Wednesday, January 8, 2020

Stocks look set to fall while safe haven assets and oil are likely to continue to surge on Wednesday

Tags
  • Dollar
  • Gold
  • Oil
  • Nasdaq
  • ISM PMI

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Market Recap: Stocks look set to fall while safe haven assets and oil are likely to continue to surge on Wednesday

Stocks in the US slipped on Tuesday, as investors remained cautious of tensions escalating between the US and Iran. But Nasdaq remained flat as chipmakers' stock rose. Micron surged 8.78% on Tuesday after the chip company was upgraded to outperform at Cowen, and as investors expect memory chip prices to start its recovery cycle.

Indexes Change (%) Net Change Closing Price
Dow Jones -0.42% -119.70 28,583.68
S&P500 -0.28% -9.10 3,237.18
Nasdaq -0.03% -2.88 9,068.58
*Source: Bloomberg

Better-than-expected data in the US services sector and higher demand for safe haven assets drove the greenback on Wednesday. ISM Non-Manufacturing PMI rose to 55.0, beating expectations and signalling continued expansion in the services sector in the US. But the slower pace of employment in the sector may be a signal that December’s payrolls may not grow as much as expected.

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Gold continued to gain momentum, rising to 1574.37 while the yen retreated against the dollar on Tuesday. US Treasuries mostly fell, with benchmark 10-year yields rising slightly by 1bp to 1.82%.

Safe Haven Assets Change (%) Net Change Closing Price
Gold 0.55% 8.63 1,574.37
Silver 1.40% 0.25 17.95
JPY -0.06% -0.07 108.44
*Source: Bloomberg
US Treasury yields Change (bps) Yield (%)
2-Year 0 1.54%
10-Year 1 1.82%
30-Year 2 2.31%
*Source: Bloomberg

Oil prices ended Tuesday’s session lower but spiked on Wednesday morning after the Pentagon confirmed that Iran had fired a series of rockets at two US-Iraqi airbases in the morning. WTI Crude Oil futures surged 4.31% to US$65.46 per barrel as of 8.24am (GMT +8).

Oil Futures Change (%) Net Change Closing Price
Brent Crude -0.93% -0.64 68.27
WTI Crude -0.90% -0.57 62.70
*Source: Bloomberg

Major indices in Asia fell on Wednesday morning as well thanks to news of Iran's attack. The Nikkei, KOSPI and ASX200 indices all started lower and continued to fall in the morning. US equity futures were lower as well, signalling that global stocks look set for losses on Wednesday.

Asia Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index -1.98% -467.86 23,107.86 8:11:20 AM
KOSPI Index -1.30% -28.20 2,147.34 8:31:20 AM
ASX200 Index -0.86% -59.04 6,767.40 8:31:06 AM
Hang Seng Futures -0.24% -68.00 28,314.00 2:59:56 AM
*Source: Bloomberg
US Futures Change (%) Net Change Last Price As of (GMT +8)
Dow Futures -0.96% -275.00 28,247.00 8:06:10 AM
S&P500 Futures -1.04% -33.75 3,201.25 8:06:08 AM
Nasdaq Futures -1.20% -106.25 8,747.00 8:06:09 AM
*Source: Bloomberg

Macro events for the day ahead (all timings are in GMT +8):

  • Germany Nov Factory Orders (3pm)
  • US Dec ADP Employment Change (9.15pm)