✅ Daily Market Analysis - FRIDAY SEPTEMBER 08, 2023

8 сент. 2023 г.

Key events:

Japan - GDP (QoQ) (Q2)
Canada - Employment Change (Aug)
Canada - Unemployment Rate (Aug)

On Thursday, the global stock markets faced widespread declines, with notable losses observed in the S&P 500 and Nasdaq indices. These drops were primarily attributed to the performance of Apple (NASDAQ: AAPL). Simultaneously, the US dollar strengthened following the release of US jobless claims data that fell short of expectations.

Remarkably, initial claims for state unemployment benefits decreased to 216,000 in the week ending on September 2nd, a drop from the revised figure of 229,000 from the previous week. These numbers marked the lowest weekly claims since February.

Furthermore, a separate report indicated that US worker productivity in the second quarter did not display the vigor initially reported.

Consistently, recent data bolsters the notion that the US economy continues to demonstrate resilience, potentially leading to an extended period of elevated US interest rates.

In a surprising turn of events, Apple witnessed a staggering loss of approximately $200 billion in market capitalization over a mere two days. This substantial decline was attributed to reports suggesting that China is imposing restrictions on the use of iPhones by state employees.


Apple stock daily chart

This setback had a cascading effect on the broader US technology sector, leading to a decline in its overall performance. At the same time, shares of numerous significant Apple suppliers located in Asia also witnessed declines during Friday's trading. It's worth noting that China represents a substantial market for Apple, accounting for nearly a fifth of the company's total revenue. Additionally, both Apple and its suppliers play a crucial role in providing employment to thousands of workers in the region.

This development comes just ahead of a highly anticipated Apple event scheduled for next week. During this event, the tech giant, valued at an impressive $2.78 trillion, is expected to unveil its new iPhone 15 lineup alongside innovative smartwatches.

In the broader market, the Dow Jones Industrial Average managed a modest gain of 57.54 points, equivalent to a 0.17% increase, reaching a level of 34,500.73. Conversely, the S&P 500 experienced a decline of 14.34 points, representing a 0.32% decrease, settling at 4,451.14. Meanwhile, the Nasdaq Composite registered a more substantial drop of 123.64 points, equivalent to a 0.89% decrease, concluding the day at 13,748.83.


NASDAQ Index daily chart


S&P500 Index daily chart


DJI Index daily chart

In addition to tracking market dynamics, investors also paid close attention to remarks from Federal Reserve Bank of New York President John Williams. He raised an intriguing question about whether monetary policy has reached a juncture where it could be considered adequately restrictive to bring about economic equilibrium.

A recent Reuters poll of forex strategists underlines that the strength of the dollar is expected to pose challenges for most major currencies as the year nears its end. The enduring appeal of the US currency has indeed presented hurdles for other currencies in the global marketplace.


US Dollar Currency Index daily chart

Throughout this week, the euro has witnessed a 0.5% decrease and has held steady at $1.0715 during the Asian trading session. Investors are presently evaluating the likelihood that the European Central Bank will opt for a status quo approach rather than moving forward with an interest rate hike in the upcoming week.


EUR/USD daily chart

On another front, the Japanese yen has descended to fresh lows, levels not witnessed in a span of ten months, with its current trading rate at 147.19 yen per dollar. The currency is inching ever closer to the critical 150 mark, a threshold where traders believe there's a substantial likelihood of government intervention to offer support and restore stability to the currency.


USD/JPY H12 chart