Bank Of England’s Interest Rate Decision
European futures, especially, the FTSE 100, are also paying extra attention to the Bank of England’s monetary policy decision. The Bank of England kept interest rate unchanged as it is already sitting at a record low level. The BOE found comfort in the fact that the Covid-19 situation is not as bad in the U.K. as it is in the U.S., and the coronavirus infection curve is still relatively flat
Having said this, the second coronavirus wave is emerging as the lockdown measures have eased off. The BOE knows that it needs to maintain its dovish tone for the V-shape recovery is out of reach. With little to no progress on Brexit matters, things are likely to remain difficult for the U.K.’s economy. The Bank is ready to do more if there is any need for more help, but for now, the BOE will reduce its bond-purchase pace to GBP 4.4 Billion per week starting from August 11.
Trump Administration Continues Its Pressure Against China
Steven Mnuchin is going hard on U.S. companies and asking them to bar Chinese applications from their app store. Every action has a retaliatory action when it comes to U.S.-China relations. Chinese officials are likely to come back with similar action if the U.S. companies are forced to ban Chinese application from their platforms. The question for traders is how much more adverse these relations can become and where is the limit before permanent and non-repairable damage takes place.
Coronavirus Update:
The global coronavirus tracker confirms nearly 702K deaths due to Covid-19 and mor than 18.6 million cases. Anthony Fauci, who has served as the director of the National Institute of Allergy and Infection diseases, said that the coronavirus testing is too slow which contradicts with Trump’s believe—nothing new. Trump believes that coronavirus testing is “best ever”.
Overall, the coronavirus situation continues to restrain the economic recovery efforts as North Carolina extends its reopening pause by another five weeks. It will remain in its phase 2 and this means bars, movie theaters and bowling alleys remain close along with limit on people gathering.
Global Stock Market Today
The global stock market had a down day today with the exception of Aussie and Korean stock markets. The Nikkei stock index closed lower by 0.43%, the Shanghai stock index dropped 0.45% while the HSI index declined 1.42%. The Korean KOSPI stock index advanced 1.1.25% and the Aussie ASX stock index soared 0.68%.
Gold Prices Made Another Record High
Gold prices are holding on to their gains and trade above the $2,050 mark. The upcoming U.S. initial jobless claims is the main event for gold prices and it is likely to bring higher volatility for the gold prices. The next immediate level of resistance for gold price is $2,200 and the gold price can get close to this level if the jobless claims data fails to impress the markets.
Dow Index And S&P 500 Index: Market Breadth
The U.S. stock market’s breadth shows no major shit among stock traders as bulls remain in control of the price. 47% of the Dow Jones stocks traded above their 200-day moving average yesterday.
The S&P 500 stocks shows more bullish market breadth. 54% of the shares traded above their 200-day moving average yesterday.
Stock Market Rally
The S&P 500 index continued its advance yesterday, the S&P 500 stock index soared 0.64%. The industrial sector led the gains for the S&P 500 stocks yesterday and eight out of eleven sectors closed with gains. Assurant (NYSE:AIZ) stock contributed the most gains, up 14.1% and Arista Networks (NYSE:ANET) stock was the biggest drag, declined 10.6%. The S&P 500 stock index is 1,94% below its 52 weeks high.
The Dow Jones Industrial Average index jumped 373 points yesterday and the Dow stocks advanced the index by 1.39%. 19 stocks of the Dow Index soared, and 11 shares of the Dow Jones index fell. Disney stock jumped higher by 8.8% and it was the biggest gainer for the Dow while Walmart (NYSE:WMT) stock declined 1.39%, the biggest drag for Dow Jones industrial average index.
The NASDAQ Composite, also known as the tech index, gained 28 points yesterday.