North American News
Mixed result for the major indices today
- Nasdaq the laggard. The Dow moves further away from it’s 200 day MA
The major US indices are closing with mixed results. The Dow industrial average was the biggest winner with a gain of 0.71%. The NASDAQ index fell and the S&P index rose by equal 0.19% amounts.
Home Depot and Walmart announced earnings before the opening and they both rose sharply. Home Depot is closing up $12.95 or 4.12% at 327.56. Walmart meanwhile rose $6.78 or 5.11% to $139.38.
The Dow laggards today included 3M, salesforce and Intel.
In addition to Walmart and Home Depot, the biggest Dow gainers included Walgreens, Nike, Dow Chemicals.
Meme stocks were also big gainers today:
- Bed Bath and Beyond rose 29.06%
- Express rose 11.96%
- Koss rose 8.21%
- GameStop rose 6.3%
A look at the final numbers for the major indices shows:
- Dow industrial average rose 239.55 points or 0.71% to 34152.00
- S&P index rose 8.04 points or 0.19% to 4305.19
- NASDAQ index fell -25.49 point or -0.19% to 13102.56
- Russell 2000 fell -0.816 points or -0.04% to 2020.52
US July housing starts 1.446M vs 1.540M estimate
- US July 2022 housing starts and building permits data
- Prior 1.559M (weaker than the estimate of 1.580M) for housing starts and 1.685M for building permits (vs exp of 1.650M).
- Housing starts for July 1.446M vs 1.540M est. Prior month revised to 1.599M vs 1.559M previously reported.
- Building permits for July 1.674M vs 1.650M est. Prior month revised to 1.696M vs 1.685M previously reported
- housing starts fell -9.6% vs. +2.4% in June
- building permits fell -1.3% vs. +0.1% June
- single-family permits fell -4.3% to 928,000 while multi family permits rose 2.8% to 746,000
Atlanta Fed GDPNow Q3 cut to 1.8% from 2.5%
- Housing starts industrial production data lead to the
The Atlanta Fed GDPNow estimate for Q3 growth fell to 1.8% from 2.5%. IN their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 1.8 percent on August 16, down from 2.5 percent on August 10. After recent releases from the US Department of the Treasury’s Bureau of the Fiscal Service, the US Bureau of Labor Statistics, the US Census Bureau, and the Federal Reserve Board of Governors, a decrease in the nowcast of third-quarter real gross private domestic investment growth from 0.2 percent to -3.6 percent was slightly offset by an increase in the nowcast of third-quarter real government spending growth from 1.7 percent to 2.0 percent.
Commodities
Gold bears emerge below a key daily counter trendline
- Gold is pressured below a key daily counter-trendline.
- The US dollar is carving out a move to the upside as recent data has reignited global recession fears.
The gold price is under pressure by some 0.15%, sliding from a high of $1,783.19 to a low of $1,771.52 on Tuesday as the safe-haven US dollar hit a one-week high after weak global economic data, particularly in China. The data has reignited global recession fears.
Figures for Industrial Production, Retail Sales and fixed asset investments, as released by the National Bureau of Statistics, came in below expectations in July. Additionally, worries about a more pronounced cooling rose from a surprising rate cut by the Chinese central bank, PBoC. The unexpected decision to cut has given the impression that the PBoC is alarmed about the extent of economic weakening as it tries to revive credit demand to support the COVID-hit economy after a string of weak economic data releases for July.
US Treasury yields rose due to the recession worries with the Federal Reserve expected to continue with steep rate hikes despite nascent signs of a slowdown in inflation. Several Fed policymakers have spoken of the need for continued rate hikes despite the lower-than-expected outcome of last week’s Consumer Price Index. “Fed officials have no choice but to sound tough in the face of a very, very tight labour market and far too high inflation,” Kit Juckes, the head of FX strategy at Societe Generale argued. “It’s hard to build a compelling case to sell the dollar in that world.”
”While Chair Powell catalyzed a Fed pivot narrative at the latest FOMC, particularly as the latest print in inflation pointed to cooling pressures, price action in Treasuries supported a rally across all assets,” analysts at TD Securities said. The yield curve between 2-year and 10-year Treasury notes remained inverted at minus 38.60 basis points on Tuesday. This is viewed as an indicator of an impending recession. The DXY, an index that measures the greenback vs. a basket of currencies reached a peak of 106.94 in early European trading, recovering from the losses that were made on the back of lower-than-expected US inflation data. The index was last seen slightly in the green at 106.52.
Meanwhile, ”odds of a short squeeze in gold are notably declining,” the analysts at TDS argued. ”However, our CTA positioning estimates suggest that a trend followers buying program contributed to lower rates over the past month, as algos were forced to cover shorts. While this supported higher prices in gold, the bar is razor thin for algorithmic trend followers to add to selling pressures in US10y Treasuries once more,” the analysts said.
”This should further sap appetite to buy the yellow metal, while the bar for additional short covering rises further. Meanwhile, Shanghai traders are also likely to appear on the offer, particularly amid a weakening CNY. Gold prices are vulnerable, considering we see signs that gold sellers are lurking. Ultimately, prop traders are still holding a massive amount of complacent length, suggesting we have yet to see capitulation in gold, which argues that the pain trade remains to the downside.”
Silver seems vulnerable near 50 DMA, break below $20.00 awaited
- Silver loses ground for the second straight day and slides to over a one-week low.
- The downfall marks a bearish breakdown below a one-week-old trading range.
- Bears still need to wait for a sustained break below $20.00 before placing fresh bets.
Silver witnesses selling for the second successive day on Tuesday and drops to over a one-week low, around the $20.00 psychological mark during the mid-European session.
The decline follows last week’s failure near the 61.8% Fibonacci retracement level of the $22.52-$18.15 downfall and marks a bearish break below a one-week-old trading range. Adding to this, acceptance below the 50% Fibo. level and the 50-day SMA supports prospects for a further depreciating move for the XAG/USD.
That said, oscillators on the daily chart – though have been losing traction – are yet to confirm the negative outlook. This makes it prudent to wait for sustained weakness below the $20.00 mark before placing fresh bearish bets and positioning for a subsequent slide below the 38.2% Fibo. level, around the $19.80 region.
The next relevant support is pegged near the $19.55 area (last week’s swing low), which should now act as a key pivotal point. A convincing break below would shift the bias in favour of bearish traders and expose the 23.6% Fibo. level, around the $19.20-$19.15 region. The XAG/USD could eventually drop to the $19.00 mark.
On the flip side, the 50% Fibo. level, around the $20.35 region, now seems to act as immediate strong resistance. Any subsequent move up could attract fresh selling near the $20.65 horizontal zone. This, in turn, should keep a lid on any further gains for the XAG/USD near the 61.8% Fibo. level, around the $20.85 region.
EU News
European equity close: Late-day life
- Closing changes in the main European bourses
- Stoxx 600 +0.2%
- German DAX +0.7%
- UK FTSE 100 +0.4%
- French CAC +0.4%
- Spain IBEX+1.2%
- Italy MIB +0.1%
EU sees Iran’s reply to nuclear deal as ‘constructive’
- I guess it wasn’t a take-it-or-leave-it draft after all
The latest draft of the JCPOA was framed by Europeans as a ‘take it or leave it’ offer but Iran seemed to reject that right away.
Their official reply hasn’t been seen yet but a report says the EU sees Iran’s reply as ‘constructive’.
Other News
Germany denies report on keeping nuclear plants open
- Comment from German economy ministry spokesman
The spokesman for Germany’s economy ministry said the report about keeping open 3 nuclear plants beyond December ‘lacks any factual basis’.
Never believe anything until it’s been officially denied.
Cryptocurrency News
Why analysts expect wild rally in Ethereum killer Cardano price
- Cardano investors are at the highest level of profit-taking since March 2022, based on data from Santiment.
- Charles Hoskinson assured ADA holders that Vasil hard fork development is on track, 700 employees are working on the project.
- Cardano price could rally to $1.4 to $2 in the current uptrend, analysts argue.
Cardano investors are active and engaged in profit-taking, in the ongoing cycle. With assurances from Charles Hoskinson and developers on the Cardano network, ADA holders are convinced that the Vasil hard fork is on track.
Cardano investors’ profit taking hit a peak
In March 2022, Cardano price was sitting around the desired $1 level. Profit taking has hit a peak at $0.55, nearly 50% below the bullish target of $1.