Daily Market View
Tuesday, October 16, 2018
| U.S Stock Market
U.S stocks dropped earlier in the session yesterday as rising tensions between Western powers and Saudi Arabia added to worries over rising borrowing costs and the impact of tariffs following the three indexes’ biggest weekly declines in over seven months. The Dow Jones Industrial Average fell 7.53 points, or 0.03 percent, at the open. The S&P 500 opened lower by 3.30 points, or 0.12 percent. The NASDAQ dropped 23.57 points, or 0.31 percent at the opening bell. U.S retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years. But other details of the report from the Commerce Department on Monday were upbeat and suggested that consumer spending ended the third quarter with strong momentum, which should provide a boost to economic growth despite anticipated drags from weak exports and a struggling housing market. Retail sales in September rose 4.7 percent from a year ago.
|Major Economic Releases for Today|
|China Producer Price Index (YoY)||01:30||3.6%||4.1%|
|China Consumer Price Index (YoY)||01:30||2.5%||2.3%|
|U.K Claimant Count Rate||08:30||2.6%|
|U.K Jobless Claims Change||08:30||8.7k|
|German ZEW Survey Expectations||09:00||-12||-10.6|
|Euro-Zone ZEW Survey (Economic Sentiment)||09:00||-7.2|
|U.S Industrial Production (MoM)||13:15||0.2%||0.4%|
|U.S NAHB Housing Market Index||14:00||67||67|
|U.S Net Long-term TIC Flows||20:00||$74.8b|
|Dow Jones Industrial Average
The Dow Jones Industrial Average declined 0.35%. The best performers of the session on the Dow Jones Industrial Average were Walgreens Boots Alliance Inc., which rose 1.66% or 1.22 points to trade at 74.72 at the close. Meanwhile, Procter & Gamble Company added 1.35% or 1.07 points to end at 80.13 and Walt Disney Company was up 0.74% or 0.83 points to 113.44 in late trade. The worst performers of the session were Cisco Systems Inc., which fell 2.28% or 1.04 points to trade at 44.67 at the close. Apple Inc. declined 2.14% or 4.75 points to end at 217.36.
The NASDAQ fell 0.88%. Top performers were Flex Pharma Inc. which rose 79.25%, Globus Maritime Ltd which was up 41.30% to settle at 6.5000 and Auris Medical Holding AG which gained 40.82% to close at 1.380. The worst performers were Soligenix Inc. which was down 26.21% to 1.0700 in late trade, Sears Holdings Corporation which lost 23.83% to settle at 0.31 and China Internet Nationwide Financial Services Inc. which was down 22.63% to 2.77 at the close.
Oil prices steadied yesterday as tension over the disappearance of a prominent Saudi journalist stoked supply worries, balancing concerns over the long-term demand outlook. Crude markets were also supported in the wake of data that showed South Korea did not import any oil from Iran in September for the first time in six years, before U.S sanctions against the Middle Eastern country take effect in November. Yesterday, Trump said he had spoken with King Salman about Khashoggi and that he was sending Secretary of State Mike Pompeo to meet the king immediately. Trump also told reporters he believes “rogue killers” may have been responsible for Khashoggi’s disappearance. The comment from the president eased nerves in the oil market by opening a potential pathway for the royal family to escape culpability. It takes some of the angst out of the market that had been built up over the weekend. Saudi Arabia has been under pressure since Khashoggi, a critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul.
|Precious and Base Metals
Gold rose more than 1 percent yesterday to its highest in about 2-1/2 months as investors sought refuge in the metal after mounting tensions between Western powers and Saudi Arabia compounded jitters in global stock markets. Spot gold was up 1 percent at $1,230.05 per ounce, having touched its highest since July 26 at $1,233.26. U.S gold futures rose 1 percent to $1,234.20. Gold has now got a stronger tailwind from a flight to safety from risky assets. Gold’s next moves will depend on how long this sell-off continues. Global stocks were under pressure, with European shares hitting 22-month lows on the back of a raft of factors including a U.S.-China trade dispute, rising tensions between Saudi Arabia and western powers, stalled Brexit negotiations and concerns over an economic slowdown in China. The International Monetary Fund said last week that risks to the global financial system, which have risen over the past six months, could increase sharply if pressures in emerging markets escalate or global trade relations worsen. On the technical front, gold broke above the 100-day moving average at around $1,227. A close above that could provide additional support. Other indicators, such as inflows into exchange-traded funds (ETFs), suggest chances of a further rebound in prices. Holdings of the largest gold-backed ETF, SPDR Gold, rose nearly 2 percent last week. That was its biggest weekly inflow since January, with the fund having registered declines of more than 4 million ounces since hitting a peak in late April. Gold, usually seen as a safe store of value during political and economic uncertainty, remains about 10 percent down from its April peak, with investors opting for the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates. Speculators meanwhile extended their net short position on Comex gold by 29,881 contracts to 103,009 contracts, CFTC data showed last week, based on the week up to Oct. 9.
Soybeans recovered after the most actively traded contract last week fell to its lowest price in nearly 10 years. Bargain buying and improving export demand helped lift soybean futures for a second consecutive session.
|Futures Settlement Price Monday, October 15, 2018|
|S & P 500||SPM18||2769.75||2778.5||2745.25||2748.75||-19.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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