcome and the adverse dynamics that could ensue, our new statement indicates that we will seek to achieve inflation that averages 2 percent over time." Powell said appropriate monetary policy will therefore likely aim to achieve inflation moderately above 2 percent following periods when inflation has been running below that level. Paul Ashworth, Chief U.S. Economist at Capital Economics, expects the Fed's adoption of average inflation targeting to "trigger additional policy stimulus in the form of stronger forward guidance and possibly additional asset purchases too." "But, with long-term interest rates already so low and the Fed still ruling out negative rates as undesirable, we don't expect that additional stimulus to provide any significant boost to the real economy," Ashworth said. On the U.S. economic front, the Labor Department released a report showing a pullback in first-time claims for U.S. unemployment benefits in the week ended August 22nd. The report said initial jobless claims dropped to 1.006 million, a decrease of 98,000 from the previous week's revised level of 1.104 million. Economists had expected jobless claims to decline to 1.000 million from the 1.106 million originally reported for the previous week. A separate report from the Commerce Department showed U.S. economic activity contracted slightly less than initially estimated in the second quarter, although the report still showed a sharp drop in gross domestic product. Meanwhile, a report from the National Association of Realtors showed a much bigger than expected jump in pending home sales in the month of July. NAR said its pending home sales index spiked by 5.9 percent to 122.1 in July after soaring by 15.8 percent to 115.3 in June. Economists had expected pending home sales to surge up by 3.0 percent. Pending home sales increased for the third straight month after plummeting in March and April and are now up by 15.5 percent compared to the same month a year ago. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. Airline stocks turned in some of the market's best performances on the day, resulting in a 3.9 percent spike by the NYSE Arca Airline Index. With the jump, the index ended the session at its best closing level in over two months. Substantial strength was also visible among banking stocks, as reflected by the 2.4 percent surge by the KBW Bank Index. Interest rate-sensitive commercial real estate stocks also saw considerable strength, moving notably higher along with natural gas and brokerage stocks. On the other hand, gold stocks showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.3 percent. The weakness among gold stocks came amid a steep drop by the price of the precious metal. Semiconductor and networking stocks also saw notable weakness on the day, contributing to the drop by the tech-heavy Nasdaq. --------------------------------------------------------------- [Man Who Predicted 2020 Gold Rally Issues New Call]( Gold expert explains why massive shift happening right now in the financial markets could create biggest opportunity in last 100 years. [Click here to know more.]( --------------------------------------------------------------- U.S. Economic Reports CADUSD [CADUSD]( Oil [Oil]( Gold [Gold]( EURUSD [EURUSD]( With employees returning to work as the economy continued to reopen, the Commerce Department released a report on Friday showing U.S. personal income unexpectedly increased in the month of July. The Commerce Department said personal income rose by 0.4 percent in July after slumping by 1.0 percent in June. The rebound surprised economists, who had expected income to dip by another 0.2 percent. The report also showed a continued surge in personal spending, which jumped by 1.9 percent in July after spiking by 6.2 percent in June. Economists had expected spending to increase by 1.5 percent. At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of August. The Chicago business barometer is expected to inch up to 52.0 in August from 51.9 in July, with a reading above 50 indicating growth. The University of Michigan is due to release its revised reading on consumer sentiment in the month of August at 10 am ET. The consumer sentiment index for August is expected to be unrevised from the preliminary reading of 72.8, which was up slightly from 72.5 in July. --------------------------------------------------------------- --------------------------------------------------------------- Stocks in Focus Shares of Ulta Beauty (ULTA) are moving sharply higher in pre-market trading after the cosmetics retailer reported better than expected second quarter earnings. Athletic apparel retailer Hibbett Sports (HIBB) is also likely to see initial strength after reporting second quarter results that beat analyst estimates on both the top and bottom lines. Shares of Workday (WDAY) are also seeing significant pre-market strength after the cloud software company reported better than expected second quarter results and raised its full-year revenue guidance. Meanwhile, DraftKings (DKNG) and Penn National Gaming (PENN) may move to the downside after Morgan Stanley downgraded both gaming stocks to Equal Weight from Overweight. --------------------------------------------------------------- --------------------------------------------------------------- Europe European stocks are mixed in cautious trading on Friday as weak economic data as well as surging coronavirus cases in countries like Spain, France and Italy rekindled anxiety about the outlook for world growth. A survey showed that German consumer confidence is set to weaken in September following three months of improvement as income expectations deteriorated. Market researcher GfK said its forward-looking consumer confidence index for September dropped to -1.8 from -0.2 in August, which was revised from -0.3. Economists had expected a positive reading of 1.2. French household consumption rose 0.5 percent in July from the previous month, slowing from a surge of 10.3 percent in June, the INSEE stats agency said in a second release. French GDP sank 13.8 percent in the second quarter after contracting 5.9 percent in the previous three months, the INSEE said, confirming an initial reading. New data revealed British business confidence improved for the third consecutive month but remained far below the long-term historical average. Overall business confidence was up eight percentage points to -14 percent, according to the Lloyds Bank Business Barometer. On the positive side, a Eurozone economic sentiment indicator rose to 87.7 in August from 82.4 in July, confirming the gradual rebound from May. While the French CAC 40 Index is just below the unchanged line, the U.K.?s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.2 percent. Technology and healthcare stocks have paced the declines, while banks are moving higher, tracking a rise in Treasury yields after the U.S. Federal Reserve unveiled its new policy framework. Norwegian Air has moved sharply lower after the budget carrier warned it needed another rescue package to meet its financial obligations next year. Greggs has also moved to the downside after the company confirmed an outbreak of coronavirus at its bakery distribution centre in Leeds. Shares of Tandem Group have also declined, giving up early gains. The developer and retailer of sports, leisure and mobility equipment said it expects higher first-half results due to strong demand for bicycles and outdoor products. --------------------------------------------------------------- --------------------------------------------------------------- Asia USDCAD [USDCAD]( USDEUR [USDEUR]( USDGBP [USDGBP]( USDJPY [USDJPY]( Asian stocks ended mixed on Friday as concerns about the Japanese Prime Minister?s chronic health issues as well as political deadlock in the U.S. over federal stimulus spending offset the U.S. Federal Reserve's dovish gesture to achieve inflation averaging 2 percent over time. U.S. House Speaker Nancy Pelosi said that Democrats and Republicans continue to have differences over how much to spend on the next coronavirus relief legislation. Chinese stocks rose sharply on hopes of an economic recovery and optimism surrounding a surge in new start-up listings. The benchmark Shanghai Composite index rallied 53.69 points, or 1.6 percent, to 3,403.81, while Hong Kong's Hang Seng Index gained 0.6 percent to end at 25,422.06. Meanwhile, Japanese shares tumbled after reports suggested Prime Minister Shizo Abe intends to resign due to health reasons. The Nikkei 225 Index tumbled 326.21 points, or 1.4 percent, to 22,882.65, while the broader Topix closed 0.7 percent lower at 1,604.87. Exporters finished broadly lower as the yen rallied on concerns about political uncertainty. Financials gained ground after 10-year U.S. bond yields hit a 3-1/2-month high in reaction to the Fed's new monetary policy strategy. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial, T&D Holdings and Dai-ichi Life Holdings climbed 2-4 percent. Australian markets fell sharply as nine areas in the state of Victoria reported an increase in coronavirus cases and a former Fed official said there's still a possibility that the U.S. economy will experience a "double dip." The benchmark S&P/ASX 200 Index dropped 52.40 points, or 0.9 percent, to 6,073.80, while the broader All Ordinaries Index ended down 49.80 points, or 0.8 percent, at 6,260.80. Mining heavyweights BHP and Rio Tinto fell around 2 percent. Newcrest Mining and Evolution Mining fell over 2 percent after bullion prices slumped overnight on the Fed's new inflation shift. Regis Resources shares slumped 4.6 percent. Tech stocks followed their U.S. peers lower. Afterpay lost 2.8 percent and Appen nosedived 10.4 percent. Financials bucked the weak trend, with banks ANZ, NAB and Westpac rising between 0.4 percent and 0.9 percent. Electronics retailer Harvey Norman Holdings declined 1.6 percent despite the company reporting record full-year earnings. Seoul stocks finished higher as authorities stopped short of shifting the country up to the highest level of social distancing measures but instead extended the current Phase 2. The benchmark Kospi rose 9.35 points, or 0.4 percent, to 2,353.80 as the finance minister said the government will consider drafting its fourth supplementary budget of this year should the economic fallout from the pandemic significantly worsen. --------------------------------------------------------------- --------------------------------------------------------------- Commodities Crude oil futures are edging down $0.06 to $42.98 a barrel after falling $0.35 to $43.04 a barrel on Thursday. Meanwhile, after tumbling $19.90 to $1,932.60 an ounce in the previous session, gold futures are spiking $31.40 to $1,964 an ounce. On the currency front, the U.S. dollar is trading at 105.39 yen versus the 106.57 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1900 compared to yesterday?s $1.1822. --------------------------------------------------------------- To unsubscribe from this news bulletin or edit your mailing list settings click [here](. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +1 888-992-3836. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49