- S&P 500 Futures snaps five-day winning streak while taking a U-turn from the all-time high of 3,483.38.
- Fresh fuel to US-China tussle joins cautious sentiment ahead of the Fed Chair Powell’s testimony in the Jackson Hole Symposium.
- Calls of breaking US stimulus deadlock gain less attention ahead of the key event.
S&P 500 Futures drop to 3,476, down 0.10% on a day, amid the initial hour of Tokyo trading on Thursday. The risk barometer surged to the record high the previous day but the latest risk reset snaps a five-day winning streak, not to forget the longest run-up of 2020.
The hopes concerning Sino-American trade deal and stabilization in the coronavirus (COVID-19) cases from the US, Australia, China and Japan seem to have previously propelled the market sentiment. Also helping the tone could be upbeat data from the US and expectations that further stimulus is ready whenever needed.
On the contrary, the recent allegations that the World Health Organization (WHO) is biased in investigating China’s role in the COVID-19 outbreak rekindle the fear of the US-China tussle. The mood also gets tensed after Beijing fired missiles during the South China Sea’s military drill and Washington shows readiness to sanction companies helping the dragon. Furthermore, the CNBC’s news that the Republicans are readying a proposal to break the deadlock over the virus relief package got a little response as it was already anticipated and less likely to lesser the difference among the key American political parties.
Amid all these catalysts, Japan’s Nikkei 225 drops 0.12% with Australia’s ASX 200 rising 0.50%. Further, the US 10-year Treasury yields ease to 0.68% after probing 0.70% the previous day.
Looking forward, traders will keep eyes on Fed Chair Powell’s remarks at the Jackson Hole Symposium. While the central banker is likely to convey growth prospects with Average Inflation Targeting (AIT), any disappointment will weigh on the equities bitterly. Other than the speech from Wyoming, the preliminary readings of the US second quarter (Q2) GDP, forecast -32.5% versus -32.9%, also becomes the key to watch.
Share
