North American News
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Marginally higher closes for the major US stock indices in a ho-hum session
- A little bit of summer trading
The major US stock indices are closing marginally higher in a ho-hum summer like session.
A look at the final numbers shows:
- Dow industrial average up 18.7 points or 0.06% at 33999.03
- S&P index up 9.7 points or 0.23% at 4283.73
- NASDAQ index up 27.23 points or 0.21% at 12965.35
- Russell 2000 up 13.41 points or 0.68% at 2000.72
US existing home sales 4.81M vs 4.89M estimate
- US existing home sales for July 2022
- US existing home sales 4.81M vs 4.89M estimate.
- Prior month revised to 5.11M from 5.12M previously reported
- inventory of homes 1.31 million
- median home price for existing homes $403,800. That’s up 10.8% from July 2021
- 3.3 month supply vs 3.0M last month
Commodities
Gold hovers around $1760 amidst a buoyant US dollar
- Gold price stumbles below the $1760 threshold due to overall US dollar strength.
- Fed officials pushed back against a “dovish” stance by the central bank; emphasized the need to get inflation back down “urgently.”
- US labor and housing data were mixed, though mainly ignored by market participants.
Gold price retraces from daily highs reached around $1772, shy of the 50-day EMA, but stumbled below its 20-day EMA, extending its losses for the fourth consecutive trading day. Despite falling US Treasury bond yields, broad US dollar strength, bolstered by hawkish Fed commentary, weighed on the yellow metal prices.
XAU/USD is trading at $1760 a troy ounce, below its opening price, while the US Dollar Index, a gauge of the buck’s value vs. a basket of peers, rises 0.80%, sitting at 107.509. Contrarily, the US 10-year bond yield drops to 2.882% after reaching a high of 2.913%.
Fed speakers underpinned the greenback, to the detriment of gold prices
During the last few hours, Fed officials grabbed attention. Firstly was San Francisco Fed’s Mary Daly, who said that it is too early to declare victory on inflation and said that 50 or 75 bps is reasonable for the September meeting, via CNN.
Later Kansas City Fed President Esther George added that although inflation data was “encouraging” last month, it’s not time for a “victory lap.” George said that core inflation is “hardly comforting” and noted that the case for raising rates remains strong. At the same time, the St. Louis Fed’s James Bullard commented he’s leaning towards a 75 bps rate hike and foresees an 18-month process of getting inflation back to the Fed’s 2% target.
The last to hit the stand was the Minnesota Fed’s Neil Kashkari. He said that the Fed needs to get inflation down “urgently” while adding that economic fundamentals are strong and emphasized that it does not feel like a recession now.
Elsewhere, before Wall Street opened, US Initial Jobless Claims for the week ending on August 13 decelerated to 250K from 265K foreseen. At the same time, the US housing market is still cooling down due to higher interest rates. Existing Home Sales for July dropped 5.9%, at a rate of 4.8 million units in July, the lowest level since May 2020, when sales hit their lowest point during the Covid-19 lockdowns.
According to sources cited by Reuters, “Assuming the Fed will fight inflation without pushing the economy into recession, safe-haven demand will fade further, causing gold to move gradually lower on a medium to longer-term horizon.”
EIA natural gas storage change 18 bcf vs 34 bcf estimate
- Weekly EIA natural gas storage change figures for the week of August 12
- EIA natural gas storage change 18 BCF vs. 34 BCF estimate
WTI crude oil futures settle at $90.50
- Up $2.39 or 2.79%
WTI crude oil futures are settling up $2.39 or 2.71% at $90.50. The high price reached $91.45. The low price was at $87.35. The prices up for the 2nd days in a row.
Yesterday, the weekly inventory report showed a greater than expected drawdown. UBS said today that oil could reach $125 as result of too tight supply.
OPEC Secretary-General: Relatively optimistic on oil outlook for 2023
OPEC Secretary-General Al Ghias is speaking and says:
- relatively optimistic on oil outlook for 2023
- fears of Chinese a slowdown taken him him out of proportion
- the oil price slide reflects fears about economy
- physical oil demand is robust
- premature to say what OPEC will do at September 5 meeting. Could cut or add production if needed (interesting the “cut” qualifier.)
- Replacing Russian barrels is not an easy task
- dialogue is ongoing between OPEC and Russia and expected to continue
- OPEC’s ability to meet oil demand will be challenging and difficult without tackling the issue of underinvestment
- policymakers and lawmakers to blame for high energy prices, not OPEC
EU News
European major indices close mostly higher
- Spain’s Ibex marginally lower
Maj. European indices are ending the day mostly higher:
- German DAX, +0.52%
- France’s CAC, +0.45%
- UK’s FTSE 100 +0.35%
- Spain’s Ibex -0.13%
- Italy’s FTSE MIB +0.8%
Other News
Fed’s Bullard: Favours a 75 basis point hike in September
- Fed’s Bullard in the WSJ
- He is considering supporting for another 75 basis point hike at the September meeting
- he isn’t ready to say the economy has seen the worst of inflation surge
- I don’t see why you want to drag out interest rate increases into next year
- I think would make sense to get the policy rate higher and into restrictive territory
- important for the Fed to get the target rate to a range of 3.75% to 4% by year end
- he sees about a month process of getting price pressures back to the Fed’s 2% target
- the path to lower rates will likely be uneven
- we’ve got a long way to go to get inflation under control
- the idea that inflation has peaked is a hope; is not statistically in the data at this point
- hopeful that the worst of inflation has passed
- expect high inflation to prove more persistent
- believes growth in the 2nd half of the year will be stronger than the apparent weakness seen in the 1st 6 months of the year
- unemployment could still rise and still herald a robust labor sector
- market speculation of rate cuts is a definitely premature and that fears economy may fall into a downturn or overload
- it’s possible stock prices are giving a false impression of the state of asset prices
Cryptocurrency News
Bitcoin price is in limbo, but here are the levels to watch
- Bitcoin price is seeking higher support at $23,500 after aborting recovery above $24,000.
- If bears have their way, the largest cryptocurrency will stretch the down leg to $21,500.
- Bitcoin price will stay within two key levels – $23,206 and $23,870 unless something drastic occurs.
Bitcoin price is slipping below a key governing pattern after the Federal Reserve’s July minutes hinted at less stringent monetary policy in 2023. Live price data from CoinGecko reveals an increase in cumulative weekly losses to 1.8%. Bitcoin price is expected to make a quick rebound above $23,500, but investors cannot rule out potential declines to $21,500 and $18,000, respectively.