Pre-Market: Stocks Grind Higher as Google Beats, Turkish Lira Tumbles
Global stock markets are generally higher today, with European indices leading the way, being up by more than 1% on average. China rallied strongly overnight as the government launched a large-scale stimulus program, reacting to the recent weakness in economic numbers, while the local central bank also continued its interbank liquidity-providing operations. All of these put further pressure on the Yuan,
DAX Index, 4-Hour Chart Analysis
Thanks to that, Asian equities set a bullish tone for the day, and although the European Service and Manufacturing PMIs were mixed, the much better than expected German Manufacturing measure boosted markets, muting trade war fears.
Shanghai Composite, 4-Hour Chart Analysis
The ongoing earnings season continues to make headlines too, and with more than $2 trillion in market cap reporting this week in the US alone, day-to-day moves could be hectic, especially given the low-volume summer environment.
Alphabet (GOOG), 4-Hour Chart Analysis
The main US benchmarks followed the lead of the global market, and the overnight rally was also helped by the better than expected 2Q numbers from Google parent Alphabet (GOOG), which jumped to a new all-time high after beating analyst estimates across the board, thanks to a surge in cloud services and steady growth in its core advertising business. Earnings in Europe were also on the positive side, and also helped risk-on sentiment.
S&P 500 Futures, 4-Hour Chart Analysis
Technically speaking the US market is still miles ahead of its global peers, and the S&P 500 is trading at a more than 4-month high today, finally getting close recovering the February mini-crash, after spending more than 4-months in the 3-day range of the volatility-driven slump.
The index is still some ways of its all-time high, while the market-leading Nasdaq is once again trading at a fresh record high, and drilling down to the level of individual stocks, negative divergences are still apparent.
Turkish Lira Beaten Down on Quiet Day for Currencies
USD/TRY, 4-Hour Chart Analysis
The Turkish central bank provided a shocker today, as it didn’t raise its benchmark rate, despite the widespread consensus. The currency instantly plunged lower towards its all-time low against the US Dollar, but for now, a break-out in the pair has been avoided. The surprise decision comes after a clear legal take over of the central bank by President Erdoğan, and could send a negative message to investors.
Currencies are otherwise little changed, with the USD generally being weaker compared to its major counterparts. The Australian Dollar is among the strongest majors, with the Chinese bounce fueling its rally, while the Great British Pound is also outperforming. The USD weakness that has been sparked by Trump’s oitlash last week prevented a new high in the reserve currency, but the uptrend clearly remains intact, and the correction has been shallow so far.
Commodities are modestly higher across the board, with still crude oil being the most volatile consolidating in a relatively wide range near the $68 per barrel level. Copper is holding up above long-term support, for now, while gold is still trying to establish a bottom, being stuck near the $1225 level.
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