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S&P 500
The US market declined moderately on the first day of trading after a long weekend but remained near its annual highs. The US dollar gained in value significantly.
News on the EU economy. Airbus deliveries fell by 15% to 40 aircraft in August compared to July as the pandemic continues to have a negative impact on the industry. EU government agencies and businesses are trying to overcome a chip shortage. The EU is aiming at 20 percent of global microcircuit market share in ten years from now. Semiconductor manufacturer Intel is going to invest up to $95 billion in chip-making facilities in Europe.
Yesterday, European stocks slipped. Analysts attribute this to the ECB's monetary policy meeting to be held on September 9. However, the scenario which implies that the ECB will start tightening its policy earlier than the Fed is unlikely.
US indices closed mixed on Tuesday: the Dow Jones Industrial Average lost 0.8%, the NASDAQ Composite gained 0.1%, and S&P 500 fell by 0.3%.
Asian markets also traded mixed on Wednesday: Japanese indices added 0.8%, since GDP report turned out to be better than forecasted; China's indices declined by 0.7%
COVID in the world. The world posted an increase in new cases following a decline over the weekend as expected. The number of new infections advanced by 520 K globally. The US reported an increase of 107 K new cases.
S&P 500: 4,520. Trading range: 4,480-4,550.
The Wall Street Journal, one of the world's leading daily financial newspapers, posted a note on its homepage that in September, the US economy would face a slowdown. Experts attribute this to the Delta variant of the new coronavirus, which has caused a sharp slowdown in job growth and weak consumer spending as consumers are wary of new lockdowns. In such a situation, the Fed's upcoming Beige Book report to be released on Wednesday is of great importance to market participants.
USDX: 92.60. Trading range: 92.30–92.90. On Tuesday, ahead of the Fed meeting, the US dollar index advanced to 92.50 from 92.20. The euro is losing ground against the US dollar, but moderately. Investors are awaiting the ECB meeting. Following this event, its decline may well accelerate.
USD/CAD: 1.2650. Trading range: 1.2600-1.2730. Like the US dollar index, the US dollar/Canadian dollar pair turned around towards the upside. The low is 1.2490. Its downward movement is over. At the same time, oil prices seem to be rather stable. Brent crude is trading in a slight upward trend above the level of $72.
Conclusion. The US stock market may suffer huge losses in the coming days. The market is currently trading at highs, and a correction is long overdue.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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