Daily summary: Global stocks struggle as tech remains under pressure

• Moderate declines in Europe after ECB decision
• US labor market recovery is stalling, Tech stocks lower
• Surprise build in US crude stocks

 

European indices finished today's session  mostly lower after the ECB left interest rates unchanged as widely expected and decided to keep the pandemic bond-buying program unchanged. ECB expects that region economy will shrink 8% this year, which is lower compare to the previous estimates of an 8.7% decline. During the press conference, President Lagarde said that the euro appreciation was discussed but the bank does not target any level. On the Brexit front, emergency negotiations regarding UK’s plan to undercut parts of the Withdrawal Agreement started today. The EU warned that if the UK will implement new legislation then this will be considered as serious violation of the Withdrawal Agreement and international law. According to the new bill, ministers would acquire power to disapply parts of the Northern Ireland protocol of the Withdrawal Agreement by modifying export declarations and other exit procedures. Meanwhile concerns regarding surging global coronavirus infections weighed on market sentiment. French authorities are considering imposing new local lockdown amid virus resurgence. On the data front, French industrial output rose less than expected in July while the Italian output came in above market forecasts. During today's session DAX fell 0.1%, CAC 40 dropped 0.3%, FTSE100 finished 0.2% lower while the FTSE MIB rose 0.1%.

 

US indices erased earlier gains as tech shares struggled to uphold bullish momentum from the previous session.  Apple stock dropped  0.7% after rising as much as 2.7%. Tesla, which was up more than 7% is trading 5.1% higher. Netflix, Facebook, Amazon all fell from their session highs. Alphabet, Microsoft and Alibaba shares turned negative. Meanwhile, weekly jobless claims numbers stayed below 1 million for 2 straight weeks. However, number of people applying for unemployment benefits was unchanged at 884K this week ended, the same as an upwardly revised 884K reported in the previous week. Today's reading came in above analysts' expectations of 846K which may inidicate that US labor market recovery is stalling.

 

WTI crude dropped 0.4% to trade around $37.9 a barrel, while  Brent fell more than 0.45% to around $40.50 a barrel, after both the EIA and API reports showed a surprise increase in US crude inventories. According to EIA, crude stocks rose by 2.032 million barrels, while markets expected a 1.887 million decline. Yesterday API data showed that oil inventories increased by 3 million barrels in the latest week, compared to analysts’ estimates of 1.4 million barrels decrease.
Gold price rose above $1,960 an ounce and silver price jumped above $27.4 an ounce as dollar extend losses after the ECB decision.

EURGBP - The British pound is again under pressure today. The currency pair rose to its highest level since March due to concerns about Brexit deal. During today’s session, pair broke above the major level of support at 0.9160 and continues its upward movement towards strong resistance at 0.9300. Source: xStation5

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