Market Update: Dow Jones Ended in Red. Global Markets Remain Sensitive to Macro-Economic Factors

Global stock markets might witness negative impacts if the trade battle between the US and China does not end on a permanent basis and if the economic uncertainties increase. In the event of economic downturn, investors start making deployments towards safer assets and they tend to avoid equities. If the investors start selling their holdings in equities, the broader stock markets can witness negative impacts. The trade war could weigh over the global business environment, which increases the probability of the global slowdown. Additionally, the war could negatively impact the performance of global companies and, therefore, can adversely affect the top and bottom line numbers.

In the current scenario, comments of the US Federal Reserve are very critical. Also, the global market participants need to track the US Federal Reserve meet, as it could provide some insights on the health of the global economy. On August 20, 2019, Dow Jones Industrial Average ended the session in red and the index closed at 25,962.44, which reflects a fall of 173.35 points or 0.66% on an intraday basis. Also, on the same day, S&P 500 Index witnessed a decline of 23.14 points or 0.79% to end the session at 2900.51.

Movements in Stock Markets Could Affect Oil Prices

Demand for oil is sensitive to macro-economic parameters as well as to the health of the global economy. If the trade battle does not end on a permanent basis, it could be a serious concern for the global economy. If the demand for oil comes into question, the oil prices might also be influenced.

Australian Markets Ended in Red: S&P/ASX200 Falls By 1%

As the market players are aware, Australian markets are sensitive to the performance of the global markets. In the event of global economic slowdown, the Australian economy might also witness the impacts which could, in turn, affect the performance of broader equity markets in Australia. However, the settlement of trade battle might positively impact the Australian equities. On August 21, 2019, S&P/ASX200 ended the session in red, as the index witnessed a fall of 61.7 points or 1% on an intraday basis to settle at 6483.3. On the same day, All Ordinaries encountered a fall of 54.8 points or 0.8% on an intraday basis to close the day’s session at 6572.6.

Let us now have a quick look at how the stocks have performed on ASX. On August 21, 2019, McMillan Shakespeare Limited (ASX: MMS) encountered a significant rise of 17.822% on an intraday basis to end the session at A$15.470 per share and WiseTech Global Limited (ASX: WTC) closed the session by moving upward 11.047% on an intraday basis to end the session at A$30.760 per share. On the other hand, The A2 Milk Company Limited (ASX: A2M) and Iluka Resources Limited (ASX: ILU) ended the session in red by falling 13.188% and 10.557%, respectively.

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MMS Daily Technical Chart (Source: Thomson Reuters)


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