Daily Comments

Concerns over Turkey and other emerging markets weighed on Asian markets which settled lower. The Nikkei 225 lost -1.98%. The Shanghai Composite was down a modest -0.32%. European equities were lower, but well off their lows. The DAX fell -0.53%. Yields on 10-yr. Bunds were also lower at 0.317%. There were no major economic reports issued today. Yields on 10-Year Notes edged higher to 2.875%. The US$ Index was steady, holding on to its recent gains. On that strong dollar, December gold tumbled -1.6% below $1,200 to $1,198.90. The dollar was also felt in September crude which fell -0.6% to $67.20, although that was well off the lows. Overnight markets were sharply lower on the Turkish turmoil, but by the open in New York, losses had evaporated and equities began to move higher on continued strong earnings in the U.S. Big-cap tech led the way. Just as quickly, the optimism evaporated and equities sank back into the red. After testing the overnight lows, markets reversed yet again. Still, there was enough selling pressure to keep the averages in the red, and at the close, markets were moderately lower.


Japan Q2 GDP and July PPI were both stronger than anticipated. Asian markets settled mostly lower. The Nikkei 225 lost -1.33%. The Shanghai Composite managed a gain of +0.04%. The turmoil in Turkey led to a sharp selloff for European equities. The DAX tumbled -1.99%. Yields on 10-yr. Bunds fell to 0.323% as investors sought a safe haven in the storm. The July Consumer Price Index rose +0.2% (core +0.2%) as expected. The July Treasury Budget at -$76.9B was a bigger deficit than expected. Baker-Hughes reported that the U.S. oil rig count jumped by 10 to 869. Yields on 10-Year Notes fell back to 2.873%. The US$ Index spiked again to the highest level since June of last year even as interest rates fell. December gold fell less than -0.1% to $1,219.00. September crude was higher, closing up +1.2% at $67.63. Early selling pressure was accompanied by heavy volume. Even as selling pressure and volume eased, most averages remained weak, but the small-cap Russell 2000 recovered and moved temporarily into the black. Selling resumed, but averages came off their lows late in the session, but at the close markets were still broadly lower.


The China July CPI and PPI both rose more than expected. The China Securities Regulatory Commission will ease regulations that will allow more access for foreign funds and overseas investors. The Nikkei 225 fell -0.20%. The Shanghai Composite whipsawed higher, rising +1.85%. European equities finished mixed as strength in retail was offset by weakness in energy. The DAX managed to add +0.26%. Yields on 10-yr. Bunds moved lower again, and are now at 0.379%. Initial Claims for 08/03 dipped to 213K. June Wholesale Trade edged higher by +0.1% while May was revised lower. The July Producer Price Index was surprisingly benign at +0.0% (core +0.1%.) Yields on 10-Year Notes drifted back to 2.926%. The US$ Index closed at a new high for the year. December gold eased -0.1% to $1,219.90. September crude lost another -0.2% to close at $66.81. Equities began the day treading water. Volumes remained very light. Markets tried to creep higher, but with no enthusiasm, neither bulls nor bears could gain an advantage. Most averages turned modestly lower late in the day.