U.S. Stocks Edge Higher; Dollar, Treasuries Gain: Markets Wrap

Marco Green
August 5, 2020

Spot gold reached an intraday record. Microsoft Corp. advanced as it tried to salvage a deal for the USA operations. European auto and tech shares surged after the euro area's first manufacturing expansion in one-and-a-half years.

The dollar bounced higher following its worst July in a decade and Treasuries fell across the yield curve as data showed USA manufacturing expanded in July at the fastest pace since March 2019.

Microsoft rose 2.7 per cent before the bell as it said it would push ahead with talks to acquire the US operations of Chinese-owned TikTok after President Donald Trump reversed course on a planned ban of the short-video app.

On the virus front, California reported the fewest new coronavirus cases since June, while Florida and Arizona also saw their infections slow, signaling an easing in some of the US states hardest-hit by the pandemic in recent weeks.

"Momentum begets more momentum, and the markets have been overbought we believe, but the demand to buy has been there", said Bob Phillips, managing principal at Spectrum Management Group. "I would probably recommend some sort of consolidation, some sort of retracement because I think the values have just gotten over extended".

The credit score company likewise stated the future instructions of USA financial policy depends in part on the November election and the resulting makeup of Congress, warning there is a danger policy gridlock might continue. Trump said TikTok will have to close its USA operations by September 15 - unless there's a deal to sell the social media network's American operations.

Elsewhere, equities rose in Japan and China, where mainland-listed technology stocks surged on expectations of support from Beijing in response to US moves against Chinese-owned software companies.

Dallas Fed President Robert Kaplan discusses the USA economy at Thursday event.

S&P 500 Index futures extended gains, with Microsoft Corp. rising in pre-market trading as it tries to salvage a deal for the US operations of TikTok.

But the US technology sector has scaled fresh record highs, and last week Apple became the world's most valuable company.

In Singapore, the Straits Times Index acquired 30.79 points, or 1.2%, to 2,515.70.

The euro traded little changed at $1.775.

E-Mini futures for the S&P 500 () dithered either side of flat. The dollar steadied on the yen at 105.95 after hitting a 4-1/2-month low last week at 104.17.

The real rate hit a record low amid a marked flattening of the yield curve as investors wager on more accommodation from the Federal Reserve.

The yield on 10-year Treasuries decreased five basis points to 0.51%.Britain's 10-year yield fell two basis points to 0.074%.Germany's 10-year yield dipped three basis points to -0.55%. German government bond yields rose slightly to -0.527%.

West Texas Intermediate crude rose 1.5% to $40.87 a barrel.

The recent decline in the dollar combined with super-low real bond yields has been a boon for gold, which hit $1,984 an ounce early on Monday and seemed on track to take out $2,000 soon.

Australia's retail sales data for June rose 2.7% month-on-month on a seasonally adjusted basis, according to data released Tuesday by the Australian Bureau of Statistics.

Other reports by Click Lancashire

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