Daily Market View
Wednesday, July 18, 2018
| U.S Stock Market
U.S stock rose yesterday, extending a recent upswing after Federal Reserve Chairman Jerome Powell indicated the U.S. central bank wouldn’t move too quickly in changing monetary policy, and that it would be flexible in the face of changing conditions. Traders also digested the latest round of corporate earnings, which came in mixed but nevertheless showed strong growth. The Dow Jones Industrial Average added 46 points, or 0.2%. The blue-chip average is on track for its fourth straight advance, as well as its eighth rise of the past nine sessions. The S&P 500 was up by 11 points, or 0.4%. The NASDAQ advanced by 46 points, or 0.6%, hitting its latest in a series of intraday records. The day’s gains were broad, with 10 of the 11 primary S&P 500 sectors higher on the day. Leading the move higher was the materials sector, which rose 1.4%, and technology stocks, up 0.8%. Appearing in front of the Senate Banking Committee, Powell said the “best way forward is to keep gradually raising the federal-funds rate for now.”
|Major Economic Releases for Today|
|U.K Consumer Price Index (YoY)||08:30||2.6%||2.4%|
|U.K House Price Index (YoY)||08:30||3.7%||3.9%|
|Euro-Zone Consumer Price Index (YoY)||09:00||2.0%||1.9%|
|U.S MBA Mortgage Applications||11:00||2.5%|
|U.S Housing Starts (MoM)||12:30||-2.2%||5.0%|
|U.S Building Permits (MoM)||12:30||2.2%||-4.6%|
||U.S Fed Chairman Powell Appears Before House Panel||14:00|
|DOE U.S. Crude Oil Inventories||14:30||-12633k|
||U.S Federal Reserve Releases Beige Book||18:00|
|Dow Jones Industrial Average
The Dow Jones Industrial Average added 0.22% to hit a new 1-month high. The best performers of the session on the Dow Jones Industrial Average were Johnson & Johnson, which rose 3.54% or 4.42 points to trade at 129.11 at the close. Meanwhile, DowDuPont Inc. added 2.04% or 1.34 points to end at 67.06 and United Technologies Corporation was up 1.34% or 1.73 points to 130.71 in late trade. The worst performers of the session were UnitedHealth Group Incorporated, which fell 2.60% or 6.69 points to trade at 250.29 at the close. International Business Machines declined 1.35% or 1.97 points to end at 143.49 and Chevron Corp was down 0.87% or 1.07 points to 121.91.
The NASDAQ index climbed 0.63%. The top performers were Ameri Holdings Inc. which rose 47.46% to 1.74, Riot Blockchain Inc. which was up 37.64% to settle at 6.2900 and Champions Oncology Inc. which gained 25.43% to close at 7.3000. The worst performers were Alliance MMA Inc. which was down 31.09% to 0.20 in late trade, MER Telemanagement Solutions Ltd which lost 27.46% to settle at 2.0600 and AVEO Pharmaceuticals Inc. which was down 24.21% to 2.1600 at the close.
Crude oil futures steadied yesterday as the focus turned to falling inventories in the United States and further output constraints in Venezuela and Libya. Supply disruptions in Venezuela returned to the forefront as two of the country’s four crude upgraders are scheduled to undergo maintenance in the next few weeks. The units have the ability to process a combined 700,000 barrels per day and are used to prepare extra-heavy oil for export. Every time there’s an update that the situation in Venezuela is, in fact, worsening, it props up the market. U.S crude settled up 2 cents at $68.08 a barrel. In addition to Venezuela’s falling output, traders are also looking at U.S. inventories, which are expected to decline 3.5 million barrels in the week to July 13, according to a preliminary Reuters poll. Oil prices have fallen by almost 10 percent over the past week as crude export terminals in Libya have reopened.
|Precious and Base Metals
Gold declined more than 1 percent and hit its lowest in a year yesterday as the U.S dollar strengthened during testimony by U.S Federal Reserve Chairman Jerome Powell to the U.S Congress. Powell offered an upbeat view of the U.S. economy in an appearance before the Senate Banking Committee, with markets expecting two more interest rate increases this year amid a continued economic expansion. The dollar, in which gold is priced, gained against a basket of currencies during the testimony, making gold more expensive for non-U.S. investors. The dollar is really reacting to this ‘goldilocks’ effect of the economy and a slowly rising interest rate environment. That is usually a recipe for a stronger dollar. Higher interest rates make gold more expensive to own since bullion does not earn any interest or dividends, and costs money to store and insure. Spot gold was 1.1 percent lower at $1,226.91 per ounce, having earlier hit its lowest since last July at $1,225.58. The metal is down more than 5 percent for the year. U.S gold futures for August delivery settled down $12.40, or 1 percent, at $1,227.30 per ounce. The International Monetary Fund warned on Monday that escalating trade tensions following U.S. tariff actions threaten to depress medium-term growth prospects. The comments came as China reported slower second quarter growth, though Beijing said that would not affect its 2018 growth target. UBS economists lowered their estimates for Chinese growth to take into account trade war escalation. If China is slowing down, there will be consequences to global commodity consumption and that’s going to drag gold down as well. Chinese gold ETF liquidity has dropped a lot these days so that means people do not see any major breakthrough in either direction. Demand for gold in top-consumer China has been weak as an ongoing trade dispute with United States has weakened the local currency. Silver fell 0.9 percent to $15.60 an ounce, dipping to $15.51, its lowest since July 2017.
Soybean and corn futures rose in yesterday’s trading session after the U.S Department of Agriculture (USDA) said the condition of both crops in the United States is declining.
|Futures Settlement Price Tuesday, July 17, 2018|
|S & P 500||SPM18||2795.75||2815.5||2789.75||2811.25||14.5|
|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.