Daily Market View
Thursday, August 30, 2018
| U.S Stock Market
U.S stock index futures were little changed yesterday as investors stayed focused on trade, awaiting progress on talks between the United States and Canada and eyeing next week’s deadline for consultations on the next round of China-U.S tariffs. After the United States and Mexico announced a bilateral deal on Monday, U.S-Canada is working to salvage the North American Free Trade Agreement amid signs Ottawa was open to taking a more conciliatory approach. The next round of U.S tariffs on $200 billion worth of Chinese goods are expected to take effect in late September after a public comment period ends on Sept. 5. Investors will continue to concentrate on trade talks now with Canada and the enthusiasm will continue until we get some concrete news on whether or not the U.S. and Canada reach a deal. The benchmark S&P 500 index hit record highs over the last two days after strong gains on Friday following Federal Reserve Chairman Jerome Powell’s comments and then on the U.S-Mexico trade deal on Monday.
|Major Economic Releases for Today|
|German Unemployment Change (000’s)||07:55||-8k||-6k|
|German Unemployment Claims Rate s.a.||07:55||5.2%||5.2%|
|U.K Net Consumer Credit||08:30||1.5b||1.6b|
|U.K Mortgage Approvals||08:30||65.0k||65.6k|
|German Consumer Price Index (YoY)||12:00||2.0%||2.0%|
|Canada Gross Domestic Product (YoY)||12:30||2.3%||2.6%|
|U.S Personal Income||12:30||0.4%||0.4%|
|U.S Personal Spending||12:30||0.4%||0.4%|
|U.S Initial Jobless Claims||12:30||213k||210k|
|Dow Jones Industrial Average
The Dow Jones Industrial Average gained 0.23% to hit a new 6-month high. The biggest gainers of the session on the Dow Jones Industrial Average were Microsoft Corporation, which rose 1.60% or 1.76 points to trade at 112.02 at the close. Apple Inc. added 1.49% or 3.28 points to end at 222.98 and Visa Inc. was up 1.26% or 1.83 points to 147.03 in late trade. Biggest losers included Walgreens Boots Alliance Inc., which lost 0.89% or 0.62 points to trade at 68.66 in late trade. United Technologies Corporation declined 0.65% or 0.88 points to end at 133.62 and American Express Company shed 0.53% or 0.57 points to 106.71.
The NASDAQ index gained 0.99%. The top performers on the NASDAQ were Opiant Pharmaceuticals Inc. which rose 37.64%, GreenPro Capital Corp which was up 30.11% to settle at 7.546000 and Sophiris Bio Inc which gained 24.61% to close at 3.190. The worst performers were Carver Bancorp Inc. which was down 14.46% to 4.850 in late trade, One Stop Systems Inc. which lost 11.53% to settle at 3.65 and ScanSource Inc. which was down 12.75% to 37.65 at the close.
Oil prices rose about 1 percent yesterday, supported by a drawdown in U.S crude and gasoline stockpiles and on news of falling Iranian crude shipments as U.S sanctions deter buyers. U.S. crude was 77 cents higher at $69.30 a barrel. U.S crude inventories fell 2.6 million barrels last week, the Energy Information Administration said, exceeding the 686,000-barrel draw forecast by analysts polled by Reuters. U.S crude futures bounced briefly to $69.55, their highest in three weeks, on the inventory data before retreating. Increased gasoline demand was particularly supportive to the market given that crack spreads had been weak. Iran’s crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017, preliminary trade flows data on Thomson Reuters show. Many crude buyers have already reduced orders from Iran, OPEC’s third-biggest producer, ahead of the Nov. 4 start date for U.S. sanctions. The reduction in Iranian exports implies global supply tightening.
|Precious and Base Metals
Gold climbed yesterday as funds bet prices would find short-term support at $1,200 per ounce, but a stronger dollar and expectations for increases in U.S interest rates limited gains. Spot gold was up 0.1 percent at $1,204.43 an ounce. Prices hit their highest since Aug. 10 at $1,214.28 on Tuesday but closed 0.8 percent lower as U.S. Treasuries rose after the United States and Mexico struck a trade deal. Analysts and traders are closely watching the psychologically important level of $1,200. Gold dipped below that this month for the first time since March 2017, giving it momentum to touch a low of $1,159.96. Gold is a tad higher now because we have managed to find support at $1,200 and that is attracting some intra-day bids at this stage. The market is more balanced than we have seen recently but we are still one spark short of a sustained rally here. Gold is still pinned down by a stronger dollar, which makes commodities it is priced in more expensive for holders of other currencies and can cap a rising gold market. The dollar rose as relief about a U.S.-Mexico trade deal gave way to concern among investors that the conflict over trade between the United States and China was not about to end soon. Adding to gold’s woes are expectations for further U.S. interest rate increases this year, record bets on prices falling and liquidations in exchange-traded funds (ETFs). There is still a lot of uncertainty and the monetary policy backdrop is not positive for gold prices. Higher rates would dent the appeal of non-interest yielding gold. Gold prices are on track to fall for the fifth straight month, which would make it the longest losing streak since early 2013. U.S. gold futures were down 0.3 percent at $1,210.60. Holdings in the largest gold-backed ETF, SPDR Gold Trust GLD, have declined 3.6 million ounces from a peak in late April. Spot silver was up 0.2 percent at $14.67. Copper drifted down yesterday, pressured by a recovery in the dollar and worries over softer demand from top consumer China.
Wheat futures rose nearly 4 percent yesterday on technical buying and rumors that Russia might curb wheat exports. Soybeans and corn followed wheat higher.
|Futures Settlement Price Wednesday, August 29, 2018|
|S & P 500||SPM18||2900.25||2917.25||2897.5||2914.75||15.5|
|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.