Daily Market View
Tuesday, August 28, 2018
| U.S Stock Market
Stocks jumped yesterday as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months. The Dow Jones Industrial Average rose 260 points as Caterpillar outperformed. The NASDAQ climbed 1 percent to an all-time high, breaking above 8,000 points for the first time, as Facebook, Amazon, Netflix and Alphabet rose. The S&P 500 gained 0.8 percent to hit a record high with materials and financials as the best-performing sectors. The market has been buffeted with a lot of headwinds lately, and the biggest one is trade. President Donald Trump said the deal would be called The United States-Mexico Trade agreement, leaving behind the 24-year-old NAFTA name. Trump added that the deal with Mexico is also very special for farmers and manufacturers. U.S. Trade Representative Robert Lighthizer said the deal must be approved by Congress before being implemented. Shares of Caterpillar and Boeing rose 2.8 percent and 1.3 percent, respectively.
|Major Economic Releases for Today|
|U.K Nationwide House Px n.s.a. (YoY)||06:00||2.7%||2.5%|
|U.S Advance Goods Trade Balance||12:30||-$69.0b||-$68.3b|
|U.S Wholesale Inventories (MoM)||12:30||0.2%||0.2%|
|U.S Retail Inventories (MoM)||12:30||0.0%|
|U.S S&P/Case-Shiller Composite-20 (YoY)||13:00||6.43%||6.51%|
|S&P/Case-Shiller US Home Price Index (YoY)||13:00||6.38%|
|U.S Richmond Fed Manufact. Index||14:00||17||20|
|U.S Consumer Confidence Index||14:00||126.5||127.4|
|U.S Conf. Board Present Situation||14:00||165.9|
|Dow Jones Industrial Average
The Dow Jones Industrial Average added 1.01% to hit a new 6-month high. The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc., which rose 3.19% or 7.49 points to trade at 242.60 at the close. Meanwhile, Caterpillar Inc. added 2.77% or 3.83 points to end at 142.04 and DowDuPont Inc. was up 2.31% or 1.60 points to 70.81 in late trade. The worst performers of the session were Pfizer Inc., which fell 1.93% or 0.82 points to trade at 41.58 at the close. Walmart Inc. declined 0.43% or 0.41 points to end at 94.54 and Johnson & Johnson was down 0.10% or 0.13 points to 134.92.
The NASDAQ index climbed 0.91%. The top performers on the NASDAQ Composite were ATA Inc. which rose 179.17% to 2.010, Egalet Corp which was up 35.59% to settle at 0.40 and AGM Group Holdings Inc Class A which gained 27.64% to close at 24.01. The worst performers were Eidos Therapeutics Inc. which was down 31.09% to 13.94 in late trade, Fuling Global Inc. which lost 12.50% to settle at 2.450 and Alliance MMA Inc. which was down 13.33% to 0.36 at the close.
Oil prices edged up yesterday, supported by a strengthening equities market and news that the United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA). U.S West Texas Intermediate (WTI) crude futures gained 15 cents, or 0.2 percent, to close at $68.87 a barrel. Last week, WTI posted a 4.3 percent weekly gain while Brent marked a 5.6 percent weekly increase. Prices pulled back aftermarket intelligence firm Genscape reported that inventories at the Cushing, Oklahoma, and delivery hub for WTI rose by about 764,800 barrels from Aug. 21 through Friday. The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact. Prices have been buoyed in recent weeks by the view that the oil market will tighten when U.S. sanctions targeting OPEC member Iran’s oil exports kick in November.
|Precious and Base Metals
Gold gained above $1,200 per ounce yesterday as the Dollar weakened after the United States and Mexico struck an agreement that lowers trade tensions. Major currencies gained against the U.S. dollar, which has been a safe haven from months of trade tensions. Spot gold gained 0.3 percent at $1,208.92 per ounce, earlier peaking at $1,212.38, a two-week high. U.S gold futures for December delivery settled up $2.70, or 0.2 percent, at $1,216 per ounce. The dollar index slid against a basket of six major currencies. A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies, which could boost bullion demand and prices. The NAFTA agreement is helping the platinum group metals a little bit. The United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to the new terms on auto trade and other issues to remain part of the three-nation pact. An agreement could ease concerns about an escalation in global trade tensions. But prices remained capped as higher rates, even if they come at a gradual pace, raise the opportunity cost of holding gold, which can be costly to store and insure. Our reading is that we still expect two more hikes this year and that should be the important thing near term for gold, next year the Fed is still likely to continue hiking. Gains in the Chinese Yuan yesterday made gold cheaper for buyers in the world’s biggest gold consumer, providing some support for prices. If prices hold at $1,200 an ounce, there is a good chance of further gains, with a target of $1,230/$1,235. Below $1,200, the bearish trend could recover strength, with a first targeted support area at $1,180. Higher activity in gold options amid geopolitical tensions and a record-long bull market for U.S equities suggest that investors are betting gold prices have found a floor. Meanwhile, spot silver gained 0.4 percent at $14.86 per ounce. Earlier it hit $14.92, its highest since Aug. 15.
Traditional AgricultureSoybean and corn futures fell to six-week lows yesterday on expectations of large U.S crops and fears that hog disease in China might hurt demand for feed. Wheat futures also declined, sliding for a sixth session on lackluster demand for U.S supplies.
|Futures Settlement Price Friday, August 27, 2018|
|S & P 500||SPM18||2877.75||2899.25||2876.75||2898.5||21.25|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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