North American News
NASDAQ index snapped it’s 7 day losing streak
- Major indices close sharply higher and near highs for the day
The major US indices are closing sharply higher and near the highs for the day:
- NASDAQ index snapped it’s 7 day losing streak
- S&P and Dow snap their 2 day losing streak
- S&P has its best day in a month
- energy was the only sector that fell today
THe final number are showing:
- Dow industrial average +435.96 points or +1.4% at 31581.27
- S&P index up 71.68 points or 1.83% at 3979.88
- NASDAQ index up 247 points or 2.14% at 11791.91
- Russell 2000 up 39.68 points or 2.21% at 1832.00
Atlanta Fed GDPNow estimate falls to 1.4% from 2.6% previously
- Sharp fall in the Atlanta Fed GDPNow estimate for 3Q growth
The Atlanta Fed GDP model for the 3Q now sees growth at 1.4% which is down from 2.6% on September 1.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 1.4 percent on September 7, down from 2.6 percent on September 1. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth, third-quarter real gross private domestic investment growth, and third-quarter real government spending growth decreased from 3.1 percent, -3.5 percent, and 1.7 percent, respectively, to 1.7 percent, -5.8 percent, and 1.3 percent, respectively, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth increased from 0.82 percentage points to 1.09 percentage points.
Commodities
Gold runs up to test critical resistance with eyes on a significant bullish breakout
- The gold price firms to take on ket resistance as the US dollar tails off from fresh bull cycle highs.
- Gold bulls eye a 50% mean reversion with the prospects of a break to $1,735 beyond there.
The gold price has added to gains on the day, although is starting to tail off from the New York session highs of $1,719.29 currently. The precious metal is around 0.8% higher on the day, having risen from a low of $1,691.46 to a high of $1,719.29 as the greenback and US yields retrace.
The US dollar has fallen off the strongest levels in two decades as per the DXY index, which measures the greenback vs. a basket of currencies. The index was last seen down 0.44% to 109.76, after earlier touching 110.786 the highest since 2002. US Treasury yields also slid from early highs, bullish for gold since it offers no interest. The yield on the US 10-year note was last seen down 2.45% to 3.271%.
Meanwhile, however, hawkish comments from Fed Chair Jerome Powell were compounded by signs of an economic slowdown in Europe and China and aggressive steps by major central banks to tame inflation, all of which has been underpinning the greenback of late. Additionally, data signalling strength in the US economy has prompted traders to bet on a 75-basis-point interest rate hike by the Fed later this month. Despite last week’s mixed jobs data in the Nonfarm Payrolls, the Fed fund futures are still implying that investors are pricing in a more than 78% chance of such a move. Nevertheless, the Atlanta Fed GDP nowcast estimates for the third revised 1.4% from the 2.6% pace in the previous estimate on Sept. 1. The next update is scheduled for Friday, ahead of next week’s critical US Consumer Price Index.
More immediately, the European Central Bank is meeting on Thursday which could be a further weight to gold prices with the board leaning towards a 75bp rate hike given that the ECB is behind the curve. ”The possibility that failure to deliver a 75bp rate hike could send the euro spiralling lower. Markets look set to remain volatile and it is important to remain open to the potential for swift changes in sentiment given current positioning,” analysts at ANZ Bank said.
Meanwhile, ”traders are questioning whether the move lower in precious metals is fundamentally running out of steam, after a repricing in rates markets has left market expectations more closely in line with the Fed’s outlook for rates,” analysts at TD Securities said who argue that while rates pricing now appears closer to fair value.
”Gold markets have failed to price the implications of a sustained period of restrictive interest rates,’ they said, expecting odds of a major capitulation event growing with every tick lower in gold prices. The analysts say that this ”could coincide with a break below a multi-decade uptrend in the yellow metal near $1675/oz.”
”Gold markets still feature an extremely concentrated and bloated position held by a small number of family offices and proprietary trading shops, which are increasingly at risk as prices approach their pandemic-era entry levels. At the same time, the margin of safety against a short squeeze continues to grow, increasing odds that we can break through this critical support. And, our tracking of Shanghai gold trader positioning suggests that China’s appetite for gold is finally starting to ebb, potentially adding into a liquidation vacuum.”
WTI crude oil futures settle at $81.94
- Down $4.94 or 5.69%
The price of WTI crude oil futures are settling at $81.94. That’s down -$4.94 or -5.69%. The close is the lowest since January 13, 2022 and down 36.85% from its March 8 high. The closing level on December 31 for the continuous contract was and $75.35.
EU News
London/European traders exiting for the day
- Major European indices end with mixed results
London/European traders are exiting for the day. The major indices are ending the day with mixed results:
- German DAX is up 0.35%
- France’s CAC is up 0.02%
- UK’s FTSE 100 is down -0.86%
- Spain’s Ibex is up 0.75%
- Italy’s FTSE MIB is up 0.28%
Other News
US EIA cuts 2022 US crude output estimate by 70,000 bpd
- US EIA raises forecast for 2022 world oil demand but cuts 2023
- The EIA raises 2022 demand forecast by 20,000 bpd to +2.10mbpd y/y
- Cuts 2023 demand growth by 90k bpd to 1.97 mbpd y/y
- Sees 2022 US output of 11.79 mbpd up 540kbpd this year vs +610k prior
- Output to rise 840k bpd in 2023 to 12.63mbpd
- 2023 US demand to rise 350k vs 410k last month
Cryptocurrency News
Bitcoin tests end of June low….Found dip buyers
- Risk focused buyers against the June 30 low
The price of Bitcoin moved to the lowest level since June 30 today and in the process tested the low on that day at the $18595 level. The low price today reached $18540, just below that level. Risk focused buyers stuck a toe in the water against the level and have pushed the price back higher. The digital currency trades at $18928 currently The high for the day is at $18977.