Originally published by Rivkin Securities
US stocks surged late in the session as a deal between the US and the EU was struck on trade that would avoid a trade war. In the last 30 minutes of trading, the Dow Jones lifted from virtually unchanged to up 0.7% for the day while the S&P 500 closed up 0.9%. Although the Nasdaq 100 also had a strong session, Facebook (NASDAQ:FB) stock was down sharply in after hours trading following the release of its quarterly report. While the company is still growing, growth rates are declining. For example, monthly active users in the second quarter grew at the weakest pace on record. FB stock declined 20% in after hours trading.
US bond yield have edged slightly higher with the 10-year yield now at 2.97%, again threatening to break through the 3.0% level. Australian bond yields, on the other hand, continue to sit substantially lower than US yields with our 10-year bond trading at 2.7%. This is a rare occurrence from a historical perspective and reflects the fact that the US central bank is well into its tightening cycle while the Reserve Bank of Australia (RBA) is determined to maintain low rates for at least the rest of this year. Australian CPI data was released yesterday which showed that underlying CPI is back below the lower end of the RBA’s target 2-3% range.
Tonight, the US releases its core durable goods orders data which is expected to show growth of 0.5% for the month.
Data Releases:
- US Durable Goods Orders 10:30pm AEST