Market Wrap: Stocks, Bonds, and Commodities - September 7, 2023

Market Wrap: Stocks, Bonds, Commodities

On Wednesday, U.S. stocks traded lower, as stronger-than-expected services sector data boosted expectations of interest rates remaining higher for longer. The Dow Jones Industrial Average fell 198 points (-0.57%) to 34,443, the S&P 500 dropped 31.35 points (-0.70%) to 4,465, and the Nasdaq 100 sank 136 points (-0.88%) to 15,371.

The U.S. Institute for Supply Management (ISM) services purchasing managers index jumped to 54.5 in August (vs 52.4 expected).

The U.S. 10-year Treasury yield advanced 3.4 basis points to 4.294%.

In sector performance, technology hardware & equipment (-2.93%), automobiles (-1.61%), and semiconductors (-1.54%) posted the most significant losses.

Notable stocks in focus:

• Apple (AAPL) fell 3.58% to $182.91 on reports that some Chinese government agencies prohibited their staff from using iPhones and foreign-branded devices.

• Nvidia (NVDA) dropped 3.06% to $470.61.

• Tesla (TSLA) slipped 1.78% to $251.92.

• Lockheed Martin (LMT) slid 4.77% to $423.94 as it lowered its delivery outlook for F-35 jets in 2023.

• WeWork (WE) declined 3.39% to $3.42. The provider of co-working spaces announced plans to renegotiate all leases and exit underperforming locations.

European stocks also closed lower. The DAX 40 fell 0.19%, the CAC 40 dropped 0.84%, and the FTSE 100 was down 0.16%.

In commodities, U.S. WTI crude futures advanced a further $0.90 to $87.55 a barrel, while gold prices sank $9 to $1,916 an ounce.

Market Wrap: Forex

The U.S. dollar remained firm against other major currencies, with the dollar index stepping up to 104.85.

In currency pairs:

• EUR/USD was little changed at 1.0724. The Eurozone's data showed that retail sales decreased 0.2% on month in July (vs -0.1% expected).

• Germany's factory orders shrank 11.7% on month in July, worse than a decline of 5.2% expected.

• USD/JPY dipped 7 pips to 147.65.

• AUD/USD was relatively flat at 0.6381. Australia's data showed that gross domestic product grew 2.1% on year in the second quarter (vs +1.5% expected).

• USD/CAD was stable at 1.3641. As expected, Canada's central bank kept its key interest rate unchanged at 5.00%.

• GBP/USD dropped 59 pips to 1.2505, while USD/CHF gained 20 pips to 0.8915.

Bitcoin still lacked momentum, as it eased further to $25,660.

Here's a summary of the intraday analysis for various currency pairs and Dow Jones (CME):

EUR/USD Intraday:

• Pivot: 1.0700

• Preference: Long positions above 1.0700 with targets at 1.0745 & 1.0760 in extension.

• Alternative scenario: Below 1.0700 look for further downside with 1.0685 & 1.0670 as targets.

• Comment: A support base at 1.0700 has formed and has allowed for a temporary stabilization.

• 

GBP/USD Intraday:

• Pivot: 1.2530

• Preference: Short positions below 1.2530 with targets at 1.2480 & 1.2450 in extension.

• Alternative scenario: Above 1.2530 look for further upside with 1.2560 & 1.2585 as targets.

• Comment: The RSI is mixed to bearish.

• 

USD/JPY Intraday:

• Pivot: 147.30

• Preference: Long positions above 147.30 with targets at 147.80 & 148.00 in extension.

• Alternative scenario: Below 147.30 look for further downside with 147.00 & 146.80 as targets.

• Comment: The RSI shows upside momentum.

• 

Dow Jones (CME) Intraday:

• Pivot: 34530.00

• Preference: Short positions below 34530.00 with targets at 34340.00 & 34200.00 in extension.

• Alternative scenario: Above 34530.00 look for further upside with 34650.00 & 34730.00 as targets.

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

• 

Please note that these are intraday trading recommendations and should be used with caution. Market conditions can change rapidly, and it's essential to consider your risk tolerance and perform a thorough analysis before making any trading decisions.