Stock Markets Rebound, Tech Stocks Outperform

After already a strong performance of the euro compared to the dollar towards the end of last week, the EUR/USD continued on its upside momentum to breach the 1.09-level threshold by Monday morning and reach a new nine months high. While the weak dollar did have an impact on this move, the common European currency itself was also performing very strongly. Last week on Friday some other majors like the Canadian dollar (CAD) and the New Zealand dollar (NZD) outperformed the euro, though by Monday the euro was clearly the single best-performing major currency in the markets.

Intraday gold prices reached a new high since April on Friday, though by the end of the day the precious metal settled moderately lower. The downside move continued on Monday, despite the dollar’s weak performance against other majors. At the same time however, rates like the 10-year U.S. T-Note benchmark reversed from the recent low around 3.325% on Thursday and was trading by Monday just below 3.5%.

Silver prices on the other hand managed to make small gains on Friday only to be affected even more by the retracement on Monday and declining by around 0.7% towards the morning hours.

Oil prices closed on Friday up for the second day in a row. After a dip just around the time the U.S. trading session started, prices rapidly recovered just the sentiment in equity markets also became bullish.

The U.S. Baker Hughes Oil Rig Count declined by 10 to a level of 613, according to data published on Friday. This is the biggest weekly decline in activity on this metric since September 2021. After a prolonged recovery following the early phase of the pandemic production levels steadily increased until plateauing around three months ago with the oil rig count remaining since then in the range of 610 to 627.

This week the Weekly Statistical Bulletin by the American Petroleum Institute (API) will be released as usual on a Tuesday, while on Wednesday the Weekly Petroleum Status Report from the Energy Information Administration (EIA) can be expected. Both reports contain data on crude oil, gasoline and distillate inventories in the U.S.

After trading steadily lower throughout the week, the sentiment rapidly reversed on Friday with the US 500 index moving up by almost 1.8%. The scope of the recovery differed significantly among the different market indices. For the US 30 index for example the recovery was not enough to even make up for close to half of the week’s losses, while the US Tech 100 index even managed to close the week in the green after gaining 2.4% on Friday.

In this positive sentiment Goldman Sachs (-2.57%) was the single worst-performing component of the S&P 500 index. After already underperforming following disappointing earnings earlier that week, the investment bank’s stock value came further under pressure after a report from the WSJ, that the Federal Reserve was investigating the company for its ‘Marcus’ consumer banking division.

Chip sector stocks (US Semiconductors ETF +3.02%) performed very strongly with Nvidia (+6.20%) closing at its highest level in more than a month and other stocks like Micron (+3.57%) and Qualcomm (+4.42%) also outperforming the market average.

This week even more earnings can be expected including from companies like Halliburton, General Electric, Verizon, Lockheed Martin and others publishing their respective results on Tuesday, while on Wednesday US Bancorp, Tesla, IBM, and Crown Castle are releasing their numbers.