The dollar lacks the upside momentum to stage a more decisive bounce
Wall Street stocks were mixed on Thursday after a solid rally earlier the week triggered by an unexpectedly weak US inflation report. The Dow Jones dropped about 0.1% while the Nasdaq Composite added less than 0.1% and the benchmark S&P 500 gained 0.12%. In individual stocks, shares of Walmart fell 8% even as the company reported quarterly earnings that topped estimates. Investors were disappointed by the fact that Walmart raised its annual outlook by less than expected. Since the start of this month, the S&P 500 is up more than 7%, while the Dow has advanced 5.7% and the Nasdaq is up 9.8%.
In Asia, most equities fell on Friday, with the MSCI’s broadest index of Asia-Pacific shares outside Japan giving up nearly 0.7% after hitting two-month highs during the previous session. Still, the index is up 2.7% for the week. Chinese technology stocks saw solid losses after Alibaba highlighted the impact of recent US chip export curbs. The company’s stocks fell to a one-year low during the session. Also, weak US jobless claims data added to signs of more cooling in the US economy. Hong Kong’s Hang Seng index was the worst performer, down 1.6%.
In currencies, the US dollar holds steady above the 104.00 handle that capped the downside pressure during the recent sell-off. The greenback has been retaining a mild bullish bias for the third session in a row on Friday, but still lacks the upside momentum to stage a more decisive bounce as traders continue to digest weak US CPI and PPI data revealed this week. The USD index has settled in the 104.50 area that represents the immediate barrier at this stage. A failure to overcome this hurdle in the near term could trigger a local retreat ahead of the weekend.
In other markets, oil prices fell to four-month lows on Thursday to shed around 5% during the session amid persisting worries about global demand after weak data from the US and Asia. After peaking around $84 a barrel earlier in the week, Brent crude plunged to $76.60 for the first time since early July before bouncing marginally. On Friday, oil futures have settled around $77.50, staying depressed even as the selling pressure has eased. A failure to retarget the $80 handle in the coming days could trigger another slide, especially as risk sentiment deteriorated in the global financial markets.