Monday was the worst day for the US stock market all year. However, by the next day, Tuesday, it recovered at least 1.2% or more, especially with regard to the DJ30, SPX500 and NSDQ100.
On top of that, tech stocks saw a strong rally, with Apple and Microsoft increasing over 1.8%, and Facebook and Google increasing 1.5% or more. Conversely, Arlo Technologies Inc, a home security camera company, posted a 17.8% drop after admirable reports in the second quarter but negative forecasts in the third quarter.
Of course, this sharp drop is due in part to the ongoing trade war between the United States and China, with the latter doing what it can to stabilize its currency, the yuan, which it has strived for. to do after the US Treasury Department marked Beijing as a currency manipulator, Reuters reports. That’s because the country let its assets drop to more than a decade on Monday.
China fixes its currency
However, on Tuesday, the People’s Bank of China, the one that decides the value of the yuan, established a benchmark for the currency, standing at 6.9996, but is approaching 7 yuan to the US dollar. They set the price every day and have it at less than 2% of its US counterpart.
The Dow Jones Industrial Average saw an increase of 311.78 points, also known as 1.21%, to 26,029.52. From there, the S&P 500 gained 37.03 points, 1.30%, to 2,881.77. Finally, the Nasdaq Composite gained 107.23 points, in other words 1.39%, reaching 7,833.27 points.
The latter two were steadily declining for six straight days before breaking the low. He joined a majority of stocks that fell sharply thanks to Donald Trump’s demand for a 10% tariff on imports from China, coming into effect in September.
Other stocks like Disney, however, fell 2.6%, while Take-Two Interactive Software Inc rose 8.0% after the publisher released its revenue forecast for the year. The former failed to meet its earnings expectations, leading to the abandonment of some investors, lowering the stock trading value. That said, the company attributes its losses to the recent acquisition of Fox in addition to investing in its Disney + streaming service which bundles ESPN + and ad-supported Hulu for around $ 12.99 per month. This service is released in November.
Crypto and the East stay down
Then, we have cryptocurrency trading prices, with assets like Bitcoin dropping 2.3% in 24 hours. On top of that, the other 10 assets in the top 10 also saw a decline. We’re not sure exactly why, but some believe it is a correlation with the stock market decline. That said, digital assets had seen a big leap the week before, so many investors invested their money in crypto during the traditional fall, and vice versa.
Despite actions on Wall Street, with high numbers, companies in the Eastern part of the world have lagged behind, with China50, JPN225 and HKG50 being the big dips as of this writing. In other forex news, the Reserve Bank of New Zealand announced a 0.5% rate cut, with the NZD falling 1% to its lowest level in ten months.
Conversely, stocks of dating apps like Match, which owns Tinder, have seen incredible gains, leading the company to an 18% share price increase.
Oil, which fell a bit harshly, also gained ground. Companies in that space recovered from some of its declines on Monday, correlating with tech markets.
Gold is a safe investment
Also due to the trade war we see gold trade prices go up, investors look to this safe, long-term asset instead of uncertainty. As you may know, gold hit its highest prices since April 2013, signaling a potential rise in interest from physical assets.
Then there is Shake Shack. The popular restaurant, which earns billions of dollars a year, reported above estimates in every category in this earnings report. It has seen an 18% increase, reaching a four-year high. Right now, the share of Shake Shack is up over 61%.
Aurora Cannabis is also on the rise, as the Canada-based company saw its stock jump 10% after its earnings report, saying good oversight is on the way to the company’s future. As for the eToro platform, it ranks Aurora in the CannabisCare CopyPortfolio category, which ensures that traders have no problem investing their money in the cannabis market and profiting from pot related stocks.
Health and office supplies remain high
CVS Health Corp, one of the largest drugstore chains in the United States, posted a 7.5% increase on Wednesday after figures much higher than expected. On a related note, Office Depot posted a 0.6% increase after positive earnings that also beat expectations.
European stocks are also up, with the UK100 advancing 10 points. Then the GER30 saw an increase of 50 points, with the FRA40 reaching 15 points.
Analysts speak on the stock market
Lindsey Bell, investment strategist at CFRA, talks about the situation at MarketWatch. There she said:
“I don’t think there is any headline or exact data that has flipped the markets, but I think investors are becoming more rational about the economic environment we find ourselves in. We have a very strong consumer. and things are on a solid footing. “
Then the chief market strategist at TD Ameritrade said those numbers could be attributed more simply – to the fact that it’s summer:
“A lightly traded market can exacerbate movement at times, and August trading tends to be light – it’s usually a sleepy month.”
“” Three other central banks cut rates. “Our problem is not China – We are stronger than ever, money is pouring into the United States while China is losing companies by the thousands to other countries, and their currencies are under siege – Our problem is a Federal Reserve too… proud to admit their mistake of acting too fast and tightening too much (and I was right!) They need to cut rates bigger and faster, and stop their ridiculous quantitative tightening NOW. yield curve is at too wide a margin and no inflation! ”
Overall, Chicago Fed Chairman Charles Evans is keen to change monetary policy accordingly until they see a decent economic boost. Speaking to reporters, he said that could mean a quarter point rate cut in 2019, MarketWatch reports.