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Market Wrap: Stocks, Bonds, Commodities
On Tuesday, U.S. stocks pared early-session losses to close mixed. The Dow Jones Industrial Average rose 92 points (+0.28%) to 32,849, the S&P 500 added 4 points (+0.11%) to 3,821, while the Nasdaq 100 declined 12 points (-0.11%) to 11,072.
The U.S. 10-year Treasury yield jumped 10.5 basis points to 3.690% after the Bank of Japan surprised markets by allowing long-term government bond yields to rise.
Energy (+1.52%), insurance (+1.09%), and media (+0.83%) sectors were the top performers, while automobiles (-6.27%), transportation (-1.42%), and semiconductors (-0.73%) sectors lost the most.
Tesla (TSLA) slumped 8.05% after brokerages Evercore ISI and Mizuho cut their price targets on the stocks.
Wells Fargo (WFC) fell 2.01% after the bank agreed to a $3.7 billion settlement with authorities over mismanagement of automobile loans, mortgages and deposit accounts.
From a technical point of view, Walmart (WMT) crossed above its 50-day moving average.
Regarding U.S. economic data, the number of housing starts posted at an annualized rate of 1.427 million units (vs 1.40 million units expected).
European stocks closed mixed. The DAX 40 fell 0.42%, the CAC 40 dropped 0.35%, while the FTSE 100 edged up 0.13%.
U.S. WTI crude futures rose $0.6 to $75.96 a barrel.
Gold prices jumped $31 to $1,818 an ounce.
Market Wrap: Forex
As expected, the Bank of Japan kept its benchmark interest rate unchanged at a negative level of -0.10%. However, the central bank shocked markets with a tweak to its yield curve control, allowing 10-year government bond yield to move 50 basis points either side of its 0% target, wider than the previous 25 basis point band.
USD/JPY then plunged 521 pips (-3.81%) to 131.70, the lowest level since August.
The U.S. dollar index then fell to 103.99.
EUR/USD rose 17 pips to 1.0624. Germany's data showed that producer prices fell 3.9% on month (vs -2.0% expected) but rose 28.2% on year (vs +30.8% expected) in November.
GBP/USD added 28 pips to 1.2177.
AUD/USD declined 22 pips to 0.6678.
USD/CHF fell 20 pips to 0.9266, and the USD/CAD was down 40 pips to 1.3608.
Bitcoin rebounded over 2% to $16,850.
Morning Trading
In Asian trading hours, USD/JPY rebounded to 132.07 from a prior low near 130.56.
Meanwhile, EUR/USD eased to 1.0615 and GBP/USD fell to 1.2165.
Gold was steady at $1,816.
Bitcoin held gains at $16,827.
Expected Today
Germany's January GfK consumer confidence index is estimated at -36.0.
In the U.S., December Conference Board consumer confidence index is expected at 100.1, while third quarter current account deficit is estimated at 230 billion dollars. Also, existing home sales are anticipated at an annualized rate of 4.3 million units. | | |
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