Forex
U.S. stock indices data: up 1-1.2%
The U.S. stock market ended the trading on the positive side. The major U.S. stock indexes are highly correlated. The Dow Jones and S&P 500 closed at their highest levels in nearly seven weeks. Traders evaluated a new batch of corporate reports and fresh U.S. stock indices data.
U.S. stock indices are changing daily. The U.S. economy shrank 0.9 percent year on year in the second quarter, preliminary data from the U.S. Commerce Department showed. Analysts polled by Trading Economics had expected growth of 0.5%; the Bloomberg consensus forecast was for a rise of 0.4%.
Investors think the data on U.S. stock market indices may force the Federal Reserve to stop the cycle of aggressive tightening of rates soon.
At the end of this week’s meeting, the Federal Reserve expected to raise interest rates by 75 basis points, to 2.25-2.5%, and confirmed that it expects further tightening of monetary policy.
Meanwhile, the number of Americans filing for unemployment benefits for the first time fell by 5,000 last week to 256,000, according to a report from the U.S. Labor Department. According to revised data, a week earlier, the index was 261 thousand, not 251 thousand, as it was informed earlier. Experts interviewed by Bloomberg agency, on average, expected to reduce the number of applications to 250 thousand.
Current U.S. stock exchange index
The value of Dow Jones Industrial Average increased by 1.03% to 32529.63 points by closing of trading.
Standard & Poor’s 500 rose by 1.21 per cent to 4,072.43 points.
The Nasdaq Composite rose 1.08% to 12162.59 points.
Hershey Co. rose 2.8%. The U.S. chocolate maker reported net income rose 5 percent in its fiscal second quarter and improved its full-year guidance.
The market value of Etsy Inc. jumped 9.9%. The online trading platform operator reported better-than-forecast earnings in the second quarter, with revenues matching analysts’ forecasts.
Ford Motor Co. shares were up 6.1%. The U.S. automaker posted a 19% increase in net income in the second quarter of 2022, and adjusted earnings and revenue were better than market expectations. The company reaffirmed its outlook for the year.
Shares of Harley-Davidson Inc. are up 7.8%. The largest U.S. motorcycle maker boosted net income and lowered revenue in the second quarter of 2022, with results significantly better than analysts’ expectations.
Shares of Qualcomm Inc. fell 4.5%. One of the world’s largest semiconductor makers increased net profit 1.8 times in the third quarter of fiscal 2022, but gave a weak outlook amid falling consumer demand due to high inflation.
Comcast Corp. ‘s stock price was down 9.1%, though the largest U.S. Internet and cable TV provider posted adjusted earnings and revenue better than market forecasts for the second quarter of fiscal 2022.
Meta Platforms shares were down 5.2%. The company recorded a decline in revenue in the second quarter amid a decline in advertising revenue.
Altria Group’s stock declined by 0.2%. One of the largest tobacco companies in the world cut net income 2.4 times in the second quarter of 2022, while revenues fell by 5.7%.
Pfizer Inc. shares lost 1.6%, although the company reported better than market forecasts adjusted profit and revenue in the second quarter of 2022 due to increased sales of drugs to fight COVID-19.
JetBlue Airways Corp. ‘s stock price was down 0.4%. The U.S. airline entered into an agreement to buy Spirit Airlines (SPB: SAVE) Inc. for $3.8 billion. Spirit Airlines shares rose 5.6%.
Investing.com – The US dollar has had a difficult summer, dropping substantially during the month of August, but JPMorgan thinks those predicting the demise of the U.S. currency are getting ahead of themselves.
At 06:00 ET (10:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower to 101.127, having lost 1.6% over the course of the last month.
“Diversification away from the dollar is a growing trend,” said analysts at JPMorgan, in a note dated Sept. 4, “but we find that the factors that support dollar dominance remain well-entrenched and structural in nature.”
The dollar’s role in global finance and its economic and financial stability implications are supported by deep and liquid capital markets, rule of law and predictable legal systems, commitment to a free-floating regime, and smooth functioning of the financial system for USD liquidity and institutional transparency, the bank added.
Additionally, the genuine confidence of the private sector in the dollar as a store of value seems uncontested, and the dollar remains the most widely used currency across a variety of metrics.
That said, “we are witnessing greater diversification and important shifts in cross-border transactions as a result of sanctions against Russia, China’s efforts to bolster usage of the RMB, and geoeconomic fragmentation,” JPMorgan said.
The more important and underappreciated risk, the bank added, is the increased focus on payments autonomy and the desire to develop alternative financial systems and payments mechanisms that do not rely on the US dollar.
“De-dollarization risks appear exaggerated, but cross-border flows are dramatically transforming within trading blocs and commodity markets, along with a rise in alternative financial architecture for global payments,” JPMorgan said.
By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee ended at its record closing low on Thursday, but was little changed versus the previous session, as the central bank’s intervention helped negate the incessant dollar demand from importers.
The rupee ended at 83.9825 to the U.S. dollar compared to 83.9650 in the previous session. Intraday volatility was muted, similar to the activity in recent sessions, with the local currency trading in a 2 paisa range.
The Reserve Bank of India yet again sold dollars to support the rupee, which prevented it from slipping past the crucial 84 level.
“The RBI was at it through most of today’s session. There is obviously just no way of knowing when the RBI will decide that it has had enough of defending 84,” a currency trader at a bank said.
The rupee needed the central bank’s help even on a day when the dollar was weak across the board.
Weak U.S. job opening data pushed the odds of a 50-basis-point Federal Reserve rate cut this month higher to 45%, prompting traders to dump the dollar.
“The rupee today completely disregarded the dollar’s decline, like it has been doing for a number of weeks now,” Kunal Kurani, associate vice president at Mecklai Financial said.
“Now let’s see whether Friday’s (U.S.) job report will change things.”
August’s U.S. non-farm payrolls data is being considered the most important jobs report in a long time in the wake of comments by Federal Reserve Chair Jerome Powell that further weakening in the labour market will not be welcome.
Friday’s report will decide whether the Fed will cut rates by 25 bps or 50 bps at the Sept 17-18 meeting. Right now, the futures market indicates that it is a toss-up.
By Elena Fabrichnaya
MOSCOW (Reuters) – Major Russian banks have called on the central bank to take action to counter a yuan liquidity deficit, which has led to the rouble tumbling to its lowest level since April against the Chinese currency and driven yuan swap rates into triple digits.
The rouble fell by almost 5% against the yuan on Sept. 4 on the Moscow Stock Exchange (MOEX) after the finance ministry’s plans for forex interventions implied that the central bank’s daily yuan sales would plunge in the coming month to the equivalent of $200 million.
The central bank had been selling $7.3 billion worth of yuan per day during the past month. The plunge coincided with oil giant Rosneft’s 15 billion yuan bond placement, which also sapped liquidity from the market.
“We cannot lend in yuan because we have nothing to cover our foreign currency positions with,” said Sberbank CEO German Gref, stressing that the central bank needed to participate more actively in the market.
The yuan has become the most traded foreign currency on MOEX after Western sanctions halted exchange trade in dollars and euros, with many banks developing yuan-denominated products for their clients.
Yuan liquidity is mainly provided by the central bank through daily sales and one-day yuan swaps, as well as through currency sales by exporting companies.
Chinese banks in Russia, meanwhile, are avoiding currency trading for fear of secondary Western sanctions.
At the start of September, banks raised a record 35 billion yuan from the central bank through its one-day swaps.
“I think the central bank can do something. They hopefully understand the need to increase the liquidity offer through swaps,” said Andrei Kostin, CEO of second-largest lender VTB, stressing that exporters should sell more yuan as well.
The acute yuan shortage also follows months of delays in payments for trade with Russia by Chinese banks, which have grown wary of dealing with Russia after U.S. threats of secondary Western sanctions. These problems culminated in August in billions of yuan being stuck in limbo.
Russia and China have been discussing a joint system for bilateral payments, but no breakthrough is in sight. VTB’s Kostin said that since Russia’s trade with China was balanced, establishing a clearing mechanism for payments in national currencies should not be a problem.
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