US stocks, gold extend recovery
<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></strong></p>
<ul>
<li>SPX500_m returns above 4,400</li>
<li>Big Tech rebound helps S&P 500 pare biggest weekly drop since March</li>
<li>Gold resurfaces above $1900 after hitting 5-month low</li>
<li>Higher Treasury yields should be headwind for stocks, gold</li>
<li>Look out for Nvidia earnings, Powell’s speech this week</li>
</ul>
<p> </p>
<p>US stock futures are building on Monday’s gains, after a strong rebound in technology stocks.</p>
<blockquote><p><em>The <strong>SPX500_m has broken past the psychologically-important 4,400 mark</strong>, making an about-turn after halting a four-day drop.</em></p></blockquote>
<p><img decoding="async" fetchpriority="high" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user16/SPX500_mDaily_3.png" alt="" width="1024" height="768" data-entity-type="file" data-entity-uuid="7c5868dd-c40b-4578-9b5a-1899f9a2c805" data-src="/s3-static/users/user16/SPX500_mDaily_3.png" /></p>
<blockquote><p><em>This rebound comes after <strong>global stocks </strong>had their <strong>biggest weekly drop since March </strong>last week.</em></p></blockquote>
<p>The “magnificent seven” of megacap tech stocks – Alphabet, Amazon, Apple Meta, Microsoft, Nvidia and Tesla – lost more than $900 billion in value over three consecutive weeks of falls. That was their worst run of combined market cap decline this year.</p>
<p>But yesterday saw Tesla jump over 7% while Nvidia rose 8.5% ahead of its results after the closing bell on Wednesday which will be a key focus.</p>
<p> </p>
<h3><strong>Oversold gold finds a bid</strong></h3>
<p>Gold dipped $1885 to post a five-month low yesterday which came after four straight weeks of losses, something not seen since February.</p>
<blockquote><p><em>Rampant Treasury yields are not a good sign for bullion as it is a non-interest-bearing asset.</em></p></blockquote>
<p>Indeed, the 10-year “real” yield has hit 2% for the first time since March 2009. However, prices have been oversold on momentum indicators and buyers have stepped in recently as we are now seeing a third day of gains this morning.</p>
<blockquote><p><em>The yellow metal still currently trades <strong>below the 200-day simple moving average (SMA), </strong>though has <strong>resurfaced </strong>above the psychologically-important <strong>$1900</strong> level for the time being.</em></p></blockquote>
<p> </p>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user16/XAUUSDDaily_17.png" alt="" width="1024" height="768" data-entity-type="file" data-entity-uuid="8573ee10-04df-4721-b526-1830fd015a45" data-src="/s3-static/users/user16/XAUUSDDaily_17.png" /></p>
<p>We also note that <strong>hedge funds cut their gold longs to a six-month low</strong> in the week to August 15 while<strong> ETF holdings</strong> have seen <strong>12 straight weeks of outflows. </strong></p>
<p> </p>
<h3><strong>Of course, investors and traders will be wondering whether or not this rebound has legs.</strong></h3>
<blockquote><p><em>Markets have half an eye on <strong>Fed Chair Powell’s speech on Friday</strong> at <a href="https://www.forextime.com/market-analysis/trade-week-spx500m-demands-proof-out-nvidia-jackson-hole">Jackson Hole</a> while trying to navigate surging borrowing costs. </em></p></blockquote>
<p>Higher rates for longer should be a headwind for stocks and also gold, potentially exerting an ultimate cap on how high these assets can climb.</p>
<p>But for now, markets are putting such thoughts aside, with US stocks and gold attempting to enter the tail-end of August on a less dour note.</p>
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<p><img decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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