- US equities portray mixed start to the key week.
- DJI, S&P 500 renew all-time high but Nasdaq prints mild losses.
- Virus woes escalate and so do geopolitical tussles but weak data backs easy money policies.
- Tesla dropped, Sonos rose and oil recovered with specific catalysts.
US shares remain indecisive despite the key benchmarks notched fresh record high on Monday. Sour sentiment and a lack of major catalysts could be linked to the mixed performance. However, bulls seem to struggle of late amid multiple challenges for further upside.
That said, Dow Jones Industrial Average (DJI) printed a fresh all-time high of 35,631.49 before closing with 110.02 points of an upside, or 0.31%, to 35,625.00. S&P 500 was on the same line as it renewed the record top to 4,480.26 while closing with 0.26% daily gains around 4,479.66. It should be noted, however, that Nasdaq bucked the trend with 0.20% daily loss, or 29.10 points of a downside, to 14,793.80.
Fears that the covid cases in the US could jump to 200,000, matching early 2021 levels, joined escalating virus infections in China, Australia and the UK to challenge the market sentiment. The COVID-19 also hurt the data as the recent numbers from the US and China, namely Empire State Manufacturing Index, Retail Sales and Industrial Production, came out dismal.
Elsewhere, deadlock over US stimulus and geopolitical fears emanating from the Middle East is an extra burden on the market sentiment.
However, hopes that the downbeat economics will keep easy money on the table favor equities. Also on the positive side could be the latest upbeat company earnings season and hopes of more government relief packages.
Against this backdrop, the US 10-year Treasury yields dropped 2.9 basis points to 1.268% by the end of Monday’s North American trading session.
Stock-specific news highlights Tesla’s over 4.0% drop over the US National Highway Traffic Safety Administration’s go for autopilot checks. Further, Paysafe slumped over 15% amid a mixed outlook for current and futures earnings. Alternatively, Sonos cheered the US International Trade Commission’s preliminary support to claims that Alphabet infringed on the five speaker patents.
Looking forward, the US Retail Sales for July, expected -0.2% versus +0.6% prior, will be the key, followed by a speech from Fed Chair Jerome Powell at an online town hall event.