A positive mood dominated the US stock exchanges on Tuesday. Stock indicators S&P 500, and Nasdaq Composite continue to break records and rise above historical highs. The said growth cannot even be moderated by the unsatisfactory data on the country's economy. Market participants are still skeptical of the news that there is already progress made in the negotiation process on a trade agreement between the US and China.
The Dow Jones Industrial Average index was the only one that was in the red zone by the end of the trading day. It declined by 0.21% or 60.02 points, moving it to its current level of 28,248.44 points. The negative was due to the decline in the value of securities of Apple Inc., which happened for the first time in the last six trading sessions in a row.
The Standard & Poor's 500 index was able to grow 0.36% or 12.34 points. This allowed it to rise to its historical maximum value of 3443.62 points. Note that the record has been updated for the seventeenth time this year alone.
The Nasdaq Composite index also traded in positive territory rising 0.76% or 86.75 points, which moved it to the area of 11 466.47 points. At the same time, a record high level has been recorded for the thirty-eighth time since the beginning of this year.
Economic growth statistics also inspire market participants. The low-interest rates on mortgage loans, as well as the lifting of restrictive quarantine measures, contributed to the sharp increase in the activity in the real estate market.
New home sales in the US experienced a 13.9% increase in the second month of the summer. Earning a total yearly sales of 910 thousand. This indicator has been growing for the fourth month in a row, but such rapid dynamics have not yet been noted. It already managed to reach the maximum values for the last fourteen years. At the same time, experts' preliminary forecasts pinned for a growth of 1.8% which was rather modest than actual data. Last year's growth for the same data amounted to 36.3%.
Meanwhile, there was a decrease in the consumer confidence index in the US in the last month of the summer, which happened for the second time in a row. Note that for the month of July, it recorded a decrease of 91.7 points, and in August it dropped to 84.8 points. The index also underwent a correction in July and was initially listed at around 92.6 points. The new indicator came as a complete surprise to experts who argued that it should rise to 93 points.
Market participants, of course, have not yet reacted strongly to such an ambiguous dynamics in the growth of the US economy. Now, their worries have increased due to the speech of the head of the US Federal Reserve, which is to be held within the framework of a symposium in Kansas City. The said symposium will bring together heads of world Central Banks, finance ministers, as well as leading figures in the economy and financial markets. The event is scheduled for August 27-28 in an unusual format of online conferences in connection with the threat of coronavirus infection.
In addition, positive dynamics are noted in the negotiation process on a trade agreement between the United States and China. On Monday, representatives of the states were able to contact by phone and discuss some details of the first stage of the contract. Both sides then noted that there was a constructive and productive dialogue between the countries, which should lead to a consensus.
Asian stock markets, on the other hand, mostly traded on the red zone on Wednesday. Most of the stock market indicators show a decline, the situation is aggravated by the relatively weak activity in the market. Restrained market sentiment emerged amid outbreaks of coronavirus infections around the world. Market participants are closely following the release of the COVID-19 vaccine, but so far they are not consolidated by any data.
Japan's Nikkei 225 index dipped slightly by 0.03% Wednesday morning.
China's Shanghai Composite Index dropped quite solidly by 1.04%. The Hong Kong index also declined by 0.12%. NBC has made a significant injection into the financial system in order to maintain the volume of liquidity at the required level. The total amount of the tranche turned out to be about 200 billion yuan, which corresponds to 28.93 billion dollars. In addition, the interest rate on reverse REPO transactions with a maturity of 14 days was not revised and remained at the level of 2.2%.
South Korea's Kospi index became, perhaps, the only one that was able to reflect a positive dynamic with an increase of 0.08%.
Australia's S & P / ASX 200 Index fell 0.83%.
Meanwhile, the European stock exchanges traded in mixed directions on Wednesday. By the close of trading on Tuesday, most of the indicators showed contraction, which led to a slight rollback. The following day. the situation began to improve a little, but has not yet returned to the final positive.
The general index of large enterprises in the European region Stoxx Europe 600 fell 0.3%, at the closing od Tuesday's trading which sent it to the level of 369.75 points.
The UK FTSE 100 Index sank 1.11%. The German DAX index dropped slightly by 0.04%. Italy's FTSE MIB shed 0.41%. Spain's IBEX 35 index did not drop too much with 0.01%. But the French CAC 40 index was the only one who, in such conditions, was even able to increase by 0.01%.
The negative dynamics in the EU was mainly due to the weak statistics on economic growth. Germany's GDP reflected a very rapid decline, which has not happened in almost fifty years. At the end of the second quarter, the country's economy shrank by 9.7% compared to the previous indicator. In terms of annual rates, the decline was about 11.3%. Such indicators negatively affected investor sentiment, which led to a contraction in the market.
Nevertheless, the prevailing negative was fully offset by news about possible incentives in Germany and France.
