North American News
US stocks end the session mixed but well off highs for the day
- Healthcare, consumer discretionary, and real estate lag. Energy, financials and industrials rise
The major US stock indices are ending the day with mixed results. The Dow industrial average eked out a small gain, but the S&P and NASDAQ index both closed in the red after giving up solid gains.
- The S&P traded up as high as 1.14% intraday, while the NASDAQ index was up 1.33% at its highs.
- The Dow industrial average was up as high as 1.03% and is closing just above unchanged.
- The Russell 2000 of small-cap stocks has also closing marginally higher.
The final numbers are showing:
- Dow industrial average rose 27.60 points or 0.08% at 3337.12
- S&P index fell -2.9 points or -0.07% at 4207.36
- NASDAQ index fell -74.88 points or -0.58% at 12779.92
- Russell 2000 rose 6.01 points 0.31% at 1975.25
The S&P sectors were led by energy (+3.7%), financials (+1.1%), and industrials (+0.6%). The laggards included healthcare (-0.7%), consumer discretionary’s (-0.6%) and real estate (-0.6%).
US sells 30-year bonds at 3.106% vs 3.095% WI
- US Treasury sells $21 billion in 30-year bonds
- Prior was 3.115%
Just before the sale, 30 years were trading at 3.11% in the cash market and 3.095% in the when-issued, which about 10 bps lower than 2s. You gotta be awfully worried about reinvestment risk to be buying the long end here.
The tail of 1.1 bps is a big one and could keep yields moving to the upside.
US July PPI final demand +9.8% y/y vs +10.4% expected
- US July 2022 PPI data
- Prior was +11.3%
- PPI -0.5% m/m vs +0.2% expected
- Prior m/m reading was +1.1%
- Ex-food and energy +7.6% y/y vs +7.6% expected
- Ex-food and energy +0.2% m/m vs +0.4% expected
This is the cherry-on-top after yesterday’s CPI data. It adds to the belief that inflation has peaked.
Commodities
Gold backs away from $1800 as US yields soar
- Treasury bonds decline even after another reading below expectations of US inflation.
- Gold fails to rise above $1800 and correct lower.
- Immediate support is seen at $1785, followed by $1774.
Gold turned negative for the day after a reversal from near $1800. XAUUSD peaked at $1799 during the American session and then turned to the downside falling toward $1785.
Gold not shining
Data released on Thursday showed the Producer Price Index in the US dropped by 0.5% in July, and the annual rate fell to 9.8%, against expectations of a 0.2% monthly advance. On Wednesday, it was reported the Consumer Price Index was unchanged in July against expectations of a 0.2% gain. The decline in inflation weighed on the US dollar.
Market participants still expect the Federal Reserve to hike by at least 50 basis points at the September meeting. However, US yields are up even amid the probability of an inflation peak in the US. The US 10-year yield is up 1.90% at 2.83%, while the 2-year is at 3.20%, both at the highest level in almost a week.
The increase in US yields limited the upside in gold. XAU/USD’s inability of holding above 1800$, even after the recent US data, rises doubts about the rally. The immediate support is seen at $1785 followed by the weekly opening at $1774. If the yellow metal consolidates above $1800 more gains seem likely.
Silver eyes a break below the 50-DMA as US bond yields rally
- Silver price is dropping close to 1.50% on Thursday.
- July’s US CPI and PPI inflation reports show signs of topping; however, Fed officials remained hawkish.
- Traders’ focus shifts toward the University of Michigan Consumer Sentiment and Inflation Expectations.
Silver price drops moderately as market sentiment remains upbeat following the release of the US inflation data on Wednesday, followed by Thursday’s PPI report, which showed prices are slowing down, painting a positive picture for the US Federal Reserve. Given the previously mentioned, traders reduced their exposure to safe-haven assets to the detriment of the white metal. At the time of writing, XAGUUSD is trading at $20.28, near the daily lows.
The Department of Labor revealed that prices paid by producers, also known as PPI, rose slower than estimated. The PPI for July jumped by 9.8%YoY, higher than the 10.4% estimates, while the so-called core CPI, which strips volatile items, increased 7.6% YoY, aligned with expectations. Adding the previously mentioned pieces of data to Wednesday’s release of US CPI, which is around 8.5%, still paints a picture of hot US inflation. Even though Fed policymakers welcomed the reports, they reiterated the Fed’s commitment to bringing inflation towards their 2% target.
On Wednesday, Minnesota Fed’s Kashkari said that although the CPI news was good, he said that the Fed is “far, far away from declaring victory.” He added that he hadn’t seen anything that changes the Fed’s path to 3.9% by year-end and the 4.4% by 2023. Kashkari also pushed back against the market’s rate cuts expectations early in the next year and said they are “not realistic.”
In the meantime, the US Dollar Index, a gauge of the greenback’s value, drops 0.10%, at 105.100, while the US 10-year bond yield rallies nine bps, up at 2.88%, weighing on the white metal prices.
WTI crude oil futures settle at $94.34
- Natural gas also sharply higher today
The price of WTI crude oil futures are settling sharply higher on the day at $94.34. That’s up $2.41 or 2.62% on the day.
The EIA its latest report raised its global oil demand forecasts.. There is a report that Shell had shut down several oilfields and pipelines in the US Gulf as a result of a leak.
EU News
European equity close: Mixed bag but a soft finish
- Closing changes in Europe
- Stoxx 600 +0.1%
- UK FTSE 100 -0.5%
- German DAX -0.1%
- French CAC +0.3%
- Italy MIB +0.7%
- Spain IBEX +0.4%
Other News
Attorney Gen. Garland: DOJ asked judge to unseal search warrant for Trump property
- AG Garland speaks on Trump search warrant
- Copies of were provided to Trump’s counsel
- DOJ asked judge to unseal search warrant for Trump property
- Personally approved search warrant
- More information will be made available at the appropriate time
The unsealing of the search warrant is forthcoming.
Cryptocurrency News
Hackers have stolen around US$1.4 billion on blockchain crypto bridges this year (so far)
CNBC have totalled up the combined losses from breaches of cross-chain cryptocurrency bridges so far this year.
A total of around $1.4 billion has been lost to breaches on these cross-chain bridges since the start of the year, according to figures from blockchain analytics firm Chainalysis. The biggest single event was the record $615 million haul snatched from Ronin, a bridge supporting the popular nonfungible token game Axie Infinity, which lets users earn money as they play.
Blockchain bridges tenuously connect networks to enable the fast swaps of tokens. they’ve become popular as a way for crypto users to transact. The bridges bypass a centralized exchange and are largely unprotected.