Stocks were mixed Tuesday, with the Dow closing at record highs, as trade tensions eased and after Italy quarreled with the European Union over its budget. Facebook weighed on the tech-heavy Nasdaq, days after the social-media giant announced a major security breach. The dollar jumped against a basket of peers, and Treasury yields fell.
Here’s the scoreboard:
- Dow: 26,773.94 +122.73 (+0.46%)
- S&P 500 2,923.43 -1.16 (-0.04%)
- AUD/USD 0.7187 -0.0036 (-0.50%)
- ASX200 SPI Futures (Dec Contract): 6,128 (+11)
- Italy’s budget continues to rattle European markets. Reuters reports the new populist government coalition threatened to sue EU officials who it blamed for the sell-off in its financial markets. The country has been clashing with eurozone partners after refusing to modify its ambitious spending plans, which include a budget-deficit target of 2.4%. Claudio Borghi, economics spokesman for the Italy’s ruling League party, said that most of Italy’s problems could be solved by having its own currency.
- That sent Italian benchmark 10-year bond yields to the highest level in over four years. The spread between Italian and German 10-year bond yields also widened to the highest level in five years, reflecting capital flows away from Italian debt to German bunds. The euro was also smoked, falling over 0.5% at one point before recovering ground later in the session.
- Stocks across Europe and North America also slipped on the news, although the Dow managed to buck the trend, closing at the highest level on record. Gains were led by the industrial, telecoms and consumer staples sectors.
- Tesla topped expectations for Model 3 deliveries in the third quarter.With 55,840 Model 3 sedans, the electric-car maker beat both its guidance and analyst expectations. Total vehicle deliveries also came in higher than expected at 83,500. Shares of the company fell more than 3% following the announcement.
- More signs of US wage growth? Amazon announced it will raise its minimum wage to $US15 an hour beginning in November.The move follows months of criticism over its treatment of workers. In a statement, chief executive Jeff Bezos said the company had listened to its critics.
- “Remarkably positive”. US Federal Reserve Chairman Jerome Powell said the US economy has a “remarkably positive outlook”. He said the economy is on the verge of a “historically rare” era of both very low unemployment and inflation. “This forecast is not too good to be true,” he said, but “testament to the fact that we remain in extraordinary times.”
And a look at the upcoming economic calendar:
- Australian building approvals and Performance of Services Index
- Services PMI reports from Europe, the UK, US
- Eurozone retail sales
- Speeches from Powell, Mester, Brainard and Barkin of the US Fed
- EIA US weekly crude oil inventories
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