Daily Market View
Thursday, July 12, 2018
| U.S Stock Market
U.S equities snapped a four-session winning streak yesterday after the President Trump administration announced new tariffs on Chinese goods, further escalating tensions between the two largest economies in the world, which some investors fear could morph into a full-on trade war. The Dow Jones Industrial Average slumped 219.21 points or 0.9%. The S&P 500 fell 19.82 points or 0.7%. Only 1 of the 11 primary S&P 500 sectors closed in the green, with materials and the industrial sectors, both of which are seen as sensitive to trade issues, among the biggest losers. The energy sector also weighed on the market, tumbling more than 2% alongside a steep drop in the price of crude-oil futures. The utility sector, up 0.9%, was the sole gainer. The NASDAQ shed 42.59 points or 0.6%. The White House late Tuesday said it would assess 10% tariffs on a further $200 billion in Chinese goods. The move is seen as deepening the rift with Beijing and sending a message to other trading partners that the U.S. is willing to escalate a trade fight.
|Major Economic Releases for Today|
|German Consumer Price Index (YoY)||06:00||2.1%||2.1%|
||Bank of England Credit Conditions & Bank Liabilities Surveys||08:30|
|Euro-Zone Industrial Production w.d.a. (YoY)||09:00||2.3%||1.7%|
|Canada New Housing Price Index (YoY)||12:30||1.0%||1.6%|
|U.S Initial Jobless Claims||12:30||225k||231k|
|U.S Consumer Price Index (YoY)||12:30||2.9%||2.8%|
|U.S Real Avg Weekly Earnings (YoY)||12:30||0.3%|
|U.S Real Avg Hourly Earnings (YoY)||12:30||0.0%|
|U.S Monthly Budget Statement||18:00||-$80.0b||-$146.8b|
|Dow Jones Industrial Average
The Dow Jones Industrial Average lost 0.88% yesterday. The best performers of the session on the Dow Jones Industrial Average were Walt Disney Company, which rose 1.90% or 2.01 points to trade at 108.04 at the close. Meanwhile, Visa Inc. added 1.07% or 1.46 points to end at 138.15 and American Express Company was up 0.39% or 0.39 points to 100.30 in late trade. The worst performers of the session were Chevron Corp, which fell 3.19% or 4.07 points to trade at 123.52 at the close. Caterpillar Inc. declined 3.18% or 4.49 points to end at 136.76 and Dow DuPont Inc. was down 2.23% or 1.51 points to 66.30.
The tech heavy NASDAQ index lost 0.55% yesterday. The top performers on the NASDAQ Composite were Biocept Inc. which rose 115.22% to 7.920, Myos Rens Technology Inc. which was up 38.19% to settle at 1.990 and Pioneer Pow which gained 7.00% to close at 5.35. The worst performers were Simulations Plus Inc. which was down 21.71% to 17.85 in late trade, Staffing 360 Solutions Inc. which lost 20.61% to settle at 2.850 and Idera Pharmaceuticals Inc. which was down 20.44% to 1.090 at the close.
Oil prices went into free fall yesterday, plunging on a raft of bearish news and posting their worst performance in over a year. Crude futures briefly pared losses in morning trade after the U.S. government reported a huge 12.6 million-barrel drop in crude stockpiles, but the market quickly shrugged off the weekly data. Instead, traders were focused on supply concerns as Libya resolved a major disruption to its crude exports and Saudi Arabia reported a big jump in output for June. Meanwhile, renewed trade tensions weighed on market sentiment. U.S. light crude ended Wednesday’s session down $3.73, or 5 percent, at $70.38 a barrel. That marked its biggest daily drop since June 2017. Oil prices fell along with stock markets and other commodities after the Trump administration threatened to slap tariffs on another $200 billion in Chinese goods. The prospect of a worsening trade war has raised fears of slower global growth that could clip demand for oil.
|Precious and Base Metals
Gold prices slipped yesterday as U.S threats of tariffs on an additional $200 billion of Chinese goods pushed safe-haven flows to the dollar and dashed hopes that Washington will eventually step back from the escalating row. U.S President Donald Trump detailed overnight a list of Chinese products that could face 10 percent tariffs. The clock now starts ticking on a two-month period of public comment before the levies are imposed. The news sent the U.S. dollar to an 11-month high versus the yuan and hit the Australian dollar, but left the euro largely unmoved. A strong greenback makes U.S. dollar-priced gold costlier for non-American investors. Gold options keep getting higher and higher, which means people are positioned for prices to rise. It tells us there is overhanging positive sentiment to gold but right now the money is sitting on the sidelines. Spot gold was 0.5 percent lower at $1,249.74 an ounce. In the previous session, bullion hit a one-week low at $1,246.81. U.S gold futures for August delivery were 0.5 percent lower at $1,249.80 an ounce. The news of more possible U.S. tariffs on China comes days after Washington imposed 25 percent duties on $34 billion of Chinese imports, and Beijing responded immediately with matching levies on the same amount of U.S exports to China. Spot gold may break support at $1,247 per ounce and fall more towards the next support at $1,237 as it has completed a bounce from the July 3 low of $1,237.32. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 0.22 percent to 799.02 tonnes on Tuesday. Silver shed 0.9 percent to $15.91 an ounce and platinum was 0.8 percent lower at $835.25 per ounce. Earlier in the session, both metals fell to their lowest since July 3. In the wider markets, global stocks fell while metals slumped to their lowest in a year on fears of a trade war. Falling equities, seen as risky assets, usually help gold, a traditional safe haven.
Wheat, Corn, and Soybeans
Soybean futures fell yesterday, with corn setting fresh contract lows, as favorable U.S crop conditions and concern about a deepening trade dispute between the United States and China weighed on prices. The USDA lowered its crop condition ratings for corn and soybeans only slightly for the past week.
|Futures Settlement Price Wednesday, July 11, 2018|
|S & P 500||SPM18||2781||2787.5||2765.75||2773.75||-22.75|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
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