Major stock market indices in the United States closed mixed on Tuesday, after the latest report on factory orders in the country showed a -2.1% m/m decline in July, the biggest drop in 8 months but stronger than expectations of a -2.5% m/m decline.
Markets were broadly weaker on Tuesday, as weaker-than-expected economic news from China and the Eurozone fuelled risk-off sentiment in asset markets. China’s services sector experienced its slowest pace of growth this year in August, and the August Eurozone S&P composite PMI was revised down to its weakest level in 2 years. In addition, higher global bond yields also weighed on stocks.
The 10-year T-note yield rose to a 1-week high of 4.27% and settled at 4.26%. The 10-year Bund rose to a 1-week high of 2.61% and settled at 2.61%. The 10-year UK gilt rose to a 1-week high of 4.53% and settled at 4.52%. With rising US yields and weaker economic data from China and Europe, USD had another strong session. The USDIndex on Tuesday rose +0.54% and recorded a 5-month high. Tuesday’s stock weakness increased liquidity demand for the US Dollar.
The USA30 fell -0.56% as Walgreens Boots Alliance Inc. slumped 2.99%. The USA500 fell -0.42%, with Penn Entertainment Inc. plunging 6.70%. On the other hand, the USA100 rose 0.11% as Airbnb Inc. rocketed +7.23% and there was a +4.7% gain in Tesla. Airbnb included its company in the US500 Stock Index earlier this month and Tesla rallied after its vehicle deliveries to China in August increased by more than +30% m/m. The China Passenger Car Association (CPCA) announced the company’s electric vehicle (EV) sales in the country saw a monthly increase from 64,285 in July to 84,159 in August. Meanwhile, data analyst firm Kantar published a list of the most valuable automotive brands in 2023, topped by Tesla.
Shares of #Tesla bounced off the 52-day & 200-day exponential moving averages with a 4.7% gain to $256.74. Shares of #Tesla plunged -5.1% on Friday after Tesla launched Model 3 upgrades in China but also cut prices of Model S, Model X and Full Self-Driving. Last week’s high was at $261.13, a break above this level could move higher to test the $300.00 psychological price. On the downside, the low formed from the southern doji at $212.26 is a structural support level that investors will take into account. RSI is above the expansion line and MACD is thinning at the zero line.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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