Daily Market View
Thursday, December 06, 2018
| U.S Stock Market
U.S stock futures closed higher yesterday, pointing to a slight rebound from the steep losses seen in regular trading. Dow Jones Industrial Average futures climbed 110 points, indicating a gain of 113.93 points. S&P 500 and NASDAQ 100 futures also pointed to slight gains. U.S stock futures closed earlier on Tuesday out of respect for former President George H.W. Bush’s funeral. The U.S stock market was also closed yesterday. The Dow Jones Industrial Average plunged 799.36 points on Tuesday, while the S&P 500 dropped more than 3 percent. The NASDAQA, meanwhile, fell 3.8 percent to close in correction territory. The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers. Stocks began falling to their lows of the day after Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy “is poised to weaken.”
|Major Economic Releases for Today|
|U.S Challenger Job Cuts (YoY)||12:30||153.6%|
|U.S Trade Balance||13:30||-$55.0b||-$54.0b|
|U.S Initial Jobless Claims||13:30||225k||234k|
|U.S Continuing Claims||13:30||1695k||1710k|
|U.S ISM Non-Manufacturing/Services Composite||15:00||59||60.3|
|U.S Factory Orders||15:00||-2.0%||0.7%|
|U.S Durable Goods Orders||15:00||-2.4%||-4.4%|
|DOE U.S. Crude Oil Inventories||16:00||3577k|
||U.S Powell Gives Brief Welcome Remarks at Housing Conference||23:45|
|Dow Jones Industrial Average
Dow Jones futures fell earlier in the session, after the arrest of the CFO of Chinese telecom gear giant Huawei. Canada’s arrest, at the behest of the U.S, enraged China. Investors can find parallels to the current choppy stock market rally from this past spring and summer. But there are key differences that aren’t encouraging. Long-term support lines are acting as resistance. Stock market rallies are short-lived, while the stock market struggles to make higher highs. Apple and FANG stocks Facebook, Amazon.com, Netflix and Google parent Alphabet are all in worse shape than earlier this year.
The tech-heavy NASDAQ index fell nearly 4 percent on Tuesday, with tech stocks like Apple, Amazon, Alphabet and Facebook weighing most heavily. The losses extend pain periods for Apple, which has seen downturn in recent weeks, and Facebook, which is suffering a down year on the heels of several scandals.
Oil prices edged higher yesterday as global investors’ awaited clarity on a possible, but far-from-assured, output cut by major producers gathering in Vienna. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, or JMMC, which includes the Organization of the Petroleum Exporting Countries member Saudi Arabia and nonmember Russia, met yesterday. It recommended a production cut from the September-October output levels, Oman’s oil minister told reporters, according to Dow Jones. The minister also said Russia agreed on the need for an output cut. OPEC will hold its official meeting today, with another key meeting between the group’s members and nonmember allies to be held Friday. Saudi Arabia’s oil minister had cast fresh doubt on whether that production-cut agreement would be reached by OPEC, plus Russia and other producers, in Vienna today, the Wall Street Journal reported, citing news reports from the region. West Texas Intermediate crude for January delivery tacked on 15 cents, or 0.3%, at $53.40 a barrel on the New York Mercantile Exchange. The contract tumbled 22% in November, the biggest monthly fall since October 2008.
|Precious and Base Metals
Gold prices edged lower yesterday, a day after hitting their highest level in more than five weeks, as comments from a Federal Reserve official kept alive the prospect of gradually rising U.S interest rates. Meanwhile, palladium hit a new record high of $1,263.44 an ounce, widening its premium over gold to around $25, helped by a sustained supply deficit and increased speculative interest. It was 2.1 percent higher at $1,259.05 per ounce. Spot gold was down 0.1 percent at $1,237.31 per ounce, after hitting its highest since Oct. 26 at $1,241.86 on Tuesday. U.S gold futures were down 0.3 percent at $1,243.20 per ounce. The U.S Federal Reserve talking about the gradual increase in rates is going against some of the expectations that have been building up recently. The U.S central bank has increased interest rates three times this year but concerns about weaker growth have stoked bets that the Fed will end its tightening campaign sooner than previously thought. However, New York Fed President John Williams on Tuesday said the Federal Reserve should expect to continue raising interest rates “over the next year or so” even while it pays close attention to possible risks highlighted by financial markets. The central bank is widely expected to raise rates at its policy meeting on Dec. 18-19 and investors are keeping a close eye on signals for the future path of interest rates next year. Higher interest rates increase the opportunity cost of holding non-yielding bullion. World stocks tumbled to one-week lows yesterday, as declines by long-dated U.S. bond yields and a renewal of trade concerns stoked fears of a downturn in the United States, the world’s biggest economy, and pressured the dollar. Gold prices have recovered about 7 percent from 19-month lows hit in mid-August. The momentum certainly appears to be with the bulls at the moment, especially if the dollar remains under pressure in the aftermath of the trade war truce. Spot silver was steady at$14.52 per ounce.
Soybeans inched lower, consolidating after multi-month highs this week as investors sought clues as to whether a truce between Washington and Beijing in their trade dispute would revive U.S soybean sales to China.
|Futures Settlement Price Wednesday, December 05, 2018|
|S & P 500||SPM18||2699.5||2720.5||2698||2717.75||16|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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