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Writer's pictureThe Trade Academy Team

Wednesday Morning Coffee - Markets Update - 16 October 2024 - ASML Earnings Hit Tech Stocks, Fed Rate Cut Hints Boost Dollar, LVMH Drops on Weak Chinese Demand

Updated: Oct 17


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Markets Update: Gloomy ASML forecast drags down chip stocks. Investors are anticipating a briefing on China's property market. Luxury powerhouse LVMH reports disappointing results, attributing it to sluggish spending in China. The dollar remains close to a two-month peak due to cautious expectations of interest rate cuts.

 

Global Markets Roundup: 16 October 2024


FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!


Asian stock markets saw a decline on Wednesday due to disappointing earnings reported by ASML, Europe's leading tech company, which had a negative impact on chip stocks worldwide. In addition, the anticipation of a slight rate cut by the Federal Reserve helped bolster the strength of the dollar. The market was further influenced by lackluster earnings from LVMH, the French luxury conglomerate, signaling a decrease in Chinese demand for luxury items, tempering some of the optimism related to China's stimulus efforts. South Korean tech stocks, as represented by KOSPI, fell by 0.6%, while chip stocks caused a 1.8% drop in Japan's Nikkei. Taiwan's TWSE:TAIEX also experienced a decline of 1.2%. Consequently, MSCI's broadest index of Asia-Pacific shares, excluding Japan (.MIAPJ0000PUS), was down by 0.32%. FESX1! | Z1! | NI225 | NQ1! | ES1!


ASML, a Dutch company that manufactures chip equipment, forecasted sales for 2025 to be lower than expected. The company serves clients such as TSMC 2330, a top AI chip producer, along with Intel INTC, Samsung 005930, Micron MU, and SK Hynix 000660. Despite a rising demand for AI chips, ASML pointed out that specific areas of the semiconductor sector are facing persistent challenges, leading to caution among its customers. The CSI300 index, a blue-chip indicator, dropped by 0.6%, and Hong Kong's Hang Seng Index was down by 0.7% in early trading. Attention is now on Thursday's press conference in China, where discussions will revolve around fostering the "steady and healthy" growth of the property market. Investors continue to closely monitor U.S. interest rates and the changing expectations for rate cuts following recent data indicating the resilience of the U.S. economy and a slight uptick in inflation. FESX1! | Z1! | NI225 | NQ1! | ES1!


In the foreign exchange markets, the U.S. dollar index, known as DXY, which compares the U.S. currency against major competitors, was at 103.24, staying close to its highest levels since early August. The euro EURUSD, remained at two-month lows, trading at $1.0887 in early sessions before the European Central Bank's upcoming policy meeting on Thursday, where a rate cut is widely anticipated. The yen, in the form of USDJPY, held steady at 149.155 per dollar, showing a 3.6% decline in October due to the Bank of Japan's dovish stance impacting the currency. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD


In commodities, following significant declines in the previous session, oil prices remained stable as investors grappled with uncertainties surrounding tensions in the Middle East and their potential impact on global supply. Brent crude oil futures BRN1! increased by 0.4% to reach $74.56 per barrel, while U.S. West Texas Intermediate crude futures CL1! climbed by 0.5% to $70.93 per barrel. Gold was trading around $2,665 per ounce on Wednesday, maintaining the gains from the previous session as investors awaited further indications to evaluate the Federal Reserve's monetary policy stance. Gold saw a slight uptick on Tuesday following a modest easing of the US dollar and Treasury yields subsequent to weak manufacturing data. In soft commodities, the corn contract with the highest trading volume on the Chicago Board of Trade ZC1! increased by 0.3% to reach $4.02-1/2 per bushel, while CBOT soybeans ZS1! went up by 0.8% to $9.98-1/2 per bushel, and wheat ZW1! rose by 0.3% to $5.81-1/4 per bushel. December New York cocoa CC1! increased by 4.3% to reach $7,942 per ton. Meanwhile, December arabica coffee KC1! closed 5.35 cents lower, a decrease of 2%, at $2.567 per lb. November robusta coffee RC1! dropped by 1.2% to $4,909 per ton. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!


Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.



 

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

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