Mornings Markets: Investors wary of Wall Street records
- UK: BoE interest rate decision 1100 GMT
- US: CPI 1230 GMT
- US: weekly unemployment insurance claims 1230 GMT
- US: weekly natural gas storage report 1430 GMT
The S&P 500 rose to a third consecutive record on Wednesday, but bulls are nervous as valuations stretch ever-further in an apparent disconnect with fundamentals.
According to the Financial Times, Omega Advisors head Leon Cooperman told the CNBC hedge fund conference in New York this week that a 5-8% correction could happen "at any time", while Tiger Management's Julian Roberston expressed concerns about a bubble forming.
Funds are increasingly seeking protection against turmoil and market downturns as stocks extend further, reports the FT.
Apple shares continued their post-iPhone launch downtrend with a further 8% drop on Wednesday as markets expressed wariness over the California tech giant's high-priced new flagship device. Meanwhile, Asian stocks could not find a determined bid tone after Wall Street's banner day and closed broadly lower, with the Nikkei 225 down 0.29% and the Hang Seng index declining by 0.47%.
In China, the yuan continued to fall against the USD after Beijing set the daily fix at 6.5465, or 0.1% softer than the previous day.
The USD index pared gains as well, dropping 0.1% overnight, while gold continued to retreat, currently trading at $1,321.68/oz. Crude oil largely held its post-EIA report gains through the Asian session.
On the data front, investors will focus on the Bank of England's interest rate decision at 1100 GMT and US CPI at 1230 GMT. In Washington, House Speaker Paul Ryan said that legislators are preparing the long-awaited tax reform plan, but nationalist president Donald Trump's base are concerned that the GOP – Trump, really – have given up too much ground on the immigration front to secure a deal with Democrats.
- Asian markets were mixed after weaker than expected China data
- China's factory output grew 6.0% in August from a year ago, below expectations
- China's fixed-asset investment rose 7.8% in the first eight months, below forecasts
- China's retail sales rose 10.1% in August, also below forecasts
- The Australian jobless rate held steady at 5.6% in August
- Australian employment surged more than three times forecasts
- Markets will turn their focus to upcoming US CPI inflation data
- Crude oil held most of its 2% overnight gain
- US dollar held gains after House Speaker Paul Ryan flagged a tax reform plan
- USD was steady against the yen at a near-four-week high
- AUD was at 0.7976 ahead of the jobs data, but traded at 0.8003 afterwards
- USDCAD found support at 1.2150 and trades at 1.2180 into the European bell
From the Floor
Stocks likely to slip. “Equities will likely fade today; we have seen some impressive gains [of late],” says Garnry.
Upbeat oil. “In the short term, [there’s] upbeat sentiment in the market, but I think we are close to some pretty firm resistance,” says Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
The US dollar held onto a near four-week high against the yen ahead of key China data, writes the team at Saxo APAC Sales Trading.
All eyes on jobs
The Australian market opened lower ahead of key employment data, and the Aussie dollar was below 0.80 against the USD, writes the Saxo Capital Markets (Australia) team.
Although automotive sector bonds remain pricey – particularly those of EV manufacturer Tesla – some companies are making all the right moves reports Althea Spinozzi.
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