Archives of “August 2020” month

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Trump says his attitude towards China is not friendly

  
Analysis, Politics

Trump campaign comments from the White House

  • says China is giving US farmers large orders
  • any deal on TikTok will have to be substantially beneficial to the US, the US needs total security
more to come
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Has also been commenting on masks – the usual, ie he is anti mask etc. Which is a shame, the continued spread of the virus would be combatted to a good extent by mask wearing, not doing so is prolonging the health and economic costs borne by people in the US.
Trump at the White House
trump

No new record highs. The NASDAQ and S&P back off from all time highs

  
Analysis, US Market

Dow lagged all day

The S&P and NASDAQ both make bonds at all time highs (and all time high closes) but gave up just ahead of the levels and are closing mixed. The the NASDAQ was the only index to hold onto gains today. The Dow industrial average lagged the broader indices all day.  The NASDAQ is well off its highs but still close higher on the day for the 2nd consecutive day. The S&P and Dow close lower for the 2nd day in 3 days.
The final numbers are showing:
  • S&P index down -6.92 points or -0.20% at 3373.43. The  high price reached 3387.24 that was just off the all-time high of 3393.52. The S&P index is up 4.42% on the year
  • NASDAQ index closed up 30.265 points or 0.27% at 11042.50. It’s high price reached 11124.85. It’s a low extended to 11007.50.  The all-time high price from last week comes in at 11126.04. The NASDAQ index is up 23.07% on the year
  • Dow industrial average closed down -80.12 points or -0.29% at 27896.73. It’s high price reached 27986.10. It’s low price extended to 27789.78. The Dow remains -2.25% below the year-end the level
Some winners today included:
  • Zoom, +4.44%
  • Tesla, +4.16%
  • First solar, +3.06%
  • Square, +2.98%
  • Chipotle, +2.95%
  • Chewy, +2.78%
  • Papa John’s, +2.58%
  • Beyond Meat, +2.54%
  • Apple, +1.76%
  • Slack, +1.4%
  • Nike, +1.23%
Big losers today included
  • Cisco, -11.2% (guidance disappointed the market)
  • Micron, -4.83%
  • Tencent, -4.12%
  • Exxon Mobil, -2.43%
  • Schlumberger, -2.36%
  • Qualcomm, -1.99%
  • Walgreens Boots -1.96%
  • Goldman Sachs, -1.81%
  • United Airlines, -1.68%
  • Bank of America -1.44%
  • Caterpillar -1.36%
  • IBM -1.36%
  • Intel -1.28%

 

US treasury to auction off $25 billion of 20 year bonds next week

  
  Analysis
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Expectations were for a $23 billion auction

As the treasury auctions continue at an increasing pace, the US treasury has a announced that they will auction off $25 billion of 20 year bonds next week. That was higher than the 23 billion expected.

Later today the treasury will complete their refunding for the week with the sale of $26 billion of 30 year bonds. The auction will take place at 1 PM ET.  The current WI yield is trading at 1.375%

Dollar reverses its course

  
  Analysis
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Seeing some dollar buying all of the sudden

The dollar has reversed back higher in the last 30 minutes of trading.
Seeing some dollar buying all of the sudden
The EURUSD is back down testing the trend line on the 5 minute chart. The 100 bar MA on the same chart has been broken, but the trend line continues to hold the support.
GBPUSD
The GBPUSD has moved down to test its 100 bar MA on the 5 minute at 1.30904 but is finding some support as well. It will take a move below to swing more of the bias back to the downside.

US weekly initial jobless claims 963K vs 1100K expected

  
  Analysis
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Claims fall below 1 million

weekly initial jobless claims
  • Prior was 1186K (revised to 1191K)
  • Continuing claims 15486K vs 15800K expected
  • Prior continuing claims 16090K
  • PUA claims 489K vs 656K prior
  • Full report
The total number of people claiming benefits for all programs was 28,257,995, down 3065K from the prior week.
This was the first time initial jobless claims were below 1 million in 21 weeks.

Trump: Dollar will be even stronger if I am reelected

  
  Analysis

Further comments by Trump

Further comments by Trump

  • Says he made the US dollar strong and the dollar will be stronger in his second-term
It is funny how he has come around on the dollar policy after having complained about the Fed and the ‘strong’ dollar up until May this year. But as we look towards the election phase, it is all about public opinion and boasting, if you will.
This is another case in point and he surely knows that given the circumstances at the Fed, it is hard to justify a stronger dollar so long as markets are keeping calmer as well.

IEA cuts oil demand forecasts as over gloomy outlook on global travel

  
Analysis, Crude

IEA cuts its forecast for global oil demand as air travel suffers more than expected from the ongoing virus crisis

Oil
  • 2020 global oil demand cut from 92.1 mil bpd to 91.9 mil bpd
  • 2021 global oil demand cut from 97.4 mil bpd to 97.1 mil bpd
  • Says global oil supply to fall by 7.1 mil bpd in 2020
  • Says global oil supply to rise by 1.6 mil bpd in 2021
The agency reduces oil demand estimates for almost every quarter through the end of 2021, with 2H 2020 seeing the steepest downgrades.
Adding that this is due to air travel suffering, being two-thirds lower than last year in July – a peak month due to the summer holiday, according to the agency’s estimates.

The outlook for jet fuel demand has worsened in recent weeks as the coronavirus has spread more widely. It remains unclear if the new coronavirus cases herald a second wave or are simply a regular fluctuation…

Demand uncertainty, possibility of higher output renders market re-balancing delicate.

That said, they do note that the compensation for earlier OPEC+ over-production could help to keep world supply steady this month.
But the key takeaway for oil in the bigger picture is that as long as the world doesn’t get back to normal any time soon, it increases the risks of the market staying oversupplied.
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