Daily Market View
Monday, July 16, 2018
| U.S Stock Market
The benchmark S&P 500 index hit a more than five-month high on Friday on gains in industrial stocks and energy companies, while the safe-haven Dollar flattened after touching a two-week high. Gold slipped to seven-month lows and Treasury prices gained after the Federal Reserve reinforced views of strong U.S. economic growth in a report to Congress, reinforcing expectations of higher interest rates. The U.S. central bank reiterated that it “expects that further gradual increases” in interest rates would be appropriate given “solid” growth. An absence of rhetoric about a U.S-China trade war helped industrial stocks, as did remarks on Thursday from U.S. Treasury Secretary Steven Mnuchin, who said that the U.S and China might reopen trade talks. Despite the ominous headlines about a trade war with China, we’re comfortable with U.S. equities at current prices amid favorable macro trends and surging earnings growth. The Dow rose 94.52 points, or 0.38 percent, to 25,019.41, the S&P 500 gained 3.02 points, or 0.11 percent and the NASDAQ added 2.06 points, or 0.03 percent.
|Major Economic Releases for Today|
|China Surveyed Jobless Rate||02:00||4.8%|
|China Gross Domestic Product (YoY)||02:00||6.7%||6.8%|
|China Retail Sales (YoY)||02:00||8.8%||8.5%|
|Euro-Zone Trade Balance (euros)||09:00||17.6b||17.6b|
|U.S Empire Manufacturing||12:30||21||25|
|U.S Retail Sales Advance (MoM)||12:30||0.5%||0.8%|
|Canada Existing Home Sales (MoM)||13:00||1.7%||-0.1%|
|New Zealand REINZ House Sales (YoY)||21:00||1.3%|
|New Zealand Consumer Price Index (YoY)||22:45||1.6%||1.1%|
|Dow Jones Industrial Average
The Dow Jones Industrial Average rose 0.38%. The best performers of the session on the Dow Jones Industrial Average were United Technologies Corporation, which rose 1.70% or 2.16 points to trade at 129.51 at the close. Meanwhile, Walt Disney Company added 1.61% or 1.74 points to end at 109.99 and Boeing Co was up 1.39% or 4.80 points to 350.83 in late trade. The worst performers of the session were Cisco Systems Inc., which fell 4.13% or 1.80 points to trade at 41.78 at the close. Johnson & Johnson declined 1.44% or 1.84 points to end at 125.92 and American Express Company was down 0.66% or 0.67 points to 100.48.
The tech heavy NASDAQ index climbed 0.03%. The top performers on the NASDAQ Composite were ShiftPixy Inc. which rose 68.61% to 4.62, SenesTech Inc. which was up 20.74% to settle at 1.63 and Galmed Pharmaceuticals Ltd which gained 19.34% to close at 15.240. The worst performers were Auris Medical Holding AG which was down 47.14% to 0.296 in late trade, Izea Inc. which lost 26.17% to settle at 1.8900 and Helios and Matheson Analytics Inc. which was down 18.03% to 0.150 at the close.
Oil prices rose about 1 percent on Friday as strike actions in Norway and Iraq hit supplies, but futures were set for a second straight week of decline after Libyan ports reopened and on the view that Iran might still export some crude despite U.S. sanctions. Brent crude rose 88 cents to settle at $75.33 a barrel, a 1.18 percent gain. The global benchmark fell about 2.7 percent for the week. West Texas Intermediate (WTI) crude futures rose 68 cents to settle at $71.01 a barrel, but lost about 3.9 percent this week. The market pared gains late in the session on a Bloomberg report that the Trump administration is actively considering tapping in to the country’s Strategic Petroleum Reserve, which would add supply to the market. The United States holds a reserve of about 660 million barrels, enough for about three or four months of supply. Hundreds of workers on Norwegian offshore oil and gas rigs went on strike on Tuesday after rejecting a proposed wage deal.
|Precious and Base Metals
Gold prices were muted on Friday, stuck in a tight trading range, as the dollar extended rally from the previous session when strong U.S inflation data and trade war concerns boosted demand for the greenback. Spot gold was down 0.1 percent at $1,245.54 an ounce. For the week, the metal was down 0.7 percent. The dollar has been a prime mover of gold prices. Market sentiments have been largely positive on the greenback as investors pivoted from the safe haven asset despite rising geopolitical risks. The dollar was buoyant near a 10-day peak versus a basket of currencies on Friday, supported by Treasury yields that edged higher on expectations the U.S. inflation rate will rise. U.S. consumer price data on Thursday showed a steady buildup of inflation that could keep the Federal Reserve on a path of gradual interest rate increases. A stronger dollar and higher U.S. rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies. Elsewhere, the European Central Bank will keep rates at a record low for as long as needed to raise inflation, minutes of the bank’s latest meeting showed. Meanwhile, Most Asian share markets rose on Friday, but China’s markets wobbled as investors braced for the impact of broadening, tit-for-tat Chinese-U.S tariffs. The United States and China could reopen talks on trade but only if Beijing is willing to make significant changes, U.S. Treasury Secretary Steven Mnuchin said on Thursday. The trade war issue is still creating a lot of uncertainty. If the situation continues and we’re not seeing any real movements in gold prices because of it, we might see prices actually move lower. During times of uncertainty gold prices can receive a boost as the metal is widely considered a safe-haven asset but bullion has failed to benefit from recent trade disputes. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped 0.48 percent to 795.19 tonnes on Thursday.
Soybean futures slid to fresh lows on Friday and the most-active contract closed at the lowest in nearly a decade after a government report reinforced concerns that the trade dispute with China will dent exports and lead to a build-up in stocks.
|Futures Settlement Price Friday, July 13, 2018|
|S & P 500||SPM18||2798.5||2807.25||2793.25||2803||4.5|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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