Daily Market View
Monday, October 15, 2018
| U.S Stock Market
U.S stocks rallied in an extremely choppy session, following a turbulent few days that saw concern over higher interest rates drive the S&P 500 down to levels not seen since early July and unsettle equity markets across the globe. It is clear that the US markets hold the key for the direction of indices over the next few weeks. The technology sector led the rally on following steep falls earlier in the week. Financials lagged behind the wider market, even after quarterly earnings from a number of investment banks exceeded expectations. One factor behind the equity sell-off this week, during which the S&P 500 registered its biggest one-day drop since February, was the recent rise in Treasury yields, which reflected optimism for the US economy and expectations that the Federal Reserve would continue raising interest rates. Market participants have become more confident that the US central bank will keep lifting borrowing costs at the current quarterly pace throughout next year. The currency markets were largely becalmed throughout the bout of equity volatility.
|Major Economic Releases for Today|
|Japan Capacity Utilization (MoM)||04:30||-0.6%|
|Japan Industrial Production (YoY)||04:30||0.6%|
|Switzerland Total Sight Deposits||08:00|
|U.S Retail Sales Advance (MoM)||12:30||0.5%||0.1%|
|U.S Empire Manufacturing||12:30||19|
|U.S Retail Sales Ex Auto and Gas||12:30||0.2%|
|Canada Existing Home Sales (MoM)||13:00||0.9%|
|U.S Business Inventories||14:00||0.6%|
|New Zealand Consumer Price Index (YoY)||21:45||1.5%|
|Dow Jones Industrial Average
The Dow Jones Industrial Average rose 1.15% on Friday. The best performers of the session on the Dow Jones Industrial Average were Visa Inc., which rose 4.73% or 6.33 points to trade at 140.06 at the close. Meanwhile, Walgreens Boots Alliance Inc. added 3.67% or 2.60 points to end at 73.50 and Cisco Systems Inc. was up 3.60% or 1.59 points to 45.71 in late trade. The worst performers of the session were JPMorgan Chase & Co, which fell 1.09% or 1.18 points to trade at 106.95 at the close. The Travelers Companies Inc. declined 0.53% or 0.66 points to end at 123.65 and Chevron Corp was down 0.56% or 0.66 points to 117.77.
The tech heavy NASDAQ index gained 2.29%. The top performers on the NASDAQ Composite were Corium International Inc. which rose 52.83% to 12.700, Auris Medical Holding AG which was up 44.12% to settle at 0.980 and Youngevity International Inc. which gained 40.74% to close at 13.300. The worst performers were Immune Design Corp which was down 33.69% to 1.85 in late trade, Intelli-pharmaceutics International Inc. which lost 21.00% to settle at 0.640 and Kelly Services B Inc. which was down 20.00% to 17.600 at the close.
Crude oil futures gained on Friday after falling by more than $2/b Thursday. Recent falls in the US dollar index stemming from a weaker global equities market helped crude prices stabilize, sources said. However, there were some bearish headlines. The International Energy Agency on Friday cut its estimates of global oil demand this year and next by 100,000 b/d each, while raising its estimate of this year’s growth in non-OPEC supply to 2.2 million b/d following what it called “relentless” growth in global production. In its latest monthly oil market report, the IEA cuts its estimates of global demand to 1.3 million b/d for this year and 1.4 million b/d next year, citing currency depreciations, trade disputes and a revision to its data on China. China’s crude oil imports edged up by a modest 0.5% year on year in September to 9.09 million b/d, but the rate of growth could rise in October as both state-run and independent refiners have lifted throughout to meet robust demand.
|Precious and Base Metals
Gold prices eased on Friday, the session after their biggest daily gain in more than two years, coming under pressure as the U.S Dollar climbed and global stocks rebounded from a six-day rout. Spot gold was down 0.5 percent at $1,217.81 an ounce. On Thursday, bullion jumped about 2.5 percent on safe-haven buying during an equities selloff. Thursday’s peak of $1,226.27 was the highest since July 31. Spot gold was on track for its biggest weekly gain in seven weeks, up about 1.3 percent for the week. U.S gold futures settled down $5.6, or 0.46 percent, at $1,222. A rally in the U.S Dollar is putting downward pressure on gold on Friday. The dollar index rose as global equities rebounded from a multiday selloff, boosted by strong export data in China. Event-driven rallies usually don’t last long, a rebound in equities was one of the main factors weighing on gold. We need more (ammunition) for gold to move further as it has been very well abandoned with only a few central banks buying besides some retail buyers. Gold remains down about more than 10 percent from its April peak, pressured by a strong dollar as the U.S.-China trade war unfolds while the Federal Reserve has raised U.S. interest rates. The Fed hiked rates last month for the third time this year and is expected to raise them again in December. Gold is going to be dictated by the U.S. Federal Reserve. As long as interest rates continue to move higher, it’s going to continue to apply a lot of downward pressure on the precious complex. During Thursday’s surge, bullion broke above the narrow trading range of the past 1-1/2 months. Gold is trading fairly close to the 100-day moving average at $1,228. There should be plenty of resistance, but a close above that level could signal a move higher.
Wheat prices jumped on tightening global supplies. Soybean futures rose for a second straight session on Friday on short-covering and follow-through buying after a government report the prior day forecast a smaller-than-expected U.S harvest. Corn also advanced after the U.S Department of Agriculture (USDA) unexpectedly cut its U.S. corn yield outlook in a monthly report on Thursday and as traders braced for possible further cuts to the agency’s crop outlook.
|Futures Settlement Price Friday, October 12, 2018|
|S & P 500||SPM18||2748.25||2784.75||2732.25||2768.5||22|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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