The focus is on the Federal Reserve meeting, where further monetary policy plans will be announced

US stock markets closed in the red zone yesterday. The biggest drop was in the Nasdaq technology index, which fell by 1.21%, while the fall at that moment was about 1,400 points (-2.3%). The Dow Jones index was more stable and decreased by 0.24%. The S&P 500 Index lost 0.47%.

Shares of United Parcel Service decreased by 7%, while the world's largest express delivery service increased its net income by more than 50% in the 2nd quarter. JetBlue Airways shares fell by 6.9%, while net income increased 7 times in the 2nd quarter. After the market closed, Alphabet, Apple, and Microsoft reported their quarterly results. Shares of all three companies decreased by 0.9-1.6% before the reports were released, but the reaction to the reports was different. Alphabet increased and closed above its opening price. Microsoft increased to its opening point for the day. Apple fell even lower, losing more than 3% on the day.

Amid a global shortage of semiconductor products, almost all of the major manufacturers are beginning to expand their businesses. Intel Corp. said its factories would start producing Qualcomm chips and outlined the development plan for the new foundry business, which should help by 2025 to catch up with such competitors as Taiwan Semiconductor and Samsung Electronics.

The focus today is on the Federal Reserve meeting, where further monetary policy plans will be announced. Any signs of a cutting of the QE program may send markets into a deep correction.

European stock indices also closed lower. The Stoxx Europe 600 index decreased by 0.54%, and the British FTSE 100 index decreased by 0.42%, German DAX dropped by 0.64%. The pressure on the European market is given by the concerns of the possible new restrictions due to the growth of the Delta strain and the slowdown of the economic recovery in the region.

The situation in the oil market remains the same. Oil prices have stabilized and are trading around $71-72 per barrel of WTI. On the one hand, oil markets remain in deficit on the back of increased demand over the summer, which is also supported by the growing pace of vaccination. On the other hand, OPEC+ countries are gradually increasing oil production, and supply is beginning to meet demand gradually. Crude oil inventory data will be released today. Analysts are expected to reduce fuel reserves.

Panic sell-offs hit China's stock market and Chinese companies listed in the US. According to the results of the last three trading sessions, shares of Chinese companies quoted in the USA showed the strongest fall since 2008. Investors are rushing to get rid of many companies as China's broader regulatory restrictions target many technology companies as well as out-of-school education companies. Hong Kong's Hang Seng Index decreased by 4.4%, and its technology index fell by 6.7% to its lowest level in more than a year. Shanghai Shenzhen CSI 300 index decreased by 3.5%, to its lowest level since October. Meanwhile, the "national team," which usually intervenes to stabilize market volatility, was unresponsive this time. Australia's consumer price index increased by 0.2% (to 0.8%), compared to the previous quarter. Annual inflation rate increased to 3.8% in the second quarter, which is much higher than the Reserve Bank of Australia's (RBA) target. The Australian ASX 200 Index decreased by 0.55% on the news.

Main market quotes:

S&P 500 (F) 4,401.46 -20.84 (-0.47%)

Dow Jones 35,058.52 -85.79 (-0.24%)

DAX 15,519.13 -99.85 (-0.64%)

FTSE 100 6,996.08 -29.35 (-0.42%)

USD Index 92.46 -0.19 (-0.20%)

• – Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Statement at 21:00 (GMT+3);
• – US Fed Interest Rate Decision at 21:00 (GMT+3);
• – US FOMC Press Conference at 21:30 (GMT+3).

by JMarkets, 2021.07.28

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.