Daily Market View
Friday, August 24, 2018
| U.S Stock Market
Stocks fell yesterday as an ongoing trade war between the U.S and China and worries of renewed legal issues for President Donald Trump dampened investor sentiment. The Dow Jones Industrial Average dropped 76.62 points as Caterpillar lagged. The closed 0.2 percent lower with materials falling more than 0.6 percent. The NASDAQ slipped 0.1 percent. Caterpillar and Boeing, two bellwethers of global trade, fell 2 percent and 0.7 percent, respectively. Deere shares also dipped 1 percent. Tech shares Alibaba and Netflix fell 3.2 percent and 1.5 percent, respectively, giving up earlier gains. Tariffs on $16 billion worth of Chinese import-product categories took effect yesterday. Beijing retaliated with its own fresh tariffs on $16 billion worth of imports. The U.S and China held talks on Wednesday that continued into Thursday, but observers did not have high hopes after Trump said he did not “anticipate much” to be resolved, in an interview with Reuters.
|Major Economic Releases for Today|
|German Domestic Demand||06:00||0.6%||0.4%|
|German Gross Domestic Product n.s.a. (YoY)||06:00||2.3%||2.3%|
|U.K BBA Loans for House Purchase||08:30||40500||40541|
|U.S Durable Goods Orders||12:30||-0.5%||0.8%|
|U.S Durables Ex Transportation||12:30||0.5%||0.2%|
|Mexico Economic Activity IGAE (YoY)||13:00||1.6%||2.23%|
||Fed Hosts Annual Jackson Hole Central Banking Symposium||14:00|
|U.S Powell to Discuss Economy and Monetary Policy at Jackson Hole||14:00|
|Baker Hughes U.S Rig Count||17:00|
|Dow Jones Industrial Average
The Dow Jones Industrial Average fell 0.30% yesterday. The best performers of the session on the Dow Jones Industrial Average were Visa Inc., which rose 0.68% or 0.96 points to trade at 142.10 at the close. Meanwhile, Home Depot Inc. added 0.60% or 1.19 points to end at 200.16 and Microsoft Corporation was up 0.47% or 0.50 points to 107.56 in late trade. The worst performers of the session were Caterpillar Inc., which fell 2.03% or 2.84 points to trade at 136.79 at the close. Goldman Sachs Group Inc. declined 1.25% or 3.00 points to end at 236.34 and Exxon Mobil Corp was down 1.10% or 0.88 points to 79.08.
The tech heavy NASDAQ index declined 0.13%. The top performers on the NASDAQ Composite were Obalon Therapeutics Inc. which rose 52.00% to 2.66, TMSR Holding Company Ltd which was up 33.61% to settle at 4.81 and Lantronix Inc. which gained 19.67% to close at 5.050. The worst performers were Helios and Matheson Analytics Inc. which was down 32.44% to 0.020 in late trade, PAVmed Inc. which lost 19.57% to settle at 1.11 and Akorn Inc. which was down 17.56% to 14.93 at the close.
Oil prices steadied yesterday as the escalating trade war between the United States and China weighed on demand expectations a day after prices jumped on a big draw in U.S crude inventories. U.S. light crude was 3 cents lower at $67.83 a barrel. Options activity showed some traders were guarding against the possibility of a sharp slide in U.S crude prices. The market is trying to balance the worries about decreased global demand growth and how much extra oil the Saudis and Russians are going to put on. The U.S.-China trade dispute deepened, with the imposition of 25 percent tariffs on $16 billion worth of each other’s goods. The world’s two largest economies have imposed tariffs on a combined $100 billion of products since early July, and Washington is holding hearings on proposed duties on another $200 billion worth of Chinese imports. China is almost certain to respond. U.S commercial crude oil inventories fell 5.8 million barrels last week.
|Precious and Base Metals
Gold prices slid yesterday, under pressure from a stronger dollar as a prominent U.S. Federal Reserve official reaffirmed the central bank’s intention to raise interest rates and punitive trade tariffs between the United States and China kicked in. Bullion failed to confirm its brief break on Wednesday through $1,200 an ounce, a key psychological level, as the dollar resumed its ascent a day later. With the dollar stronger again, gold was sliding yesterday. Spot gold declined 0.7 percent to $1,187.30 per ounce. Prices hit their highest since Aug. 13 at $1,201.51 in the previous session. U.S. gold futures for December delivery settled down $9.30, or 0.8 percent, at $1,194 per ounce, as the dollar rose against a basket of major currencies. The Fed’s latest policy meeting minutes suggested it is on course to raise interest rates further after two hikes this year, denting demand for non-interest-yielding gold. Meanwhile, trade tariffs imposed by the United States and China on each other kicked in on Thursday, benefiting the safe-haven U.S. currency. Amid shocks to the global financial system caused by the trade war, investors have opted for the safety of U.S. Treasuries and the U.S. currency, making dollar-denominated gold more expensive for holders of other currencies. Trade tariffs could add to inflation possibilities. Everything is pointing towards inflation returning in the market. When or if companies start to raise prices is still unknown. The number of Americans filing for unemployment benefits fell last week but sales of new single-family homes unexpectedly declined in July. Markets are awaiting Fed Chairman Jerome Powell’s comments today at the central bank’s annual meeting in Jackson Hole, Wyoming for any change in its interest rate stance, especially after U.S. President Donald Trump’s attack on its monetary policy this week. Kansas City Federal Reserve Bank President Esther George said on Thursday that the Fed will move ahead with rate hikes. Spot silver dropped 1.2 percent to $14.56 an ounce, touching $14.49, a one-week low.
Wheat heading lower for a fourth straight session on technical selling and disappointing weekly U.S export sales. The USDA reported export sales of U.S wheat in the latest week at 239,800 tonnes.
|Futures Settlement Price Thursday, August 23, 2018|
|S & P 500||SPM18||2861.75||2869.5||2854.75||2857.75||-3.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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