Global stock markets retreat, luxury goods lead the decline in European stocks, the US dollar edges lower, while the bond market remains resilient.
After the US stock market rose last week, stock index futures fell before Monday's opening. Luxury goods and commodity stocks declined, leading to the first decline in European stocks in seven days. Most European and American bonds rose, while the US dollar index edged lower.
On Monday, global stock markets experienced an overall pullback.
After a rise in the US stock market last week, stock index futures declined on Monday as investors awaited the quarterly earnings reports from industry giants this week.
Dow Jones futures fell by 0.21%, S&P 500 futures fell by 0.10%, and Nasdaq futures fell by 0.01%.
In pre-market trading, Tesla's stock price rose by 1.3%. The company had previously announced that the first Tesla vehicle had officially rolled off the production line after a two-year delay.
Tesla is set to release its second-quarter earnings report on Wednesday. Bank of America, Morgan Stanley, Goldman Sachs, and Netflix will also be releasing their earnings reports.
Luxury goods and commodities stocks declined, leading to the first seven-day decline in European stock markets. The Euro Stoxx 50 index dropped by over 1%.
Resource giants Anglo American, Glencore, and Rio Tinto saw their stock prices fall. In the luxury goods sector, LVMH and Hermès experienced a decline in stock prices. After LVMH announced an unexpected drop in sales in the Americas, LVMH's stock price fell by 9%.
Over the next few weeks, hundreds of companies will be releasing their earnings reports, providing crucial direction for the market.
According to data compiled by Bloomberg, S&P 500 index component companies are expected to see a 9% decline in second-quarter profits, making it the worst quarter since 2020. In Europe, the situation may be even worse, with an expected decline of 12%.
Most Asian stock markets closed lower on Monday.
The Shanghai Composite Index fell by 0.87%, the KOSPI Index in South Korea fell by 0.35%, and the Australian S&P/ASX 200 fell by 0.06%. The Japanese stock market was closed for a holiday, and the Hong Kong stock market was closed for the entire day due to a typhoon.
Rise in European and US Bonds
Most US Treasury bonds rose, with medium-term bonds leading the way, as the money market lowered expectations of a Fed rate hike and increased bets on loose monetary policy.
The yield on the 10-year US Treasury bond fell by 3 basis points to 3.78%.
A 1 basis point move is expected to result in a tightening of 32 basis points by November.
The yield on the 10-year German government bond fell by 5 basis points to 2.43%.
US Dollar Index Falls
The US Dollar Index ended its five-day decline last Friday, currently down 0.1%.
Due to suggestions from some strategists and investors that the long-term bull market of the US dollar has come to an end, the index has fallen to levels close to April 2022.
The USD/JPY fell 0.37% to 138.28. The yen slightly strengthened after Bank of Japan Governor Haruhiko Kuroda expressed high uncertainty in the US and global economy.
