“Dow Tops 22,000 as Apple Rallies; Euro Strengthens: Markets Wrap.”
The Dow Jones Industrial Average rose past 22,000 for the first time as Apple Inc. pushed to a record, while renewed strength in the euro dragged down European equities. Oil fluctuated after retreating from its brief rise above $50 a barrel.
The Nasdaq 100 Index jumped as Apple’s market cap rose above $800 billion after its sales forecast revived optimism over the iPhone. Rio Tinto Plc led the drop among basic resources shares after first-half profit missed estimates. The euro, coming off its best month since March 2016, reached a new 2 1/2-year high against the ailing dollar. Oil traded near $49 a barrel as U.S. crude stockpiles expanded, while copper dropped a second day.
The common currency’s longest rally since 2013 has been sustained by interest-rate differentials and broad dollar weakness as investors lost faith in Donald Trump’s spending plans amid an administration in disarray. With the dollar index near a two-year low, the options market shows that traders are gearing up for more euro strength, with demand growing for calls, which give the right to buy. The currency’s advance has pushed European earnings revisions into negative territory, according to Credit Suisse Group AG.
New York Times
“U.S. Tests Unarmed Intercontinental Ballistic Missile”
The Pentagon conducted a test of an unarmed intercontinental ballistic missile on Wednesday, with the timing expected to be of note in both North Korea, which recently tested its missile arsenal, and in China, which has been urged by the Trump administration to pressure North Korea on its nuclear program. The test came a day after Secretary of State Rex W. Tillerson said that the United States was not seeking a regime change in North Korea and would be willing to talk to Pyongyang.
American intelligence agencies recently said that North Korea was developing a missile that could reach the interior of the United States in about a year.
“While not a response to recent North Korean actions, the test demonstrates that the United States’ nuclear enterprise is safe, secure, effective and ready to be able to deter, detect and defend against attacks on the United States and its allies,” said an official statement from the Air Force Global Strike Command released early Wednesday after the test was completed.
“Eurozone economic growth gathering pace.”
The eurozone notched up growth of 0.6% in the second quarter of the year, official Eurostat figures showed. The figure puts annual growth in the 19-country bloc at 2.1% since a year ago. First-quarter growth was revised down slightly from 0.6% to 0.5%.
Other figures released on Monday showed unemployment in the zone was at its lowest since 2009, building on the picture of improving economic health across the area.
On Friday, figures showed Spain’s economy, one of the worst-hit by the financial crisis, grew by 0.9% in the second quarter, suggesting the country’s economy had finally grown back to the size it was before 2008.
The International Monetary Fund last week said the outlook for several eurozone economies was brighter than initially thought, with countries including France, Germany, Italy and Spain seeing growth forecasts revised up.
The European Central Bank is planning to tighten up monetary policy after years of pumping up activity through low interest rates and bond-buying. It intends to begin the process in the autumn, although inflation remains low at 1.3%, well under the 2% target for the eurozone.
“Emerging markets – Emerging stocks at near 3-year highs, Venezuelan bonds fall”
Emerging market stocks flirted with near three-year highs on Wednesday but Venezuelan bonds sold off further as polling data cast doubt on a weekend election and opposition leaders were jailed, raising the risk of fresh U.S. sanctions. MSCI’s benchmark emerging markets stocks index rose 0.2 percent to just below a near three-year high hit at end-July, helped by Asian tech stocks hitting 17-year peaks. But Chinese mainland shares slipped 0.2 percent after U.S. President Donald Trump was said to be close to a decision on how to respond to what he considers China’s unfair trade practices.
In debt markets Venezuelan state oil firm PDVSA bonds fell to 16-month lows, with the 2037 bond dipping below 30 cents in the dollar. Venezuelan sovereign bonds also sold off across the curve as investors eyed the ongoing crisis triggered by the creation of a controversial legislative body, which has prompted the United States to slap sanctions on President Nicolas Maduro.