A Chinese observer looking at the recent updates in the stock market
Image courtesy of Reuters
GMA Network has released a report from Reuters about the latest reports on the global for this week.
Asian shares dithered on Monday as gold and oil now cost less, and the dollar bested the euro in four months after an update on jobs in the United States lifted yields on bonds.
A break of USD 1,750 forced stop-loss sellers to buy gold as low as USD 1,684 per ounce, being down by 1.4 per cent at USD 1,738 previously.
Brent slumped by 2 per cent due to concerns over the negative effects of the Delta variant on the demand for travel.
Trading is weak in Tokyo and Singapore despite holidays, plunging the broadest index by MSCI of Asia-Pacific shares outside Japan by 0.5 per cent.
Futures were trading 100 points below the close on Friday for Nikkei of Japan despite a shut while slipping by 0.4 per cent for Nasdaq and 0.3 per cent for S&P 500.
China prepares more data over the undershot forecasts for the weekend, while figures out on Monday showed a slow inflation by 1 per cent in July, easing more stimulus on policy further.
The Chinese index for blue chips was firmer by a fraction.
The House of Representatives of the United States is yet to pass the package for infrastructure worth USD 1 trillion planned by the Senate.
Investors had been assessing if the update on payrolls in the United States on Friday would push the Federal Reserve a bit to backtracking its stimulus.
Rodrigo Catril, a senior strategist for financial exchange at National Australia Bank, said, “There is not a lot of disagreement on a taper announcement coming sometime between September-December followed by actual tapering sometime between November and January,” but he admitted uncertainty about the tapering pace and would decide when an actual hike of rates came.
The Fed has been buying assets worth USD 120 billion per month, so a taper worth USD 20 billion would end the program in six months versus a year using USD 10 billion, with the rise of the Delta variant in more than 66,000 people hospitalized last winter making the case for the long taper.
Observers expect figures for the consumer price index in July due this week to confirm the peak of inflation, with used vehicles costing less again after huge gains.
Four officials from the Fed will speak on tapering this week.
High earnings in the United States have buttressed stocks temporarily. Analysts from the Bank of America noted that companies from S&P 500 were tracking a beat of 15 per cent on earnings during the second quarter with 90 per cent having reported, writing, “However, companies with earnings beats have seen muted reactions on their stock price the day following earnings releases, and misses have been penalized… Guidance is stronger than average but consensus estimates for two-year growth suggest a slowdown amid macro concerns”.
Financial institutions stood still on Friday as observers see a steeper curve of yield that benefits from earnings in banks, while also punishing towering valuations in the tech sector.
Having slumped at 1.177 per cent last week since February, yields on notes for 10 years in the United States rose by 1.30 per cent close on the report on jobs, helping the dollar climb to JPY 11o.22 from 108.71 clast week and revert the euro to USD 1.1754, and briefly to its lowest since April at USD 1.1740, and adding its index of currency to 92.882 and closer to 93.194 in July.
Prices of oil dropped significantly in four months as producers worry that restrictions on travel over COVID-19 would decrease for demand. The price of crude oil per barrel dropped from USD 1.44 to USD 69.26 for Brent and from USD 1.38 to USD 66.90 for the United States.