North American News
All 3 major indices close lower for the week. 1st declines in 5 trading weeks
- NASDAQ index the weakest of the majors today and for the week
The week is ending on a soft note. All 3 major indices are closing lower on the day with the NASDAQ down over 2%. The Russell 2000 index of small cap stocks fell by -2.17%.
The declines in the Dow industrial average today tipped its fortunes for the week into negative territory but only barely.
For the week, the Dow, S&P and NASDAQ close lower for the 1st time in 5 trading weeks. The declines for the week showed:
- Dow -0.1%
- S&P -1.2%
- NASDAQ -2.62%
For the trading day:
- Dow industrial average fell -292.3 points or -0.86% at 33706.73
- S&P index fell -55.24 points or -1.29% at 4228.49
- NASDAQ index fell -260.12 points or -2.01% at 12705.23
- Russell 2000 fell 43.38 points or -2.17% at 1957.34.
Baker Hughes oil rigs unchanged at 601
- Weekly Baker Hughes rig count
- Oil rigs 601, unchanged on the week
- Gas rigs 159, -1 on week
- Total rigs -1 at 762
Commodities
Gold vulnerable near three-week low amid rising USD, bond yields
- Gold continues losing ground for the fifth successive day and drops to a multi-week low.
- Hawkish Fed expectations, surging US bond yields, sustained USD buying exert pressure.
- Recession fears, the risk-off impulse fail to impress bulls or lend any support to the metal.
Gold prolongs this week’s bearish trend for the fifth successive day and drops to a three-week low on Friday. The XAU/USD remains depressed through the early North American session and is currently placed near the $1,750 level, down nearly 0.40% for the day.
Worries about a global economic downturn triggered a fresh wave of the global risk-aversion trade on the last day of the week. This is evident from a generally weaker tone around the equity markets, which turns out to be a key factor that offers some support to the safe-haven precious metal. That said, an extension of the recent US dollar rally keeps a lid on the attempted intraday recovery for the dollar-denominated gold.
In fact, the USD Index (DXY), which tracks the greenback’s performance against a basket of currencies, shot to a one-month high amid hawkish Fed expectations. The FOMC minutes released on Wednesday indicated that policymakers remain committed to raising interest rates to tame inflation. Furthermore, the recent comments by several Fed officials suggested that the US central bank would stick to its policy tightening path.
Adding to this, the incoming better-than-expected US macroeconomic data reaffirmed markets, which, in turn, leads to a further rise in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond climbs back closer to the 3.0% threshold. This, in turn, continues to underpin the greenback and further contributes to driving flows away from the non-yielding yellow metal, favouring bearish traders.
Even from a technical perspective, the recent repeated failures near the $1,800 mark and a subsequent fall below the previous monthly low, around the $1,754 area adds credence to the negative outlook. This, in turn, suggest that the path of least resistance for gold is to the downside. Nevertheless, the metal remains on track to register heavy weekly losses and snap a four-week winning streak to over a one-month high.
Crude oil settles at $90.44. $0.33 higher on the day
- The high for the day reached $92.08. The low extended to $88.37
WTI crude oil futures are settling at $90.44. Last Friday, the closing level came in at $91.87. For the week the decline, the price fell $1.43 were -1.5%.
Technically the price is settling near its 200 hour moving average (green line in the chart below) at $90.12. The high price stalled near the 38.2% retracement at $91.87. The low price stalled near the 100 hour moving average at $88.59.
EU News
Lower close for Europe’s major indices with the exception of the UK FTSE 100
- UK FTSE 100 ekes out a small gain
The major European indices (sans the UK FTSE 100) are closing lower on the day.
The final numbers are showing:
- German DAX, -1.12%
- France’s CAC, -0.94%
- UK’s FTSE 100 +0.11%
- Spain’s Ibex -1.09%
- Italy’s FTSE MIB, -1.95%
For the trading week:
- German DAX, -1.8%
- France’s CAC -1.0%
- UK’s FTSE 100 +0.67%
- Spain’s Ibex -0.76%
- Italy’s FTSE MIB -1.9%
Other News
Fed’s Barkin: Fed will do what it takes to return inflation to target
- Richmond Fed Pres. Barkin speaking
- Fed will do what it takes to return inflation to target
- moving inflation to target will not happen immediately
- starting to see some precautionary softening in business investment
- Returning to normal does not require a calamitous drop in economic activity
- reduction of balance sheet should add to tighter financial conditions
- amount of money in overnight RRP means Fed is nowhere near the edge of balance sheet low point
- recent data on economy has been a strong, jobs market seems healthy, as does core retail sales industrial production
- July inflation report was a better. Have some hope that it will continue to come down
- Still a lot of time until decision needs to be made on size of September rate hike
- Fed will need to move rates to restrictive territory, but will take signal from economy on how high that needs to be
- a lot of recent declining core inflation was due to volatile items
- at this point underlying demand seems stronger than it did as of the last Fed meeting
- Fed is now balancing urge to get where it needs to go on rates against uncertainty over impact on the economy
France’s Macron: There is risk of Russia decoupling Zaporizhzhia nuclear plant
- Macron speaks to Russia’s Putin
- Call to Putin was justified by the necessity to preserve Europe’s nuclear safety which is at risk
- there is risk of Russia decoupling Zaporizhzhia nuclear plant from Ukraine’s power grid which would be unacceptable in view of Ukraine’s sovereignty
- Putin told Macron he was opened to reconsider previous demand that IAEA reaches nuclear plant via Russian soil, Macron asked for permission to travel through Ukraine
- France prepared to support planned IAEA expert mission to Ukrainian nuclear plant with technical expertise and politically
Meawhile Putin said that Ukraine’s showing of Zaporizhia nuclear plant is creating a risk of large-scale catastrophe.
Cryptocurrency News
Bitcoin bear market woes: BTC price drop below $21,000 could spell doom
- Bitcoin price bled 10% overnight, losing FOMC-rally gains.
- Bitcoin price consolidation below $21,000 is a bearish sign and a sell opportunity for investors, argue analysts.
- Analysts argue Bitcoin is likely to extend its losses, the current flag points to a BTC bottom at $10,000.
The crypto bloodbath is unlike previously seen flash crashes. Bitcoin price declined nearly 8% in the European session, slightly recovered its losses before resuming the downtrend. Analysts are evaluating where Bitcoin price bottom lies, as BTC nosedives to the $21,500 level.
Shiba-Inu-themed cryptocurrencies Dogecoin and Shiba Inu nosedived 15% and 13% overnight, respectively. While the reason for the crypto bloodbath remains largely unclear. Susannah Streeter, senior investment and market analyst at Hargreaves London said,
It’s not showing the pattern of a flash crash, as the assets didn’t immediately rebound sharply but sank even lower in the hours that followed. It seems likely that this was as a result of a large sale transaction.
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