North American News
Big rebound day for the major US stock indices
- Erase the Friday tumble
The major US indices are ending the day with sharp gains. The moves to the upside in the major indices erased the sharp declines from Friday. A lower dollar, and steady to lower yields helped the tone.
A shift in some of the technicals are also a help.
Looking at the S&P index, it closed below the 200 week MA for the 2nd week in 3 last week, but like the first close below, the index is seeing a Monday rebound back above the MA level. The 200 week MA comes in at 3605 this week. The price low today was well above that MA level at 3638.65. The high price reached 3689.73. It would take a move back below 3605 to give the sellers more control again. Until then, the dip buyers have the short term control.
For the Nasdaq index, it move back above the July low at 10565 today. The low was at 10569.69. Failing on the break to new 2022 lows is another red flag for the sellers.
The final numbers are showing:
- Dow industrial average is up 554 points or 1.87% at 30188.78
- S&P index is up 95.08 points or 2.65% at 3678.16
- NASDAQ index is up 354.42 points or 3.43% at 10675.81
- Russell 2000 is up 53.35 points or 3.17% at 1735.75
Commodities
Silver recovery stalls below $19.00
- Silver futures recovery losses steam below $19.00.
- Precious metals have pared losses on the back of a softer USD.
- XAG/USD remains close to a key support area at $17.60/18.10.
Silver futures’ recovery from Friday’s lows at $18.00 seems to have lost steam on Monday’s US trading session. XAG/USD has failed to find acceptance above $18.90, although downside attempts remain, so far, limited above $18.65.
Precious metals pare losses on the back of a softer USD
In the absence of first-tier macroeconomic releases, the news about the UK Government’s plan to reverse most of the tax cuts announced in September has been welcomed by investors. Stock markets are posting significant advances and the safe-haven US dollar has extended its pullback from recent highs.
The precious metal gained territory on Monday to put an end to a six-day sell-off, although the bullish trend has hesitated in the vicinity of $19.00. The pair would need to breach that revel to gather momentum and aim towards the $19.70/80 resistance area.
A confirmation above the $20.00 psychological level would negate the near-term negative trend and open the path toward August and October’s peaks in the area of $21.00
On the other hand, the pair remains still dangerously close to a key support area between $18.10 and $17.60, which contains July, August, and September’s lows. A downside reversal below here might take the pair to explore June 2020 lows at the $17.00 area and Apr 14, 2020, high at S15.85.
Copper declines to $3.39 on demand uncertainty
- Copper prices drop for the second consecutive day.
- Fears about a decline on Chinese demand offset the impact of supply woes.
Copper prices have depreciated for the second consecutive day on Monday on the COMEX market in New York, reaching $3.39 so far.
The red metal attempted to bounce up during the European morning session, favoured by the soft tone of the US dollar. Upside attempts, however, have been capped at $3.45, before giving away gains shortly afterwards and turning negative on daily charts during the US trade.
Fears about a drop in Chinese demand hit copper prices
Demand uncertainty on the back of a global economic slowdown and the increasing COVID-19 cases in China has offset the impact of supply woes. Chinese President Xi Jinping reiterated the Government’s commitment to the zero-Covid policy at the Party Committee last weekend.
Jinping’s comments triggered fears that another set of lockdowns might curb the demand for the industrial metal, which has weighed on prices.
Copper output in Chile, the world’s leading producer declined more than 10% in August.
These concerns have offset the positive impact on prices triggered by the tighter supplies and the increase on demand from China observed last week.
WTI crude oil futures settle at $85.46
- Down $0.15 or -0.16%
The price of WTI crude oil futures are settling at $85.46. That’s down $0.15 or -0.18%.
The low price reached $84.60. The high price was at $87.09. Looking at the hourly chart, the high prices from last week stalled near their 100 hour moving average . The inability to extend above that moving average line keeps the sellers in play. In trading today, the price did moved below the 50% midpoint of the move up from the September 26 low. That level came in at $84.93.
EU News
Scholz: Germany to extend lifetime of all three remaining nuclear power plants
- This was generally expected
Scholz has hinted at a coalition deal on this for a few weeks, so it’s no big surprise. However there were some rumblings that it could be blocked. In any case, the question for now is how long they’re extended for.
In the short term, this will relieve some of the pressure on natural gas and electricity prices this winter. It’s good news for the euro, at the margins, but would have been 95% priced in.
Jeremy Hunt: We need to do more to give markets certainty
- Comments from the new chancellor
More:
- We should be careful not to tax companies in a away that drives away investment but nothing is off the table
- I am not against the principle of taxing profits that are genuine windfalls
- Says ‘yes’ when asked if he can guarantee that Oct 31 forecast will show falling debt to GDP
Kwasi Kwarteng’s entire three-week legacy is now pretty much scrapped. Hunt said it was vital they act now and that there remain many difficult decisions to be announced in the medium-term fiscal plan on October 31.
Hunt also said he is forming an econoomic advisor council because “I want more expert advice.”
Other News
Bank of Canada business outlook survey highlights that most businesses see a recession
- Q3 survey from the Bank of Canada
Highlights from the Bank of Canada’s key Business Outlook Survey for Q3:
- Business confidence has softened
- Most businesses think a recession in Canada is likely within 12 months
- Many firms expect slower sales growth
- Pressures on production capacity are still high, though labor and supply chain bottlenecks have eased
- Pressures on prices and wages have started to ease but firms’ inflation expectations remain high
- Businesses with sales linked to housing activity and household consumption expect weaker sales growth due to rising interest rates
- For the first time in the past five quarters, businesses reported that their supply chains had improved compared with three months ago
- Futures sales -18 vs -26 prior
Cryptocurrency News
Ripple price action not able to enjoy calm waters as indicator points south
- Ripple price action does not make the cut of the shortlist for traders this week.
- XRP price has momentum going against it, with the RSI pointing to more downside.
- Expect to see small but continuous losses mounting through the week as other cryptocurrencies outperform.
Ripple (XRP) price action dropped over 1% intraday as traders placed short-term bets this morning.. After a volatile few sessions last week, the XRP price has faded below $0.48, and the Relative Strength Index (RSI) has followed suit. Given the RSI was overbought at the beginning of October, and remains elevated, it has more room to fall until it hits oversold and a potential turnaround is triggered.
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