Daily Market View
Tuesday, August 07, 2018
| U.S Stock Market
U.S stocks finished higher yesterday, with the NASDAQ rising for a fifth straight day as investors focused on healthy corporate earnings, which have so far helped to buoy the market over recent sessions. Technology and consumer discretionary stocks led the gains, underpinning the market’s move higher. However, trade-related worries lingered as the U.S continued to clash with its global counterparts over tariffs. The S&P 500 index rose 10.05 points, or 0.4%, with nine of its 11 main sectors closing in positive territory. The NASDAQ Index gained 47.66 points, or 0.6% and the Dow Jones advanced 39.60 points, or 0.2%. Investors continued to weigh solid earnings against repercussions of retaliatory tariffs from trading partners and their impact on financial markets. Last week, China announced tariffs on $60 billion of U.S. products in response to the U.S.’s planned 25% tariffs on $200 billion of Chinese imports. On Sunday, President Donald Trump tweeted that tariffs are “working big time.” Elsewhere, data showed German manufacturing orders plunged 4% in June.
|Major Economic Releases for Today|
|Japan Labor Cash Earnings (YoY)||00:00||1.7%||2.1%|
|Australia RBA Cash Rate Target||04:30||1.50%||1.50%|
|German Trade Balance||06:00||20.8b||19.7b|
|German Industrial Production n.s.a. and w.d.a. (YoY)||06:00||3.0%||3.1%|
|Switzerland UBS Real Estate Bubble Index||06:00||1.1|
|U.K Halifax House Prices (MoM)||07:30||0.2%||0.3%|
|U.S JOLTS Job Openings||14:00||6625||6638|
|U.S Consumer Credit||19:00||$15.0b||$24.559b|
|Japan Trade Balance – BOP Basis (Yen)||23:50||¥822.0b||-¥303.8b|
|Dow Jones Industrial Average
The Dow Jones Industrial Average rose 0.16% yesterday. The biggest gainers of the session on the Dow Jones Industrial Average were International Business Machines, which rose 3.32% or 4.74 points to trade at 147.70 at the close. Pfizer Inc. added 2.24% or 0.89 points to end at 40.54 and Walt Disney Company was up 1.19% or 1.34 points to 114.09 in late trade. Biggest losers included Boeing Co, which lost 0.37% or 1.29 points to trade at 348.44 in late trade. United Technologies Corporation declined 0.17% or 0.23 points to end at 133.89 and Home Depot Inc. shed 0.01% or 0.02 points to 195.64.
The tech heavy NASDAQ index climbed 0.61% yesterday. The top performers on the NASDAQ Composite were Oxbridge Re Holdings Ltd which rose 31.43% to 2.30, Pixelworks Inc. which was up 28.99% to settle at 4.205 and Universal Electronics Inc. which gained 26.26% to close at 44.95. The worst performers were Helios and Matheson Analytics Inc. which was down 30.00% to 0.070 in late trade, Varex Imaging Corp which lost 26.32% to settle at 28.36 and Immersion Corporation which was down 24.24% to 10.78 at the close.
Oil futures gained yesterday after OPEC sources said Saudi crude production unexpectedly fell in July, raising concerns about global oil supplies as the United States prepares to reinstate sanctions against major exporter Iran. U.S. West Texas Intermediate (WTI) crude futures rose 52 cents to settle at $69.01 a barrel. Saudi Arabia pumped around 10.29 million barrels per day (bpd) of crude in July, two sources at the Organization of the Petroleum Exporting Countries said on Friday, down about 200,000 bpd from June. That came despite a pledge by the Saudis and top producer Russia in June to raise output from July, with Saudi Arabia promising a “measurable” supply boost. Prices had dropped recently assuming that Saudi was going to continue to produce. Brent oil prices have fallen 6.5 percent in July, their steepest monthly drop since July 2016. The United States also plans to re-introduce sanctions on Iranian oil in November.
|Precious and Base Metals
Gold prices fell yesterday under pressure as a firmer dollar and expectations for further interest rate hikes by the U.S. Federal Reserve offset U.S. ‘snapback’ sanctions targeting the purchase of precious metals. Overall the bears remain in control and they continue to increase their short positions – both the net and gross are hitting records. Hedge funds and money managers added 13,931 contracts to their net short position in the week to July 31, bringing it to 41,087 contracts, the biggest since records became publicly available in 2006. Spot gold was down 0.32 percent at $1,209.18 an ounce. U.S gold futures for December delivery settled down $5.50, or 0.5 percent, at $1,217.70 per ounce. The Trump administration will aggressively enforce economic sanctions that it is re-imposing on Iran this week and expects the measures to have a significant impact on the Iranian economy, senior U.S. administration officials said. Those sanctions include precious metals, U.S. bank notes, steel and coal. People in Iran are buying gold to shore up their currency. But that demand in Iran has not offset the selling of gold in the Western countries because of the higher (U.S.) interest rates and the higher U.S Dollar. Gold is sensitive to higher U.S. interest rates, because it costs to store and does not draw interest payments. The dollar rose against a basket of currencies, building on two consecutive weeks of gains, as investors bet that trade war rhetoric and a strong U.S. economy would continue to drive the currency higher. Investors have largely been buying the dollar as a safe haven asset rather than gold as the U.S.-China trade dispute escalates. China proposed retaliatory tariffs on $60 billion of U.S. goods on Friday, after U.S. President Donald Trump’s administration proposed a higher, 25 percent tariff on $200 billion of Chinese imports. Silver prices fell 0.3 percent to $15.33 an ounce. Silver is doing reasonably well. Normally we’d find silver underperforming when gold is sold off, but the selling appetite seems to be relatively muted.
Soybeans edged lower yesterday as an escalation in the trade war between Washington and Beijing stoked fears for sales of U.S soybeans to China, which imported around $12 billion of the oilseed last year.
|Futures Settlement Price Monday, August 06, 2018|
|S & P 500||SPM18||2841.25||2853.25||2835||2850.5||10|
|Daily Swings (The Pivot Levels)|
Source: – News & Quotes (Courtesy: Reuters)
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.