Daily Market View
Thursday, September 27, 2018
| U.S Stock Market
U.S stocks fell and Treasuries rose after the Federal Reserve signaled it’ll keep raising interest rates even as inflation remains tepid. The S&P 500 fell 0.3 percent, with the bulk of losses coming in the final 20 minutes of trading. Equities earlier gained after the central bank suggested inflation remained tepid, only to reverse as Chairman Jerome Powell said the Fed could raise rates past the perceived neutral level. He also raised concern about fiscal policy, calling its path “unsustainable.” The dollar was little changed after swinging between small gains and losses. Powell addressed financial markets directly in his comments, saying that officials “judged the overall vulnerabilities to be moderate” while acknowledging some asset prices are in the “upper reach of their historical ranges.” American equities closed Friday at a record, while the 10-year yield rose to near its highest of the year. Oil prices hit a four-year high before pulling back. The Fed’s statement provided ammunition for hawks and doves alike as investors parsed the language for clues on monetary policy.
|Major Economic Releases for Today|
||BOJ Kuroda speaks in Tokyo||06:35|
|German Consumer Price Index (YoY)||12:00||2.0%||2.0%|
|U.S Advance Goods Trade Balance||12:30||-$70.6b||-$72.2b|
|U.S Gross Domestic Product Annualized (QoQ)||12:30||4.2%||4.2%|
|U.S Personal Consumption||12:30||3.8%||3.8%|
|U.S Durable Goods Orders||12:30||1.9%||-1.7%|
||ECB President Draghi Addresses ESRB Conference in Frankfurt||13:30|
||BOE’s Carney chairs panel in Frankfurt||14:00|
|U.S Pending Home Sales (YoY)||14:00||-0.5%|
|Dow Jones Industrial Average
The Dow Jones Industrial Average lost 0.40%. The best performers of the session on the Dow Jones Industrial Average were International Business Machines, which rose 1.81% or 2.70 points to trade at 151.61 at the close. Meanwhile, Walt Disney Company added 1.39% or 1.58 points to end at 115.21 and Walgreens Boots Alliance Inc. was up 1.04% or 0.75 points to 72.96 in late trade. The worst performers of the session were American Express Company, which fell 1.69% or 1.86 points to trade at 108.01 at the close. Dow DuPont Inc. declined 1.56% or 1.06 points to end at 66.89 and Goldman Sachs Group Inc. was down 1.56% or 3.62 points to 228.88.
The tech heavy NASDAQ index lost 0.21%. The top performers on the NASDAQ Composite were CDTi Advanced Materials Inc. which rose 47.37% to 2.8000, Sphere 3D Corp which was up 37.18% to settle at 0.380 and Aldeyra which gained 34.85% to close at 13.35. The worst performers were Jaguar Health Inc. which was down 36.90% to 1.060 in late trade, FlexShopper Inc. which lost 27.23% to settle at 0.851 and Ultra Petroleum Corp which was down 23.22% to 0.975 at the close.
Oil prices eased yesterday after U.S data showed a surprise build in domestic crude inventories, but an impending drop in Iranian exports kept Brent futures above $80 a barrel and on track for a fifth straight quarterly gain. U.S. crude futures ended Wednesday’s session down 71 cents, or 1 percent, at $71.57 a barrel. U.S. crude inventories rose by 1.9 million barrels in the week to Sept. 21, according to U.S. Energy Information Administration (EIA) data. Analysts had expected a decrease of 1.3 million barrels. Refinery crude runs fell by 901,000 barrels per day, EIA data showed. Still, the oil market is bracing for a hit to global supplies from renewed U.S. sanctions on Iran. Brent remains on course for its fifth consecutive quarterly increase, the longest stretch since early 2007 when a six-quarter run led to a record-high price of $147.50 a barrel. We continue to expect that the decline in Iran exports will reach 1.4 million barrels per day.
|Precious and Base Metals
Gold prices rose today as investors looked for bargains after the metal fell to a two-week low in the previous session following a U.S interest rate hike and as limited gains in the dollar after the decision supported demand for the metal. Spot gold had risen 0.4 percent to $1,198.22 an ounce. On Wednesday, the metal touched its lowest since Sept. 11 at $1,190.13 an ounce. Spot gold prices have closed in a range between $1,210 and $1,190 an ounce since Aug. 28. U.S. gold futures were up 0.3 percent at $1,202.10 an ounce. As expected the U.S. Federal Reserve raised interest rates for the third time this year yesterday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. The fact that the Fed didn’t come out as overly hawkish meant there was some positivity felt through emerging market currencies. This may be playing in gold being gingerly bought. Meanwhile, the dollar steadied against its peers as the small boost it received from the Fed interest rate hike faded, with a decline in U.S. Treasury yields reducing support for the greenback. The Fed statement did not have much of an impact on the dollar and so we would venture to guess that the greenback could resume a little lower over the course of the next week or two, possibly giving gold an element of support. However, there is little evidence that gold’s tight trading range will change anytime soon. Gold is sensitive to higher interest rates because they boost the dollar, making bullion more expensive for buyers using other currencies. Gold has fallen more than 12 percent since hitting a peak in April against a backdrop of trade disputes and as the rising U.S. interest rates have cut demand for non-interest bearing bullion. Meanwhile, China on Wednesday unveiled plans to cut tariffs for products including machinery, electrical equipment, and textile products beginning on Nov. 1, as the country braces for an escalating trade war with the United States. Silver rose 1.1 percent to $14.44 an ounce.
Soybeans are recovering after it fell last week to its lowest price in nearly 10 years. Bargain buying and a major sale of American soy to Mexico yesterday helped lift U.S soybean futures for the second day.
|Futures Settlement Price Wednesday, September 26, 2018|
|S & P 500||SPM18||2922.25||2935.75||2907.5||2911.5||-9.5|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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