Daily summary: Tech stocks rally tempers economic concerns

• ECB uncertain about the economic outlook
• Disappointing US jobless claim report
• Tech rally lifts US indices

European indices finished today's session lower after the accounts of the ECB's July meeting showed that policymakers remain very concerned about the outlook for growth and inflation in the eurozone. Also not all of them are keen for another increase in the central bank's €1.35 trillion PEPP.  Meanwhile Europe continues to struggle with the second wave on COVID-19 infections. Today Italy reported the highest number of new cases since late May.  Germany reported almost 1600 new cases yesterday, a level not seen  since April. French President Macron will discuss the escalating coronavirus crisis with German Chancellor Merkel later in the day. Dax fell 1.1%, CAC 40 dropped 1.3% and FTSE 100 finished 1.6% lower.

 

US indices managed to erase early losses as gains in giant technology companies, such as Apple Inc. and Tesla Inc, drove the Nasdaq 100 toward a record. Meanwhile investors try to digest recent FOMC Minutes which presented a gloomy outlook for the US economy and a disappointing figures from US labour market which showed  that the weekly jobless claims totaled 1.106 million last week, surpassing the analysts' estimates of 923,000. A separate report from the Philadelphia Fed showed business conditions index fell more than expected to 17.2 points in August from 24.1 points in July.
Meanwhile, China’s commerce ministry said that both countries will meet "in the coming days" to discuss the progress of the Phase 1 trade deal reached in February.  On the corporate front,  Alibaba posted better than expected quarterly figures while earnings from Estée Lauder came in below expectations. Meanwhile Tesla stock is approaching psychological level of $2000 per share.

Oil is trading lower today, with Brent declined 1.3% and WTI oil fell over 2% in the afternoon after poor jobless claims report added to a cautious view from the Fed about the U.S. economic recovery to weigh on prices. Also, OPEC believes that a second  wave of infections poses serious threat for the recovery in the oil market. However according to Reuters, recent  OPEC+ internal report showed that some OPEC+ members will be forced to reduce production by as much as 2.31 million barrels per day to compensate for their overproduction.

 

Gold and silver prices swung between gains and losses on Thursday, as the dollar rebounded from two-year lows. However ongoing concerns regarding global economic recovery and simmering geopolitical tensions continue to support demand for safe haven assets.

 

A lot is on the agenda tomorrow. Handful of Manufacturing and Services PMI's readings from the Eurozone will be released during the European session while Canada’s retail sales figures and US  Manufacturing and Services PMI data will be on watch during US trading hours.

GBPUSD- currency pair bounced of the 100 MA (green line) and is currently testing resistance at 1.3188. If buyers manage to break above it, an upward impulse towards 1.3270 could be launched. On the other hand, breaking below the 100  MA could be seen as a bearish sign. Local support is located at 1.28. Source: xStation5

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