Daily Market View
Tuesday, November 20, 2018
| U.S Stock Market
Stocks retreated sharply lower yesterday, with shares of technology and internet-related companies dragging the market lower. The main equity benchmarks saw losses accelerate in morning trade after a report showed home-builders’ confidence plummeted in November. U.S financial markets will be closed Thursday for the Thanksgiving Day holiday. The NASDAQ led the markets lower, closing down 219.4 points, or 3%. The Dow Jones Industrial Average tumbled 395.8 points, or 1.6%, and the S&P 500 index retreated 45.5 points, or 1.7%. Last week, the Dow posted a weekly decline of 2.2%, the S&P 500 index declined by 1.6% while the NASDAQ shed 2.2%. Investor anxiety, evidenced by last week’s declines, continued Monday, following a report on home-builder confidence that showed sector executives less upbeat than at any point in more than two years. Trade issues have been a key driver of volatility, as investors consider the possibility that U.S. tariff rates on a swath of Chinese goods could rise from 10% to 25% in January, as they will under current policy, absent a resolution.
|Major Economic Releases for Today|
|Australia RBA Meeting Minutes||00:30|
|Japan Convenience Store Sales (YoY)||07:00||3.5%|
|Switzerland Swiss Watch Exports (YoY)||07:00||-6.8%|
|German Producer Price Index (YoY)||07:00||3.3%||3.2%|
||Australia RBA’s Lowe gives speech in Melbourne||08:20|
||BOE’s Carney, Haldane, Cunliffe and Saunders Testify in London||10:00|
|U.S Housing Starts (MoM)||13:30||2.4%||-5.3%|
|U.S Building Permits (MoM)||13:30||-0.8%||-0.6%|
|Australia Westpac Leading Index (MoM)||23:30||-0.1%|
|Dow Jones Industrial Average
The Dow Jones Industrial Average fell 1.56% yesterday. The best performers of the session on the Dow Jones Industrial Average were Pfizer Inc., which rose 1.54% or 0.67 points to trade at 44.18 at the close. Meanwhile, The Travelers Companies Inc. added 1.36% or 1.75 points to end at 130.52 and Johnson & Johnson was up 1.19% or 1.74 points to 147.73 in late trade. The worst performers of the session were Boeing Co, which fell 4.47% or 15.01 points to trade at 320.94 at the close. Apple Inc. declined 3.96% or 7.67 points to end at 185.86 and Visa Inc. was down 3.87% or 5.42 points to 134.76.
The tech heavy NASDAQ index fell 3.03%. The top performers on the NASDAQ Composite were Cesca Therapeutics Inc. which rose 51.32% to 0.4600, Akers Biosciences Inc. which was up 42.28% to settle at 1.750 and Yulong Eco-Materials Ltd which gained 25.69% to close at 6.410. The worst performers were Arcimoto Inc. which was down 21.77% to 2.30 in late trade, Sonoma Pharmaceuticals Inc. which lost 18.47% to settle at 0.901 and Champions Oncology Inc. which was down 17.89% to 10.1900 at the close.
Oil prices rose in choppy trade yesterday, under pressure from growing supply but supported by a reported drawdown of U.S oil inventories, potential EU sanctions on Iran and possible OPEC production cuts. U.S futures ended yesterday’s session 68 cents higher at $56.76, after dropping as far as $55.08, near last week’s one-year low. Traders said futures pared losses when energy information provider Genscape reported that crude inventories fell in the latest week. EU foreign ministers endorsed a French government decision to sanction Iranian nationals accused of a bomb plot in France, three diplomats said. The United States has granted waivers to some of Iran’s oil customers. OPEC, led by Saudi Arabia, is pushing for the group and its partners to reduce output by 1 million to 1.4 million barrels per day to prevent a build-up of unused fuel. U.S. crude stockpiles have grown for eight straight weeks, and data last week showed inventories swelled by the most in more than a year.
|Precious and Base Metals
Gold inched up yesterday as the dollar fell, but the metal stayed in a tight range as investors held off on big moves ahead of the U.S Thanksgiving holiday on Thursday. Spot gold was 0.2 percent higher at $1,224.13 per ounce after hitting a one-week high of $1,225.29 in the previous session. U.S gold futures settled up $2.30, or 0.2 percent, at $1,225.30. The dollar fell to two-week lows after Federal Reserve officials’ comments about the U.S. economy suggested the central bank may be nearing the end of its tightening cycle. A softer dollar makes gold cheaper for holders of other currencies. There has been a lot of back and forth language (on) whether or not the Federal Reserve will implement a neutral interest rate or will they take it above neutral, temporarily. Markets are waiting for a little more clarity on (a possible) December rate hike as well as the outlook for 2019. Gold is taking a sideways approach in this environment. Trading volumes are expected to remain subdued before Thanksgiving. I expect prices to consolidate around the $1,220 level throughout the remainder of the week. There is not a lot of news action in the market. We are expecting the Fed to raise interest rates at the next meeting in December. Most likely that will keep gold from getting above the recent highs. Higher rates dampen the appeal of gold, which pays no interest and incurs costs to store and insure. Indicative of investor sentiment towards bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2 percent to their lowest in a week on Friday. Hedge funds and money managers boosted their net short position in gold to the highest in five weeks. Palladium fell 1.4 percent to $1,160.70 per ounce, after hitting a record high of $1,185.40 in the previous session. Silver rose 0.2 percent to $14.43 an ounce.
Soybean futures fell 2.1 percent yesterday, hitting their lowest since Nov. 8, as a lack of consensus at a meeting of Asia-Pacific leaders cooled hopes of Washington and Beijing resolving a trade dispute that has disrupted U.S soybean exports to China. Wheat prices also fell sharply, shedding 1.7 percent as investors continued to wait for an upturn in U.S exports.
|Futures Settlement Price Monday, November 19, 2018|
|S & P 500||SPM18||2732.75||2748||2681.5||2696.25||-45.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.