US Stock Market Overview – Stocks Rebound into Close Despite Volatile Trading Session

Asian central banks ease more than expected
David Becker

US stocks were hammered at the open tumbling on news that central banks around the globe had moved to help buoy growth and inflation. Stocks rallied into the close and settled mixed, with the S&P 500 and the Nasdaq closing in the black and the Dow bucking the trend. US yields also tumbled with the 10-year yield dropping to a low of 1.60% and the 2-year yield declining to 1.54%. Gold prices surged higher helping to buoy metal and mining shares, while crude oil prices were hammered as inventories in the US grew by more than expected walloping crude oil prices. Disney reported financial results that missed the street’s expectations.

Central Banks Ease Sending Fear through the Capital Markets

Central banks in India, New Zealand and Thailand moved aggressively to support growth and inflation, all cutting interest rates by more than expected. Those moves raised concerns about the extent of the potential spillover from the trade conflicts. Reserve Bank of New Zealand surprised markets with a 50 basis point rate cut to 1.0%.  Consensus saw a 25 basis point cut. Reserve Bank of India surprised markets with a 35 basis point cut to 5.4%.  Consensus saw a 25 basis point cut. Bank of Thailand surprised markets with a 25 basis point cut to 1.5%.  Consensus saw steady rates

Disney Missed Due to Fox

For the quarter ending June 29, Disney was marred by the weak performance from Fox entertainment assets that were purchased in the $71.3 billion deal that closed in March. Disney’s financial results fell short of analysts’ expectations for the quarter, sending shares down more than 7% at the lows of the trading session. Profit in the company’s fiscal third quarter declined 40% to $1.76 billion, or 97 cents a share. Excluding charges related to the integration of the Fox properties and other items, profit fell to $1.35 a share from $1.87 a share. Revenue was $20.25 billion. Analysts had projected $1.46 a share, or $1.72 a share as adjusted, on $21.45 billion in revenue.

Energy Shares Drop as Oil Tumbles

Crude oil prices tumbled on Wednesday in the wake of the Department of Energy’s inventory report. The decline in crude oil prices hammered energy shares. According to the EIA, US crude oil inventories increased by 2.4 million barrels from the previous week. Expectations were for a draw. Gasoline inventories increased by 4.4 million barrels last week and are about 4% above the five year average for this time of year. Distillate fuel inventories increased by 1.5 million barrels last week and are about 1% below the five year average for this time of year. Total petroleum inventories increased last week by 10.4 million barrels last week, much more than expected. Total demand over the last four-week period averaged 21.2 million barrels per day, up by 0.2% from the same period last year. Gasoline demand averaged 9.5 million barrels per day, down by 1.8% from the same period last year.

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