Commodities
Dow Jones and S&P 500 are down 0.3-0.5%. Nasdaq is on the weak side
The U.S. stock indexes Dow Jones Industrial Average and S&P 500 ended Thursday trading lower but well above intraday lows, while the Nasdaq Composite came out with a small plus.
Traders were assessing the prospects of the Federal Reserve (Fed) raising the benchmark interest rate at its July meeting, as well as U.S. bank reports for the past quarter.
U.S. Labor Department data published on Wednesday, which showed an increase in inflation in the country to a maximum of nearly 41 years, 9.1%, led investors to revise their forecasts about the pace of the Fed’s rate hike. At first, the rate futures quotes showed that traders were 85% confident in the likelihood of the U.S. Central Bank rate hike by 100 basis points (bps) in July.
However, Fed Board of Governors member Christopher Waller said that the market may be “getting a little ahead of itself” by expecting a 100bp rate hike. He noted that he still favors a 75-bp rate hike in July, but acknowledged that economic data to be released shortly could change his mind in favor of a sharper hike.
“If this data turns out to be substantially stronger than expected, I might lean toward a larger rate hike in July because it would mean that demand in the economy is not weakening fast enough to contain inflation,” he said.
Following Waller’s statements, the futures market’s estimate of the chances of a rate hike of 100 bps in July dropped to 42%; Market Watch notes. On Friday, the University of Michigan will release the preliminary value of its consumer confidence index for July. The index fell to a record low of 50 points in June.
The University of Michigan data also includes trends in Americans’ inflation expectations, which last month stood at 5.3 percent for the medium term (next year) and 3.1 percent for the long term (five years). “We’re waiting on this data to see if inflation expectations in the U.S. have strengthened,” notes LPL Financial analyst Quincy Crosby. – If they rise, the Fed will probably discuss a 100-bp rate hike. Or the central bank will have to hike the rate at a 75-bp pace longer than it anticipated.”
Data released Thursday showed an acceleration in U.S. producer price growth in June to 11.3 percent annualized from 10.9 percent a month earlier. The rate of increase in producer prices reached a record 11.6% in March of this year. Negative for the market Thursday were weak financial reports from banks JPMorgan Chase & Co. and Morgan Stanley for the past quarter.
“High inflation, weakening consumer confidence, uncertainty about how high rates will be raised and unprecedented quantitative tightening and its impact on global liquidity are very likely to have a negative impact on the global economy,” said JPMorgan Chief Executive James Dimon. – We’re prepared for whatever happens.”
- The Dow Jones Industrial Average index fell 142.62 points (0.46%) to 30630.17 points in trading Thursday.
- Standard & Poor’s 500 fell 11.4 points (0.3%) to 3,790.38 points.
- The Nasdaq Composite rose 3.6 points (0.03%) to 11251.19 points.
The decline in net income at JPMorgan, the largest U.S. bank, by assets, exceeded analysts’ forecasts. In addition, the financial institution said it was suspending its share buybacks. Morgan Stanley also reported weaker-than-expected quarterly adjusted earnings and revenue. JPMorgan’s shares fell 3.5% in trading on Thursday, while Morgan Stanley’s fell 0.4%.
Conagra Brands, a prepared foods maker, fell 7.3 percent. The company nearly halved its net income in the fourth quarter of fiscal 2022, and its revenue was worse than market forecasts.
Shares of Cisco Systems Inc. fell 0.9 percent after experts at JPMorgan cut recommendations for the securities of the U.S. network equipment maker to “neutral” from “above market. The bank also lowered its outlook on Cisco shares to $51 from $62.
The value of Tesla Inc. securities rose by 0.5%. The day before, it became known that Andrei Karpaty, director of artificial intelligence and head of the development group for autopilot in cars, Tesla, left the company.
Citigroup Inc. and Wells Fargo & Co. will publish their results for the past quarter on Friday. The consensus forecast by analysts surveyed by FactSet suggests that S&P 500 index companies’ overall earnings rose an average of 4.3% in the past quarter, the slowest pace since late 2020.
Investing.com– Gold prices fell slightly in Asian trade on Tuesday but remained close to recent peaks as traders awaited key U.S. inflation data for more cues on the Federal Reserve’s plans to begin cutting interest rates.
The yellow metal benefited from safe haven buying following a severe risk-off move across markets last week, which was triggered by concerns over slowing economic growth.
Spot prices came within spitting distance of a record high on Friday, but then pulled back as the advanced ahead of this week’s inflation reading.
fell 0.1% to $2,502.07 an ounce, while expiring in December fell 0.1% to $2,531.0 an ounce by 00:22 ET (04:22 GMT).
Gold steady with Inflation, Fed meeting in sight
Focus this week is squarely on inflation data, due on Wednesday, for more cues on the U.S. economy.
Any signs of cooling inflation are likely to spur increased bets on lower interest rates in the coming months- a scenario that bodes well for gold.
Wednesday’s inflation reading comes just a week before a , where the central bank is widely expected to cut interest rates by 25 basis points.
Expectations of the September cut were also a key driver of gold’s recent gains, given that the cut is likely to kick off an easing cycle by the Fed.
Lower rates bode well for gold, given that they reduce the opportunity cost of investing in the yellow metal.
Other precious metals fell on Tuesday, having largely lagged gold in recent weeks. fell 0.1% to $945.0 an ounce, while fell 0.2% to $28.590 an ounce.
Copper edges lower, Chinese trade data brings little cheer
Among industrial metals, prices retreated on Tuesday, taking little support from data that showed some economic resilience in top importer China.
China’s unexpectedly grew in August on strength in the country’s . But laggard offset cheer over this trend, given that they signaled sluggish demand in the country.
China’s overall copper imports shrank 12.3% year-on-year in August, although they were still in positive territory for the first eight months of the year.
The soft import data came following a string of weak readings on China’s economy over the past week, which raised concerns over slowing growth in the world’s biggest copper importer.
The data, coupled with a broader risk-off move in global markets, saw copper nursing steep losses over the past week.
Investing.com– Oil prices steadied in Asian trade on Tuesday as traders sought to gauge the impact of Tropical Storm Francine on U.S. oil production, while concerns over sluggish demand remained in play.
Prices were nursing steep losses from the prior week amid renewed concerns that global oil demand will slow, especially following middling economic readings from top importer China. The prospect of oversupply and increased production also weighed.
But oil prices rebounded on Monday as sentiment improved.
expiring in November were flat at $71.86 a barrel, while steadied at $67.90 a barrel by 22:37ET (02:37 GMT).
Tropical storm Francine set to batter Gulf of Mexico
A slew of oil companies were seen stopping production and refining activities in the Gulf of Mexico as Tropical Storm Francine made its way towards the U.S. mid-South.
The storm is expected to potentially strengthen into a hurricane before making landfall, and is expected to lash the upper Texas and Louisiana coasts with heavy rain and gale winds this week.
The storm could potentially cause extended disruptions in the energy-rich Gulf of Mexico, reducing crude supplies in North America and presenting a tighter near-term outlook for oil markets.
This notion offered oil markets some support, helping them recover a measure of bruising losses logged last week.
Oil battered by demand concerns, China woes
Oil prices were nursing steep losses in recent sessions as markets fretted over slowing demand, especially in top crude importer China.
A string of weak economic readings from the country for August drummed up concerns over slowing growth, as did signs that increasing electric vehicle adoption was also denting fuel demand.
Beyond China, caution over U.S. interest rates also weighed on oil markets, especially ahead of key inflation data due later this week.
The inflation reading comes just a week before a Federal Reserve meeting, where the central bank is widely expected to cut interest rates by 25 basis points.
By Ahmad Ghaddar
LONDON (Reuters) -Oil prices gave up the previous day’s gains on Tuesday as a weaker demand outlook offset U.S. supply disruptions from Tropical Storm Francine and global oil oversupply risks that continue to weigh on the market.
futures were down 95 cents, or 1.3%, at $70.89 a barrel by 1214 GMT. U.S. West Texas Intermediate crude lost 96 cents, or 1.4%, to $67.75.
Both benchmarks had risen about 1% on Monday.
The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report on Tuesday that global oil demand will rise by 2.03 million barrels per day (bpd) in 2024, down from previously projected growth of 2.11 million bpd.
OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd.
The weakening global demand prospects and expectations of oil oversupply kept the market suppressed.
Chinese data on Monday showed consumer inflation accelerated in August to its fastest in half a year, though domestic demand remained fragile, and producer price deflation worsened.
And while data released on Tuesday showed China’s exports grew at their fastest in nearly 1-1/2 years in August, imports disappointed against a backdrop of depressed domestic demand.
“The message from China is simple but loud and reverberates throughout the globe,” said PVM Oil analyst Tamas Varga, adding that the country is struggling to encourage spending and boost sluggish demand.
Meanwhile, the U.S. Coast Guard ordered the closure of all operations at Brownsville and other small Texas ports on Monday evening as Tropical Storm Francine barrelled across the Gulf of Mexico. Corpus Christi port remained open with restrictions.
The tropical storm is forecast to strengthen significantly and become a hurricane on Tuesday, according to the National Hurricane Center (NHC).
Exxon Mobil (NYSE:) said it shut in output at its Hoover offshore production platform while Shell (LON:) paused drilling operations at two platforms. Chevron (NYSE:) also began shutting in oil and gas output at two of its offshore platforms.
The U.S. Energy Information Administration is due to publish its short-term energy outlook, with forecasts for the global market and oil output.
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Forex2 years ago
Unbiased review of Pocket Option broker
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
