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S&P500
US Market. Rise again and new highs.
At the opening week the US market hit new highs, the S&P500 index up 0.4% and NASDAQ 0.9%. Old well-known companies fell behind, with the Dow index dropping by 0.16% on Monday.
Covid-19 pandemic is spreading globally. The number of new cases in the world rose by 520,000 on Monday. However, it is much lower than the current third wave highs of 750,000. Again the US tops the list of new cases in the world, up 120,000 cases yesterday. Britain takes first place in Europe, rising by 26,000 cases. Vaccination in developed countries has slowed at about 60% fully vaccinated and nearly 10% who received one vaccine dose. Experts attribute the high illness rate to the Indian Covid-19 variant, against which current vaccines are less effective.
Asian markets were mixed on Tuesday morning, with China index down 1% and Japan index up 1.2%.
Commodity market. Brent crude oil, October futures are holding above $73, they are worth $73.30 on Tuesday morning. According to unofficial reports, despite high oil prices OPEC will not change its plan for slowly increasing supply at the next meeting.
Significant data on China. The services sector showed a sharp decline in August with the service sector activity index dropping to 47.5 from 53 in July. A value below 50 indicates a decline. Manufacturing activity remained unchanged at 50.1.
The US has completed the evacuation of its soldiers and Afghan supporters from Afghanistan. The last plane left Kabul on August 31. According to various sources, the US evacuated up to 100,000 people, about 70-80% of them are anti-Taliban Afghans. This is the largest evacuation operation of Western troops since the Vietnam War.
China has banned minors from playing computer games on weekdays. This news seems amusing, but it is a major blow to the gaming industry.
The S&P500 is at 4528, ranging between 4500 and 4550. The US market's rise was even more vertical on Monday, implying even more volatile. Potentially, the risk of a strong drop has only increased. With the high slope of the uptrend channel, the S&P500 index has been moving towards economic recovery from the pandemic since May 2020. On Monday, it hit the upper limit of the channel at closing point. Today is the last day of the US fiscal year. This fact may trigger a strong market rebound today or tomorrow, on September 1.
Economic news. Dallas business activity plunged to 9 from 27 a month earlier.
Chip shortage is in progress. Scania, a major European truck manufacturer, will stop its assembly line for a week due to chip shortage.
The USDX index is at 92.45, ranging between 92.10 and 92.70. The dollar index continued to decline, with the euro remarkably consolidating against the dollar to 1.1825 on Tuesday morning. This is the market reaction to the reassuring statements of the Federal Reserve head. However, the dollar might continue rising in case of strong economic and employment data in the US on Wednesday and Friday.
The USDCAD pair is at 1.2570, ranging from 1.2500 to 1.2650. The US dollar is down against the Canadian dollar due to high oil prices.
Conclusion. The market is anticipating significant US data on Wednesday-Friday.
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