Spreadex Market Update
Positive Earnings Propel DJIA to 12-Day Winning Streak
Markets were supported by strong earnings reports, leading to a rally in the Asian session that lost steam in Europe. However, risk appetite returned in the US following better-than-expected earnings from prominent companies like GM and 3M. The Dow Jones Industrial Average (DJIA) notched its 12th consecutive day in the green, driven by General Motors' stellar performance.
Key Factors for Today
- General Motors (GM) Earnings Propel DJIA to 12th Consecutive Winning Day
- Richmond Fed Manufacturing Beats Expectations, Dollar Dips
- Crude Inventories Surprise Build, But IMF Outlook Brightens
- Australian Inflation Hits One-Year Low, Aussie Remains Volatile
Market Movers
- Dow Jones Industrial Average (DJIA): The index rose for the 12th consecutive session, marking its longest winning streak since February 2017. Positive earnings from General Motors were the primary driving force, while the Federal Open Market Committee (FOMC) decision remained pivotal for further momentum.
- Richmond Fed Manufacturing Index: The July reading surpassed expectations, indicating resilience in the manufacturing sector despite a slight drop in new orders. Consumer confidence also rose, providing additional support to the US dollar.
- Crude Oil Prices: The American Petroleum Institute (API) reported an unexpected increase in crude inventories, but the market found support from the IMF's optimistic economic outlook.
- Australian Dollar (Aussie): The currency closed higher on Tuesday, despite lower inflation figures. However, it faced resistance in moving past key levels.
Economic Calendar
- EIA Crude Oil Stock Change
- Fed Interest Rate Decision
- Fed Press Conference
- US Building Permits
The Big News
Dow's 12-Day Winning Streak Sparks Investor Optimism; FOMC Decision Looms Large
The Dow's 12-day winning streak has investors brimming with optimism, especially after General Motors' robust earnings report. The index's performance since February 2017 is a testament to the overall strength of the market. However, the FOMC's upcoming decision could sway the trend. With 35260 serving as short-term support and 35880 as expected resistance, traders are closely monitoring the central bank's stance on interest rates and economic outlook.
Strong Economic Indicators Influence Dollar Ahead of Fed Decision
In economic indicators, the Richmond Fed manufacturing index showcased strength, with a reading of -9, beating the forecasted -10. Consumer confidence also surged to 117.0, well above the expected 110.5. These positive numbers played a role in the dollar's slight dip, as investors eagerly awaited the conclusion of the Federal Reserve's policy meeting.
Crude Inventories Surprise Amid Positive IMF Economic Outlook
On the energy front, the API reported an unexpected build in crude oil inventories. However, the market remained optimistic due to the IMF's upgraded global economic outlook. The forecast of 3.0% global growth this year, up from 2.8%, and improved projections for the US and China are contributing to the positive sentiment.
Australian Dollar Faces Volatility as Inflation Hits One-Year Low
Amid the market activity, the Australian dollar experienced volatility after the country's inflation rate fell to a one-year low of 6% YoY. While Treasurer Jim Chalmers acknowledged the progress, he expressed a desire for a faster moderation of inflation. The Aussie currency's performance is being closely watched as it navigates through key levels of support and resistance.
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