In stocks, the Dow Jones Industrial Average rose 0.14%, the S&P 500 rose 0.19%, and the Nasdaq Composite rose 0.47%. The biggest gainers and losers were closed-end funds, which gained 0.93%, and utilities stocks, which fell 0.74%. In the forex market, the greenback gained against the euro, pound sterling, and Japanese yen.
In commodities, precious metals sold off sharply as the US dollar strengthened. Gold and silver both shed 2.02% and 0.71%, respectively. Crude oil managed to hold its ground, falling only 0.17%. Agriculture was a bright spot, with corn prices rising 3.62% and wheat prices climbing 1.49%.
In the bond market, US Treasury yields dropped across the board. The 10-year note fell to 2.15% and the 30-year bond yield fell to 2.76%. The yield curve steepened throughout the day as investors sought more safety in the long-term debt market.
In international markets, European and Asian stocks got off to a rocky start on worries about macroeconomic policy, but finished mixed. The Eurozone’s Stoxx 600 settled 0.1% higher, while markets in China and Japan ended down 0.1% and 0.2%, respectively.
The overall impression of markets for the day on June 26th, 2017 was that risk-off sentiment prevailed. As mentioned earlier, stocks ended mixed and the US dollar continued to rally. Precious metals such as gold and silver both plummeted, indicating investor aversion to risk. In addition, the yield curve steepened as investors sought the safety of long-term debt. The only exception to the risk-off sentiment was agriculture, where corn and wheat prices rose significantly.
Overall, this week’s MIG Market Watch helps to paint a picture of a cautious market environment. Although equities ended relatively flat overall, the US dollar’s strength and the sell-off in precious metals reflect investor wariness. In addition, bond markets saw an influx of investor cash as they sought a safe haven from the turbulent stock market. Although there were some positive movers of the day such as agricultural prices, the majority of the sentiment was clearly risk-averse. As such, investors should be aware of the current market environment and adjust their strategies accordingly.
This article was contributed on Aug 20, 2023