Daily Market View

Wall Street was back in aggressive sell-off mode on Friday, with major stock indices losing more than two percent following disappointing earnings announcement from Amazon and Google parent Alphabet. The Dow Jones Industrial Average fell 1.8% after earlier losing more than 2.0%, while the broad-based S&P 500 shed 2.4%. The tech-rich NASDAQ Index was down 2.1%. Both Amazon and Alphabet reported big jumps in quarterly profit but Amazon’s sales forecast for the critical holiday-shopping quarter disappointed analysts. Alphabet’s revenues in the just-finished quarter also lagged analyst forecasts. Amazon plummeted 9.2% while Alphabet slumped 4.8%. US government data, meanwhile, estimated third-quarter growth at a solid 3.5%, below the pace of the prior 4.2% quarter but better than expected. Friday’s weakness on Wall Street pushed the market back into the red where it has been for much of October, due in part to fears US corporate earnings have peaked following the one-time surge from the 2017 tax cut legislation.

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The Dow Jones Industrial Average lost 1.19% on Friday. The best performers of the session on the Dow Jones Industrial Average were Intel Corporation, which rose 3.11% or 1.38 points to trade at 45.69 at the close. Meanwhile, Walgreens Boots Alliance Inc. added 0.65% or 0.49 points to end at 76.23 and Merck & Company Inc. was up 0.63% or 0.44 points to 70.40 in late trade. The worst performers of the session were Home Depot Inc., which fell 3.82% or 6.84 points to trade at 172.23 at the close. Cisco Systems Inc. declined 2.68% or 1.22 points to end at 44.25 and American Express Company was down 2.27% or 2.35 points to 101.25.

NASDAQ 100

The tech heavy NASDAQ index fell 2.07% on Friday. The top performers on the NASDAQ were Yulong Eco-Materials Ltd which rose 66.20% to 7.180, China Recycling Energy Corp which was up 19.55% to settle at 1.5900 and MYnd Analytics Inc. which gained 24.09% to close at 1.70. The worst performers were Synergy Pharmaceuticals Inc. which was down 69.29% to 0.430 in late trade, Flex Ltd which lost 35.01% to settle at 7.09 and MoSys Inc. which was down 30.50% to 0.2648 at the close.

Oil

Crude oil futures posted their third consecutive weekly loss on Friday as the bulls that pushed oil prices to nearly four-year highs head into retreat. U.S crude ended this week down 2.2 percent and has now tumbled about 12 percent from its recent high of $86.74 on Oct. 3. Crude futures have gotten swept up in a wider stock market rout this month, with most of the losses for oil coinciding with a sell-off in equities. But the narrative driving oil prices has also flipped in recent weeks, and traders are closing out bullish bets on the commodity. At the start of October, oil prices were rising on signs that U.S. sanctions are shrinking Iran’s crude exports faster than anticipated, potentially leaving the world with a shortage of oil. The sanctions are expected to cut crude exports from Iran, OPEC’s third-biggest oil producer, by about 1 million barrels per day. But concerns about faltering demand and rising output from OPEC and Russia now have traders focused on potential oversupply.

Gold prices rose on Friday towards the three-month highs hit earlier this week as nervous investors retreated from stock markets and piled into the precious metal seen as a refuge from financial turmoil. Spot gold was up 0.3 percent at $1,235.16 an ounce having earlier this week hit $1,239.68, its highest since mid-July. It is on course for a fourth week of gains. U.S. gold futures rose 0.4 percent to $1,237.6 an ounce. Global stocks slid again on Friday and were set to post their worst weekly losing streak in more than five years. “The confusion in bond and stock markets is fuelling some interest in gold. If they continue to fall, that will give support to gold. You’ll then have trend buyers coming in and supporting the price. The bears are frightened of being caught on the wrong side. The liquidation of short positions on COMEX has the potential in the short term to drive gold up to between $1,260 and $1,270. Gold prices have gained more than 6 percent after falling to $1,159.96 an ounce in mid-August, their lowest since Jan. 2017. The release of U.S growth data earlier, which showed the economy slowed less than expected in the third quarter, had little lasting impact. Gold prices ticked down a little after the GDP report, but popped back up later. We are also seeing some more short-covering in the futures markets which is lifting prices. Investor flows into bullion, often considered a safe haven and store of value during times of financial, economic and geopolitical uncertainties, can be seen by the rise in holdings of physically-backed exchange traded products. Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, saw outflows of about 4.5 million ounces between late April and early October. Gold’s impressive performance of late, coming amid U.S. dollar strength, suggests that gold finally is behaving like a safe-haven asset.

Traditional Agricultures

Wheat futures rose nearly 4 percent in Friday’s trading session and bounced back from multi-month lows a day earlier, buoyed by short-covering and indications that wheat was becoming more competitive globally. Corn futures rose on Friday, rebounding from Thursday’s two-week low, and soybeans rallied from a one-month low.

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