North American News
US major indices close lower for the 3rd consecutive day
- All 11 sectors of the S&P fall led by energy
The major US stock indices are closing lower for the 3rd consecutive day. Declines of above and below 1% for the indices. All 11 sectors of the S&P index fell. Only American Express and J.P. Morgan close higher in the Dow 30.
Apple Computer fell below its 200 day moving average at $161.03 closing at $158.88. It’s 100 day moving average is down at $153.99
The final numbers are showing:
- Dow industrial average -308.67 points or -0.96% at 31790.33
- S&P index -44.46 points or -1.10% at 3986.15
- NASDAQ index fell -134.52 points or -1.12% at 11883.16
- Russell 2000 fell -27.34 points or -1.45% 1855.59
Looking at the 11 sectors of the S&P index:
- energy -3.36%
- materials -1.71%
- industrials -1.48%
- utilities -1.47%
The best of the losers included:
- financials -0.42%
- healthcare -0.66%
- communications -0.79%
- consumer staples at -0.99%
JOLTs job openings for July 11.239M vs 10.45M estimate
- JOLTS job openings data for July 2022
- JOLTS job openings 11.239M vs 10.45M estimate
- Prior month 11.04M vs 10.698M prior reported
- job openings increased in transportation, warehousing, utilities (+81,000)
- arts and entertainment and recreation +53,000
- federal government +47,000
- state and local government +42,000
- job openings decrease in durable goods manufacturing (-47,000)
- the number of hires was little change at 6.4 million
- quits, which are considered involuntary, were little change of 4.2 million
- separations, which are considered less involuntary, were also little changed that 5.9 million
- the number of layoffs and discharges was little changed at 1.4 million
US consumer confidence for August 103.2 vs. 97.7 estimate
- US consumer confidence for August 2022
- consumer confidence better-than-expected at 103.2 vs. 97.7 estimate.
- The prior month was revised to 95.3 from 95.7
- present situation 145.4 in August vs. 139.7 in July (was 141.3)
- expectations index 75.1 in August vs. revised 65.6 in July (was 65.3)
- US jobs hard to get index 11.4 in August vs. July 12.4 (was 12.3)
- one year consumer inflation expectations 7.0% vs. 7.4% in July (was 7.6%)
Commodities
Gold remains under pressure, seems vulnerable near one-month low
- Gold meets with a fresh supply on Tuesday and drifts back closer to a one-month low.
- Aggressive Fed rate hike bets continue to drive flows away from the non-yielding metal.
- Retreating US bon9d yields, a weaker USD does little to impress bulls or lend any support.
Gold struggles to capitalize on the previous day’s goodish bounce from the $1,720 area and meets with a fresh supply on Tuesday. The steady intraday descent extends through the early North American session and drags the XAU/USD to the $1,730 region, well within the striking distance of over a one-month low touched on Monday.
Despite modest US dollar weakness and a further decline in the US Treasury bond yields, gold, so far, has struggled to gain any meaningful traction amid expectations for more aggressive Fed rate hikes. In fact, the current market pricing point to a great chance of a 75 bps rate increase at the September FOMC policy meeting. The bets were reaffirmed by Fed Chair Jerome Powell’s hawkish remarks on Friday, which, in turn, is seen exerting some pressure on the non-yielding yellow metal.
The downside, however, seems cushioned, at least for the time being, amid growing worries about a deeper global economic downturn, which continues to weigh on investors’ sentiment. This is evident from the fact that the intraday optimistic move in the equity markets has already started losing steam. Recession fears could drive some haven flows and turn out to be the only factor that could help limit deeper losses for gold. That said, the emergence of fresh selling favours bearish traders.
Hence, a subsequent slide back towards the $1,700 round-figure mark, en route to the $1,680 region or the YTD low touched in July, looks like a distinct possibility. That said, traders might prefer to wait for a fresh catalyst before positioning for any further downside. Hence, the focus will remain glued to the release of the closely-watched US monthly jobs data on Friday. The popularly known NFP report will influence the USD price dynamics and provide a fresh directional impetus to gold.
In the meantime, traders will take cues from other important US macro data, starting with Tuesday’s release of the Conference Board’s Consumer Confidence Index and JOLTS Job Openings. Apart from this, the US bond yields, the USD and the broader market risk sentiment will be looked upon to grab short-term opportunities around gold.
WTI crude oil futures settle at $91.64
- Down $5.37 or -5.54%
Crude oil futures is settling sharply lower today with the contract settling at $91.84. That’s down $5.37 or 5.54%. The low price reached $90.55. The high price extended to $97.65 in what was a large trading range.
Meanwhile Brent crude futures settle below the $100 level and $99.31. That’s down $5.78 or -5.5%.
EU News
Major European indices are closing mixed for the day
- German DAX rebounds into the close
Major European indices are ending the day with mixed results:
- German DAX, +0.53%
- France’s CAC, -0.19%
- UK’s FTSE 100 -0.88%
- Spain’s Ibex, -0.12%
- Italy’s FTSE MIB +0.22%
Other News
Fed’s Williams: Inflation is still way too high
- NY Fed Pres. John Williams speaking to the Wall Street Journal
- There are crosscurrents in current economic data
- Labor market has remained very strong
- Overall picture is similar to where it was in July
- Some positive momentum into 2nd half of 2022
- Inflation still way too high
- Our focus is on getting inflation back down, far too high
- We will look across the data ahead of next meeting including inflation, employment data, job openings, and others
- Very focused on drivers of inflation, given that that’s number 1 problem
- We clearly have an imbalance in the economy
- We need to slow demand enough to meet supply
- We will weigh all of this in the next meeting. Decision will be dependent on totality of the data
- Have to think about where we want to see interest rates both this and the next year
- We need to think about the path of the policy
- We need to get real interest rates above 0
- Demand is far exceeding supply
- We are not at restrictive policy yet
- We need to get interest rates higher than longer run neutral level
- Baseline case is that rates need to go somewhat above 3.5%
- Financial conditions have tightened quite a bit since beginning of the year
- That tightening is consistent with Fed’s direction on policy
- We need to be very focused on getting inflation back down to 2%
- need to mitigate risk of high inflation becoming entrenched
- there will be a time when policy actions will change
- we will need restrictive policy for some time
- next year we are going to need to have restrictive policy for some time
- I see us needing to raise and hold interest rates through next year
- Will take some time before seen adjustment of rates downward
- inflation expectations are well anchored. Will take us a few years to get back to 2% inflation. We will get it done
Cryptocurrency News
Shiba Inu new release: Shytoshi Kusama teases the launch of Shibarium
- Shiba Inu community considers the meme coin’s burn as one of the largest drivers of its price.
- Shytoshi Kusama of Shiba Inu teased the launch of Shibarium, Shiba Inu’s layer-2 scaling solution, in a recent tweet.
- Shiba Inu price continues to struggle, analysts expect the meme coin’s downtrend to continue.
Shiba Inu’s layer-2 scaling solution is a highly anticipated project for SHIB holders. Shibarium, the layer-2 solution is key to Shiba Inu ecosystem’s growth and adoption. Analysts have a bearish outlook on Shiba Inu, and predict further decline in Shiba Inu.