Daily Market View
Wednesday, October 24, 2018
| U.S Stock Market
Wall Street came off its session lows yesterday as the wave of selling that started in Asia and which rippled through European and US markets abated somewhat in afternoon trade. With about 90 minutes to go before the closing bell, the S&P 500 is down 0.7 per cent after having pulled back from a decline of 2.3 per cent that briefly pushed it to a five-month low. The Dow Jones Industrial Average cut a 2.2 per cent loss to just 0.5 per cent while the NASDAQ was sitting 0.7 per cent lower following a 2.8 per cent slide earlier yesterday. U.S stocks endured a brutal October as rising interest rates, trade tensions and slowing global growth soured sentiment. Investors were further rattled yesterday after two US industrial bellwethers — 3M and Caterpillar — issued disappointing outlooks and raised fears that corporate earnings have peaked. The sell-off was not limited to equities. Crude prices suffered their biggest one-day drop in three months as jitters over global growth outlook.
|Major Economic Releases for Today|
|Markit/BME Germany Composite PMI||07:30||54.8||55|
|Markit Eurozone Composite PMI||08:00||53.9||54.1|
|U.K BBA Loans for House Purchase||08:30||39000||39402|
|U.S MBA Mortgage Applications||11:00||-7.1%|
|U.S House Price Index (MoM)||13:00||0.3%||0.2%|
|Markit US Composite PMI||13:45||53.9|
|Bank of Canada Rate Decision||14:00||1.75%||1.50%|
|U.S New Home Sales (MoM)||14:00||-0.6%||3.5%|
|DOE U.S Crude Oil Inventories||14:30||3000k||6490k|
|Dow Jones Industrial Average
The Dow Jones Industrial Average fell 0.50%. The best performers of the session on the Dow Jones Industrial Average were McDonald’s Corporation, which rose 6.31% or 10.52 points to trade at 177.15 at the close. Meanwhile, Verizon Communications Inc. added 4.06% or 2.23 points to end at 57.21 and United Technologies Corporation was up 2.86% or 3.62 points to 130.02 in late trade. The worst performers of the session were Caterpillar Inc., which fell 7.56% or 9.73 points to trade at 118.98 at the close. 3M Company declined 4.38% or 8.81 points to end at 192.55 and Chevron Corp was down 3.25% or 3.81 points to 113.40.
The NASDAQ index lost 0.42%. The top performers on the NASDAQ were Cinedigm Corp which rose 53.93% to 1.3700, Titan Pharmaceuticals Inc. which was up 36.36% to settle at 0.4800 and Realm Therapeutics PLC ADR which gained 32.07% to close at 2.86. The worst performers were Selecta Biosciences Inc. which was down 33.36% to 8.87 in late trade, Astec Industries Inc. which lost 24.88% to settle at 35.51 and One Horizon Group Inc. was down 22.31% to 0.2618 at the close.
Oil prices fell more than 4 percent yesterday, pressured by stock market weakness and vows by top oil exporter Saudi Arabia to meet the demands of the world’s oil consumers. U.S crude ended yesterday’s session down $2.93, or 4.2 percent, to $66.43 a barrel, after earlier hitting a two-month low at $65.74. The contract posted its biggest daily loss since July 11, when it fell 5 percent, and settled below its 200-day moving average for the first time in more than a year. The correlation between oil prices and broader market trading was a driving factor and the volatility in both is enough of a reason to take some money off the table. Traders have been trimming bets that oil prices will rise in recent weeks, a sign the market is reducing its exposure to risk and taking profits after a run up in oil prices. U.S crude and Brent have both fallen by about $10 from their nearly four-year closing highs on Oct. 3. The prospect of weaker-than-expected economic growth has already led some forecasters to trim their expectations for oil demand.
|Precious and Base Metals
Gold rose 1 percent yesterday to its highest level in over three months as the dollar weakened and global stock markets tumbled, with rising political and economic uncertainties adding to bullion’s appeal. Palladium soared to a record high, bringing the precious metal to within striking distance of achieving parity with gold and with additional support from expected renewed demand from China’s automotive sector. Spot gold was up 1 percent at $1,233.21 an ounce, having earlier touched its highest since July 17 at $1,239.68. U.S. gold futures rose 0.9 percent to $1,236.10, also helped by positive currency fundamentals as the dollar turned lower. It was the selloff in the stock markets yesterday and a weaker dollar which helped gold prices. The main thing to watch on gold is the turbulence in the equity markets, especially if it is sustained. If you get continued declines like this, gold should pick up. Wall Street followed a slide in European and Asian stock markets, pressured by disappointing corporate earnings, Saudi Arabia’s diplomatic crisis and a dispute over Italy’s finances. The European Commission rejected Italy’s draft 2019 budget yesterday, saying it brazenly broke EU rules on public spending and asked Rome to submit a new one within three weeks or face disciplinary action. The outlook for gold is quite constructive with the metal quite resilient even with a strong dollar. Gold prices have gained more than 6 percent after falling in mid-August to $1,159.96 an ounce – their lowest since January 2017. Holdings at SPDR Gold Trust, the world’s largest gold-backed, exchange-traded fund, rose 0.3 percent on Monday to 747.88 tonnes. Investors consider gold a safe store of value during times of economic and political uncertainty. Meanwhile, palladium was up 1.8 percent at $1,141.49 an ounce after hitting a record $1,150.50. Among other precious metals, silver rose 0.8 percent to $14.72, while platinum was up 1.6 percent at $832.80.
Soybean futures fell in yesterday’s trading session to a near two-week low after the U.S Department of Agriculture pegged the pace of harvesting above market expectations, though forecasts for rain provided a floor to losses.
|Futures Settlement Price Monday, October 23, 2018|
|S & P 500||SPM18||2755.5||2757.25||2692||2746.25||-9.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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