This week, all eyes will be on the Fed rate decision and the release of second quarter GDP data in the US
US stocks fell on Friday, but finished the week in positive territory, with the Dow closing nearly 2% higher. The S&P 500 advanced 2.6%, and the Nasdaq gained 3.3%. For the session, the Dow lost 0.43%, the S&P 500 declined 0.93%, while the Nasdaq Composite traded 1.87% lower. Investors were spooked by quarterly results from Snap which sent the company’s stocks nearly 40% lower ahead of the weekend. The firm missed estimates even with the reduced guidance.
Similarly, Asian stocks were on the defensive on Monday, retreating from more than three-week highs amid persisting worries about a global economic downturn. MSCI’s broadest index of Asia-Pacific shares lost around 0.5%. The Shanghai Composite slipped 0.60%, the Hang Seng index in Hong Kong fell 0.38%, the Nikkei 225 in Japan declined 0.77%. This week, all eyes will be on the Fed rate decision and the release of second quarter GDP data in the US. Expectations for a 75-basis point move in July stood above 75%.
In Europe, equities fell slightly on Monday as investors get more cautious ahead of the Fed meeting. The pan-European Stoxx 600 slipped 0.4% in early deals, with oil and gas stocks leading losses. U.S. stock index futures were marginally lower in early premarket trade, suggesting risky assets could stay on the defensive in the short term. On the data front, Philips shares plunged more than 10% after the Dutch company missed second-quarter earnings expectations and cut its full-year profit outlook.
In currencies, the USD index struggled for direction around 106.70, struggling to regain the 107.00 mark despite the dominating risk-off tone in the global financial markets. The greenback lacks the momentum to stage a bounce after a bearish week that took the prices off the 108.00 figure. Should the Fed deliver a less hawkish rate hike this week, the US currency may suffer even deeper losses within a broader uptrend that remains intact.