Daily Market View
Tuesday, June 26, 2018
| U.S Stock Market
U.S stocks plummeted yesterday, with major indexes seeing their biggest one-day drop in months and the Dow set to close below a closely watched level as fresh threats from President Donald Trump against the U.S.’s trading partners undercut investor sentiment. The day’s losses were widespread, with 26 of the Dow’s 30 components trading lower, along with nine of the 11 primary S&P 500 sectors. Tech was the biggest decliner of the day, however, dropping 3% in its biggest one-day decline since March. The Dow Jones Industrial Average tumbled 420 points, or 1.7%. The blue-chip average was on track for its biggest one-day drop since April 6, and the day’s decline put it on track to at its lowest level since May 3. The Dow is also set to end below its 200-day moving average for the first time in about two years. The moving average is a closely watched gauge of an asset’s long-term momentum trends, and while the Dow has dipped below it on an intraday basis two other times in 2018, it rebounded above it both times. Finishing below it could be a sign that more selling is in store.
|Major Economic Releases for Today|
|U.K BBA Loans for House Purchase||08:30||38250||38049|
|U.K CBI Reported Sales||10:00||11||11|
||ECB Vice President De Guindos Speaks in Frankfurt||12:00|
|S&P CoreLogic CS 20-City (MoM) SA||13:00||0.4%||0.53%|
|S&P/Case-Shiller Composite-20 (YoY)||13:00||6.8%||6.79%|
|S&P/Case-Shiller US Home Price Index (YoY)||13:00||6.53%|
|U.S Richmond Fed Manufact. Index||14:00||15||16|
|U.S Consumer Confidence Index||14:00||128||128|
|U.S Conf. Board Present Situation||14:00||161.7|
|Dow Jones Industrial Average
The Dow Jones Industrial Average fell 1.33% to hit a new 1-month low yesterday. The best performers of the session on the Dow Jones Industrial Average were Walmart Inc., which rose 1.95% or 1.65 points to trade at 86.47 at the close. Meanwhile, American Express Company added 1.35% or 1.31 points to end at 98.54 and Coca-Cola Company was up 0.76% or 0.33 points to 43.58 in late trade. The worst performers of the session were Intel Corporation, which fell 3.41% or 1.79 points to trade at 50.71 at the close. Visa Inc. declined 3.25% or 4.40 points to end at 130.93 and McDonald’s Corporation was down 2.88% or 4.74 points to 159.81.
The NASDAQ index lost 2.09% yesterday. The top performers on the NASDAQ were Xenetic Biosciences Inc. which rose 103.90% to 5.750, Ability Inc. which was up 98.41% to settle at 10.00 and Innovate Biopharmaceuticals Inc. which gained 39.48% to close at 18.76. The worst performers were Merrimack Pharmaceuticals Inc. which was down 43.83% to 5.140 in late trade, Sophiris Bio Inc. which lost 40.27% to settle at 2.240 and Erytech Pharma SA ADR which was down 28.97% to 12.75 at the close.
Oil fell yesterday as investors prepared for an extra 1 million barrels per day (bpd) of oil to hit the markets after OPEC agreed to raise production and as U.S equity markets slipped on trade war fears. U.S. light crude retreated after an early rise to trade down 41 cents to $68.17 a barrel. Losses in U.S. crude prices were limited by the likelihood that an outage at Syncrude Canada’s 360,000 barrel per day oil sands facility would last through July. The outage is expected to limit crude arriving at Cushing, Oklahoma, delivery point of the U.S. futures contract. This helped further shrink U.S. crude’s discount to global benchmark Brent to as small as $4.78. The spread had widened to as much as $11.57 on June 1, but had been contracting ahead of OPEC’s expected supply increase, analysts said. The slide on Wall Street pressured oil, analysts said. All three major stock indexes were down on escalating U.S.-China trade tensions.
|Precious and Base Metals
Gold hovered near last week’s six-month low yesterday as investors flocked to U.S Treasuries rather than bullion, amid concerns over a global trade war ratcheting higher after a report said the United States plans to bar Chinese companies from investing in its technology firms. Spot gold was down 0.2 percent at $1,266.29 per ounce. U.S. gold futures for August delivery settled down $1.80, or 0.1 percent, at $1,268.90 per ounce. The U.S. Treasury Department is crafting rules that would block firms with at least 25 percent Chinese ownership from buying U.S. companies involved in “industrially significant technology,” The Wall Street Journal reported on Sunday. Gold, which is traditionally seen as a safe haven in times of geopolitical uncertainty, has failed to benefit as investors poured into U.S. Treasury debt. Right now, the flight-to-quality money is going into the bonds. Commodities on a whole are being pulled back with the threat of tariffs. The U.S. Treasury yield curve flattened to its lowest level in over 10 years as concerns about trade wars and divisions within the euro zone boosted demand for longer-dated, safe-haven debt. Higher U.S. bond yields make gold a less attractive investment since it does not bear interest. But some analysts say the standoff between the world’s two largest economies, which threatens to limit global economic growth, could eventually benefit gold. Today on a relative basis, gold is performing better than commodities and equities. Global shares fell on escalating trade tensions and the dollar index turned softer against a basket of currencies. The fundamental dynamics suggest gold will remain under pressure until there is a discernible reversal in dollar sentiment. We are seeing some support lining up at the $1,265 level, with upward momentum capped at the $1,278 area. Meanwhile, silver fell 0.8 percent at $16.31 an ounce. Copper prices fell to the lowest close in almost three months as tension between the U.S. and China continued to unsettle investors.
Wheat, Corn, and Soybeans
Wheat slid 2 percent yesterday as rain expected in parched growing belts in Australia tempered concerns about global supply risks and shifted attention to broader worries about trade tensions.
|Futures Settlement Price Monday, June 25, 2018|
|S & P 500||SPM18||2756.75||2757.75||2700.5||2722.25||-37.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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