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Apple Product Announcement Event Drives Today's Price Action


Today's financial recap and tomorrow's financial outlook.

The recent rally in the US dollar created increased anxiety amongst investors today as it was cited as a key catalyst behind the selloff in US stock markets. Over the last eight weeks, the US dollar has risen 5.84% against its major peers. The S&P 500 (SPX) ended up closing down 0.65% after trading at the same value for the fourteenth consecutive day with all of its 10 basic sectors down for the session. The benchmark index broke and closed below its range from the past 10 days. The price action following the Apple (AAPL) product announcement was a major driver today as the stock is the largest component of both the S&P 500 and Nasdaq-100 (NDX) indices.

The US dollar left a bearish technical bar and saw gold and gold miners turn higher. The EURUSD turned higher in the afternoon following news reports that the EU was encouraging the US to enter into a trade agreement on energy that would allow natural gas and oil to be exported to Europe given the hostile geopolitical environment. Natural gas closed up 3.10%.

Early this morning, Bank of England (BoE) Governor Mark Carney gave a speech to the Trades Union Congress and stated that the market's expectations for a spring 2015 rate hike were consistent with the central bank's forecasts to achieve its 2% inflation goal. The most acute reaction was in English interest rates, which rose as much as 5bps in early trading. The GBPUSD only moved modestly, suggesting that market participants are more focused on the outcome of the Scottish referendum vote - or "Scoxit" - next week.

At Apple's highly-anticipated press event today It introduced two new large-screen iPhone 6 models, a new payment system called Apple Pay, and a digital Apple Watch. The stock screamed higher during the event, going as high as $103.08, but finished at $97.99, 0.38% for the day.

GT Advanced Technologies (GTAT), which supplies sapphire to Apple, saw a significant sell-the-news reaction, trading 12.89% lower.

Tomorrow's Financial Outlook

There are no major economic report scheduled tomorrow. The July wholesale inventories will be reported in the late morning, which play a significant role in determining third quarter GDP. In the last quarter, inventories contributed a 1.39% gain to overall growth. The Treasury will re-open $21 billion of 10-year notes.

There is also no major economic reports scheduled tomorrow for the rest of the world, only a consumer confidence report for Australia. BOE Governor Carney and other Monetary Policy Committee (MPC) members are scheduled to give a speech at 2:45pm BST to the Treasury Select Committee in London.

Earnings are scheduled to be reported from Five Below (FIVE), Men's Wearhouse (MW), and Radioshack (RSH).

Twitter: @Minyanville

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No positions in stocks mentioned.

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