Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% Upgrade now

U.S. Opening Bell: USD Rallies On Turkish Turmoil; Oil Tracks Lower

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewAug 15, 2018 11:30
uk.investing.com/analysis/opening-bell-usd-rallies-on-turkish-turmoil-oil-tracks-lower-200203086
U.S. Opening Bell: USD Rallies On Turkish Turmoil; Oil Tracks Lower
By Investing.com (Pinchas Cohen/Investing.com)   |  Aug 15, 2018 11:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
XLE
+5.65%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NQZ2
+0.85%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSLA
-8.61%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
XLB
+3.25%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
+2.27%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GB10Y...
+0.99%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • Global stocks, US futures resume selling on renewed Turkish contagion fears

  • USD, Treasurys benefit from investors' flight to safety

  • Oil slides on surprise US inventories buildup

Key Events

European shares and futures on the S&P 500, Dow and NASDAQ 100 suffered the same downward pressure that battered most Asian equities on Wednesday, as the Turkish meltdown continued to test investor nerves.

The pan-European STOXX 600 slid into negative territory by late morning session, after gains in travel and media firms had helped it crawl higher. The index was weighed on by mining stocks, which were in turn dragged lower by copper’s fall to the lowest level in over a year, as commodity markets took a beating from the spillover of Turkish risk.

Earlier, during Asian trade, China’s Shanghai Composite tumbled 2.08 percent, underperforming its regional peers. Hong Kong’s Hang Seng dropped 1.55 percent while Japan’s Nikkei 225 slipped 0.68 percent. Conversely, South Korea’s KOSPI and Australia’s S&P/ASX 200’s both gained 0.47.

Global Financial Affairs

In yesterday's North American session, US equities managed to put the breaks on their longest slide since March. Tapestry (NYSE:TPR), the handbag maker formerly known as Coach, was the top performer of the S&P 500 after its quarterly results showed that shoppers are returning to its Kate Spade brand.

On the other side of the spectrum, Tesla (NASDAQ:TSLA) lost 2.5 percent as reports that Goldman Sachs had been hired to help the company withdraw from the public market were refuted.

Overall, the SPX edged 0.64 percent higher, halting its 1.25 percent three-day selloff. All sectors closed in positive territory, with Consumer Discretionary growth stocks outperforming (+0.97 percent). Financials also offered a buying opportunity (+0.90 percent), as easing concerns over a Turkish contagion allowed dip buyers to take advantage of Monday's bank shares selloff.

Materials (+0.83 percent) fared as the third best-performing sector, as steadier sentiment helped soothe trade worries as well. Defensive sector Utilities (+0.24 percent) underperformed as traders raced to increase their risk exposure, while Energy stocks (+0.23 percent) also lagged behind, tracking a surprise increase in US oil inventories.

Meanwhile, the Dow Jones Industrial Average inched 0.45 percent higher and the NASDAQ Composite climbed 0.65 percent.

Russell 2000 Daily Chart
Russell 2000 Daily Chart

The Russell 2000 outperformed, gaining 1.03 percent. The same tailwinds that are boosting investor appetite for the dollar as a safe haven are also favoring small-cap stocks for their minimal exposure to trade jitters. Technically, the index price is forming an ascending channel, as demand outpaces supply.

Despite thin summer trading and investors remaining cautious, the US equity bull market is just one week away from becoming the longest in history, though trade tensions between the US and China continue to linger.

USD/TRY Daily Chart
USD/TRY Daily Chart

On the Turkish crisis front, the country announced today that it will impose an additional tax on imports of a broad range of American goods, signaling its spat with the US is far from over.

The Turkish lira added 5.3 percent to its two-day rebound, which reached 12.35 percent in the Asian session. However, the EM currency is still 22.5 percent down for August. While yesterday’s bounce-back eased investor concerns over a possible contagion effect, today’s gains fell short of quelling renewed fears.

At the same time, other emerging market currencies continued their slide lower.

EUR/USD Daily Chart
EUR/USD Daily Chart

The euro hit its lowest levels since mid-2016, after it completed a descending channel and slipped below the November 2017 support.

Conversely, the Dollar Index extended a climb to a 14-month high. While the greenback benefited from higher risk appetite on Tuesday, it gained from today's search by investors for security, confirming its dual success as both a safe haven and a growth asset.

Investors also rotated into bonds, pushing the yield on 10-year Treasurys back below the 2.9 percent mark.

Oil ticked lower as focus returned to near-term supply risks, as cushing oil stocks rose for the first time since March. The commodity was pressured by the USD rally.

Bitcoin Daily Chart
Bitcoin Daily Chart

Bitcoin rebounded from yesterday’s selloff, after a bullish pushback before the close, forming an exceptionally solid hammer.

Up Ahead

Earnings reports due this week include:

      • Cisco (NASDAQ:CSCO), due after today's market close: $0.63 EPS forecast, VS $0.55 percent for last year’s same quarter.

      • Walmart (NYSE:WMT), due tomorrow before market open, $1.21 EPS forecast VS $1.08 for the same quarter a year earlier.

      • Brexit talks between the EU and the UK resume in Brussels on Thursday.

      • Retail sales data in the US comes out on Wednesday, followed by housing data on Thursday.

Market Moves

Stocks

Currencies

Bonds

        • Germany’s 10-year yield gained less than one basis point to 0.33 percent.

        • Britain’s 10-year yield slipped less than one basis point to 1.263 percent.

Commodities

        • The Bloomberg Commodity Index edged 0.5 percent lower to the lowest level in almost four weeks.

        • West Texas Intermediate crude declined 0.6 percent to $66.64 a barrel, the lowest level in almost eight weeks.

        • LME copper fell 1.6 percent to $5,948.00 per metric ton, the lowest level in 13 months.

        • Gold dropped 0.4 percent to $1,189.05 an ounce, the weakest level in almost 19 months.

U.S. Opening Bell: USD Rallies On Turkish Turmoil; Oil Tracks Lower
 

Related Articles

U.S. Opening Bell: USD Rallies On Turkish Turmoil; Oil Tracks Lower

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email