Daily Market View
Friday, July 06, 2018
| U.S Stock Market
Stocks traded higher yesterday as tech shares rose, but investors remained on edge as the U.S. prepared to slap tariffs on goods imported from China. The Dow Jones Industrial Average rose 157 points, with Intel outperforming. The gained 0.7 percent as tech climbed 1.4 percent. The NASDAQ advanced 1 percent as Facebook, Amazon, Netflix and Google-parent Alphabet all rose. The U.S. is expected to activate levies on $34 billion in Chinese-made goods on Friday, with Beijing expected to respond with its own levies on U.S goods. Trade tensions have kept a lid on equity gains recently as investors fret over the tariffs’ impact on corporate profits and the broader global economy. Sentiment around trade was lifted slightly after Reuters reported that the U.S ambassador to Germany told industry executives that President Donald Trump could hold off on implementing tariffs on European cars in exchange for concessions. General Motors shares rose as much as 2.6 percent before trading 1.2 percent higher. Fiat Chrysler also rose 6 percent.
|Major Economic Releases for Today|
|Japan Leading Index||05:00||106.5||106.2|
|German Industrial Production n.s.a. and w.d.a. (YoY)||06:00||1.5%||2.0%|
|U.K Unit Labor Costs (YoY)||08:30||2.1%|
|Canada Net Change in Employment||12:30||20.0k||-7.5k|
|Canada Unemployment Rate||12:30||5.8%||5.8%|
|U.S Change in Non-farm Payrolls||12:30||195k||223k|
|U.S Unemployment Rate||12:30||3.8%||3.8%|
|U.S Average Hourly Earnings (YoY)||12:30||2.8%||2.7%|
|U.S Trade Balance||12:30||-$43.6b||-$46.2b|
|Dow Jones Industrial Average
The Dow Jones Industrial Average gained 0.75%. The best performers of the session were Intel Corporation, which rose 2.59% or 1.28 points to trade at 50.75 at the close. Meanwhile, Johnson & Johnson added 1.87% or 2.29 points to end at 125.00 and Procter & Gamble Company was up 1.68% or 1.31 points to 79.21 in late trade. The worst performers of the session were Chevron Corp, which fell 0.60% or 0.75 points to trade at 123.98 at the close. The Travelers Companies Inc. declined 0.14% or 0.17 points to end at 122.60 and United Technologies Corporation was up 0.02% or 0.03 points to 124.95.
The NASDAQ index climbed 1.12%. The top performers were Differential Brands Group Inc. which rose 57.28% to 4.860, Xplore Technologies Corp which was up 44.90% to settle at 5.970 and Real Goods Solar Inc which gained 32.50% to close at 0.5300. The worst performers were Amedica Corp which was down 15.89% to 0.740 in late trade, American Superconductor Corporation which lost 15.72% to settle at 5.95 and Biocept Inc. which was down 16.27% to 0.175 at the close.
Oil fell on yesterday after U.S government data showed an unexpected build in crude oil stockpiles. U.S crude futures fell $1.20 to settle at $72.94 a barrel, retreating from Tuesday’s 3-1/2-year high of over $75. U.S. crude stockpiles rose 1.3 million barrels last week, according to U.S EIA data. Analysts had expected a 3.5 million-barrel decline. An unexpected build in the U.S commercial crude inventory has prompted profit-taking. Inventories at Cushing, Oklahoma, the delivery point for U.S crude futures, fell to their lowest since December 2014. The most concerning aspect for inventories is the continued decline in Cushing. On Wednesday, U.S President Donald Trump accused the Organization of the Petroleum Exporting Countries of driving up fuel prices. The OPEC Monopoly must remember that gas prices are up & they are doing little to help. OPEC together with a group of non-OPEC producers led by Russia started withholding output in 2017 to prop up the market.
|Precious and Base Metals
Gold was flat yesterday, as the U.S dollar weakened and investors awaited the minutes of the most recent U.S Federal Reserve policy meeting for clues on the pace of further interest rate hikes this year. Spot gold was unchanged at $1,256.15 ounce. U.S gold futures for August delivery settled up $5.30, or 0.4 percent, at $1,258.80 per ounce. The dollar index fell to its lowest level in more than a week while the euro climbed half a percent to near three-week highs following strong German data. The dollar’s down, giving some support to precious metals. Gold is sensitive to rising interest rates, as higher rates increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced. The minutes may point to concerns about inflation or that members want monetary policy to keep pace with fairly strong economic growth. Investors are also awaiting the release of non-farm payrolls and unemployment data today. One would not like to have any bullish bets on gold when the labor market trend is strong. Physical gold demand has been lackluster in India, the second-biggest gold consumer after China, Commerzbank said, lending no price support. Meanwhile, silver was flat at $16.05 an ounce. Palladium dropped 0.1 percent to $945.50 an ounce, while platinum declined 0.5 percent to $836 after touching its lowest since 2008 at $793 on Tuesday. It’s a speculative-driven selloff in platinum; it’s not a fundamentally driven selloff. And when we think about the fundamentals, at $800, most South African mines are losing money. So if we maintain these prices sub-$900, there will eventually be a supply-led response. Copper prices fell to their lowest level in a year Thursday, weighed down by intensifying trade tensions between the U.S. and China.
Wheat, Corn, and Soybeans
Soybean futures were little changed as the oilseed market consolidated after losses fuelled by an ongoing U.S-China trade dispute pushed prices to a two-year closing low on Monday. The International Grains Council on Monday cut its forecasts for 2018/19 global wheat and corn production as adverse weather dented prospects in Russia and the European Union. Traders are worried about Chinese tariffs that could be implemented from the end of the week on U.S exports.
|Futures Settlement Price Thursday, July 05, 2018|
|S & P 500||SPM18||2721.75||2739.25||2712.5||2739||16.5|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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