Daily Market View
Wednesday, October 10, 2018
| U.S Stock Market
Global stocks extended declines yesterday, taking European markets past a six month and pulling U.S. equity futures into the red, following a downbeat assessment of world economic growth from the International Monetary Fund and a renewed rise in U.S. government bond yields ahead of a three-day series of auctions from the Treasury that will add $230 billion to an already-stressed bond market. The IMF said trade tensions between Washington and Beijing, alongside tighter financing conditions in emerging markets and uncertainty in Europe, will weigh on growth this year and next, while the bump from fiscal stimulus in the United States will fade just as higher borrowing costs begin to crimp consumer demand in the red-hot U.S economy. Technology stocks rebounded from a three-day rout but couldn’t lead the broader market higher. The NASDAQ 100 Index, which lost nearly 4 percent over the previous three sessions, was higher but retreated from a 1 percent increase earlier in the day.
|Major Economic Releases for Today|
|Japan Machine Tool Orders (YoY)||06:00||5.1%|
|U.K Trade Balance||08:30||-£1150||-£111|
|U.K Visible Trade Balance (Pounds)||08:30||-£10900||-£9973|
|U.K Industrial Production (YoY)||08:30||1.0%||0.9%|
|U.K Manufacturing Production (YoY)||08:30||1.1%||1.1%|
|U.K Gross Domestic Product (MoM)||08:30||0.1%||0.3%|
|U.S MBA Mortgage Applications||11:00||0.0%|
|Canada Building Permits (MoM)||12:30||-0.5%||-0.1%|
|U.S Producer Price Index Final Demand (YoY)||12:30||2.7%||2.8%|
|Dow Jones Industrial Average
The Dow Jones Industrial Average fell 0.21%. The best performers of the session on the Dow Jones Industrial Average were Walmart Inc., which rose 2.52% or 2.39 points to trade at 97.08 at the close. Meanwhile, Chevron Corp added 1.59% or 1.98 points to end at 126.82 and Apple Inc. was up 1.39% or 3.10 points to 226.87 in late trade. The worst performers of the session were DowDuPont Inc., which fell 3.67% or 2.32 points to trade at 60.84 at the close. United Technologies Corporation declined 2.66% or 3.71 points to end at 135.88 and Caterpillar Inc. was down 2.54% or 3.89 points to 149.46.
The tech heavy NASDAQ index gained 0.03%. The top performers on the NASDAQ Composite were Youngevity International Inc. which rose 66.01% to 10.160, One Horizon Group Inc. which was up 65.25% to settle at 0.3900 and Agile Thrpe which gained 53.71% to close at 0.71. The worst performers were Trevena Inc. which was down 64.09% to 1.07 in late trade, Arbutus Biopharma Corp which lost 33.99% to settle at 6.000 and Affimed NV which was down 24.41% to 3.500 at the close.
Oil prices rose in yesterday’s trading session on growing evidence of falling crude exports from Iran and as nearly one-fifth of daily oil production was lost from offshore Gulf of Mexico wells due to Hurricane Michael. U.S. West Texas Intermediate crude settled 67 cents, or nearly 1 percent, higher at $74.96. WTI hit $76.90, a nearly four-year high last week. The oil market mood is exceptionally bullish, with fears growing that the U.S demands for an Iran oil embargo could cause a significant supply shortfall. Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of U.S sanctions that take effect on Nov. 4. Iran exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed. An industry source who also tracks exports said October shipments were so far below 1 million bpd. That is down from at least 2.5 million bpd in April.
|Precious and Base Metals
Gold prices eased for a second session yesterday as a stronger dollar and bullish U.S interest rate outlook outweighed support from an earlier equity market sell-off. Spot gold was down 0.1 percent at $1,186.06 per ounce. On Monday, it fell 1.2 percent in its biggest one-day percentage fall since Aug. 15, also touching a more than one-week low of $1,183.19. U.S. gold futures edged 0.1 percent higher to $1,189.80. Europe battled to fend off a four-day losing streak for world stocks, after weary investors saw Asian shares stumble to a 17-month low and bond markets hit by a fresh bout of selling. Adding to the bleak outlook, the International Monetary Fund on Tuesday cut its global economic growth forecast for the first time since 2016, citing pressures from ongoing trade tussles between the United States and China. Some of the main themes in gold markets are the U.S. Federal Reserve rate hike, higher yields and dollar strength. At the same time, fragile emerging markets and higher oil prices will mitigate those headwinds. Gold has held in a $34 range for the last 1-1/2 months, which some analysts say suggests resilience, supported by concerns over economic growth in emerging markets and inflationary pressures from rising U.S. Treasury yields and soaring oil prices. Monday’s drop in prices triggered some physical demand for gold in China, the world’s biggest consumer. However, the metal has lost much of its safe-haven appeal this year with investors increasingly opting for the greenback instead, as expectations of further U.S interest rate hikes make gold less attractive. Higher interest rates boost the dollar and push bond yields up, putting pressure on gold by increasing the opportunity cost of holding non-yielding bullion. The monetary policy by the Fed is dominating the whole equation, putting downward pressure on gold. The Fed increased interest rates last month for the third time this year and is widely expected to hike again in December, with no suggestion the central bank’s tightening policy will end any time soon.
Soybean futures gained more ground to trade near last session’s six-week high as rains in parts of the U.S Midwest threatened to slow the harvest and reduce crop quality.
|Futures Settlement Price Tuesday, October 09, 2018|
|S & P 500||SPM18||2892.25||2899.75||2874.5||2887.75||-6|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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