U.S. stock indexes retreated from their record-high levels. The Dow Jones Industrial Average dropped 274 points (-0.71%) to 38,380, the S&P 500 fell 15 points (-0.32%) to 4,942, the Nasdaq 100 was down 29 points (-0.17%) to 17,613.

DAILY MARKET NEWSLETTER

February 6, 2024

MARKET WRAP: STOCKS, BONDS, COMMODITIES:

On Monday, major U.S. stock indexes retreated from their record-high levels. The Dow Jones Industrial Average dropped 274 points (-0.71%) to 38,380, the S&P 500 fell 15 points (-0.32%) to 4,942, the Nasdaq 100 was down 29 points (-0.17%) to 17,613.

Treasury yields rallied amid growing expectations that the Federal Reserve may not cut interest rates very soon. The U.S. 10-year Treasury yield advanced a further 12.7 basis points to 4.158%.

Health care, technology, and energy stock sectors outperformed the market, while materials, utilities, and real estate sectors were under pressure.

• Nvidia (NVDA) gained 4.79% to $693.32, marking a third consecutive record close. Goldman Sachs raised its price target on the stock to $800.

• Tesla (TSLA) fell 3.65% to $181.06, the lowest close since May 2023.

• ON Semiconductor (ON) jumped 9.54% as fourth-quarter results exceeded market expectations.

• Estee Lauder (EL) surged 12.05% after the cosmetics company announced plans to cut up to 3,000 jobs or 5% of its workforce.

• Catalent (CTLT) climbed 9.74%. The drugmaker agreed to be acquired by Denmark's Novo Nordisk for $16.5 billion.

• McDonald's (MCD) traded 3.73% lower, as the fast-food chain's quarterly sales missed expectations.

Regarding U.S. economic data, the Institute for Supply Management (ISM) services purchasing managers index climbed to 53.4 in January (vs 51.7 expected).

European stocks dipped at close, with the DAX 40 down 0.08%, the CAC 40 down 0.03%, and the FTSE 100 down 0.04%.

U.S. WTI crude-oil futures rose $0.54 (+0.75%) to $72.82 a barrel.

Gold price declined $14 (-0.72%) to $2,025 an ounce.

MARKET WRAP: FOREX:

The U.S. dollar gained further strength against other major currencies, with the dollar index rising to 104.47.

• EUR/USD fell 45 pips to 1.0739. The Eurozone's producer prices fell 10.6% on year in December (vs -10.2% expected).

• Germany's exports dropped 4.6% on month in December (vs -2.0% expected).

• USD/JPY added 31 pips to 148.68. This morning, Japan's data showed that household spending declined 2.5% on year in December (as expected).

• GBP/USD dropped 99 pips to 1.2531.

• AUD/USD was down 29 pips to 0.6483. Later today, Australia's central bank is expected to keep its key interest rate unchanged at 4.35%.

• USD/CHF rose 42 pips to 0.8706, and USD/CAD climbed 80 pips to 1.3540.

Bitcoin continued to lack traction, as it traded lower to $42,300.

GBP/USD Intraday: key resistance at 1.2575:

• Pivot: 1.2575

• Our preference: Short positions below 1.2575 with targets at 1.2515 & 1.2500 in extension.

• Alternative scenario: Above 1.2575 look for further upside with 1.2600 & 1.2630 as targets.

• Comment: As long as the resistance at 1.2575 is not surpassed, the risk of the break below 1.2515 remains high.

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USD/JPY Intraday: bullish bias above 148.25:

• Pivot: 148.25

• Our preference: Long positions above 148.25 with targets at 149.00 & 149.30 in extension.

• Alternative scenario: Below 148.25 look for further downside with 148.00 & 147.70 as targets.

• Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

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EUR/USD Intraday: key resistance at 1.0765:

• Pivot: 1.0765

• Our preference: Short positions below 1.0765 with targets at 1.0720 & 1.0700 in extension.

• Alternative scenario: Above 1.0765 look for further upside with 1.0785 & 1.0805 as targets.

• Comment: The upward potential is likely to be limited by the resistance at 1.0765.

  

Dow Jones (CME)‎ (H4)‎ Intraday: the downside prevails:

• Pivot: 38600.00

• Our preference: Short positions below 38600.00 with targets at 38320.00 & 38210.00 in extension.

• Alternative scenario: Above 38600.00 look for further upside with 38690.00 & 38780.00 as targets.

• Comment: The RSI is below its neutrality area at 50%

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