US stocks wiped out earlier losses and finished higher on Friday, helped by a rise in tech giants including Amazon, Apple, and Facebook after posting strong quarterly results. Apple said its overall sales expanded by 11%, lifting the company’s shares to a new all-time high. On the data front, the University of Michigan’s consumer sentiment index came in at 72.5 for July, down from June’s 78.1. as a result, the Dow Jones Industrial Average rose 0.4%, the S&P 500 climbed 0.7%, while the Nasdaq Composite gained 1.4%.
Asian stocks were mixed on Monday, with MSCI’s broadest index of Asia-Pacific shares outside Japan dipping 0.2%. U.S. lawmakers struggled to hammer out a new stimulus plan, which added to market uncertainty at the start of a new trading week. Furthermore, Fitch Ratings cut the outlook on the United States’ triple-A rating to negative from stable, citing eroding credit strength and a ballooning deficit. Meanwhile, a survey showed China’s factory activity expanded at the fastest pace in nearly a decade in July, with the Caixin/Markit PMI at 52.8.
In Europe, stocks opened cautiously higher but turned mixed afterwards. July’s final IHS Markit manufacturing PMI reading showed manufacturing activity in the Eurozone expanded for the first time since early 2019. As for earnings season, Societe Generale posted a surprise net loss of 1.26 billion euros for the second quarter, sending the lender’s shares 2.8% lower. Meanwhile, HSBC reported a 65% year-over-year plunge in pretax profits for the first six months of 2020.
Elsewhere, the dollar struggles to extend the recovery after a spectacular rally witnessed on Friday amid a massive liquidation in short positions. EURUSD failed to break the 1.19 barrier late last week and proceeded to a bearish correction. However, as the euro continues to hold above the 1.17 handle, downside risks look limited while the overall bullish trend remains intact. Upbeat European PMIs helped to ease the downside pressure surrounding the common currency. In the short term, the pair could resume the ascent should the dollar come back under the selling pressure.