North American News
US indices close higher led by the Dow 30
- Nasdaq closes mid-range and near unchanged
The US indices are closing higher on the day. The Dow was near unchanged for the week. The S&P and Nasdaq fell.
The near closing levels are showing:
- Dow rose 200.07 points or +0.60% at 33745.90
- S&P rose 18.94 points or 0.48% at 3965.43
- Nasdaq rose 1.11 points or 0.01% at 11146.07
- Russell 2000 rose 10.61 points or 0.58% at 1849.73
For the trading week:
- Dow close last week at 33747.87. The closing level today is 33745.90
- S&P fell -0.69%. Last week, the index rose 5.9%
- Nasdaq fell -1.57% after rising last week by an oversized 8.1%
- Russell 2000 fell -1.75% after rising 4.6% last week.
Canada October producer price index +2.4% vs +0.4% expected
- October 2022 Canadian PPI data
- Prior was +0.1% (revised to 0.0%)
- Prices +10.1% y/y vs +9.0% prior (revised to +9.1%)
- Raw materials price index +1.3% vs -3.2% prior
- Raw materials price index +10.1% vs +11.0% prior
US October existing home sales 4.43m vs 4.38m expected
- US October existing home sales data
- Prior was 4.71m
- Sales m/m -4.3% vs -1.5% m/m prior
- Prices up 6.6% y/y
Bakers Hughes oil rig count +1 to 623
- Weekly Baker Hughes rig count for the current week
The Baker Hughes rig count for the current week shows:
- Oil rigs rose 1 to 623.
- Gas rigs +2 to 157
- Total rigs +3 to 792
Commodities
Gold drops after dismal US housing data
- Gold Price is set to finish the week with losses of almost 1%.
- US Existing Home Sales plunged severely as the Federal Reserve continued to tighten monetary conditions.
- XAUUSD consolidates around $1750, awaiting a fresh catalyst.
Gold Price tumbled across the board, courtesy of a risk-off impulse, as European equities turned negatively, while Wall Street is mixed. Additional Federal Reserve (Fed) officials are crossing wires, emphasizing the need for higher interest rates after two soft October inflation reports. At the time of writing, XAUUSD is trading at $1755, below its opening price by 0.24%.
US Existing Home Sales plummeted due to Federal Reserve’s monetary policy
The US National Association of Realtors reported that Existing Home Sales for October plunged a staggering 5.9%, below a 4.17% increase estimated by analysts. Home sales have fallen since February of 2022 due to the Federal Reserve’s tightening monetary conditions as they try to curb stubbornly high inflation, which peaked around 9%. However, market sentiment remains positive throughout the session on the back of soft CPI, and PPI October reports.
In the meantime, Fed policymakers reiterated their commitment to taming inflation down. St. Louis Fed President James Bullard said that interest rates are not “sufficiently restrictive” and added that would be if the Federal Funds rate (FFR) hit the 5% to 5.25% area. On Thursday, Minnesota’s Fed President Neil Kashkari commented that one-month data can’t over-persuade the Fed, as it needs to keep at it until they’re sure that inflation has stopped climbing.
Regarding price action, the US Dollar Index, a gauge of the buck’s value against a basket of six currencies, turned red, down by a minuscule 0.07%, at 106.621, capping XAUUSD fall, which threatened to extend below $1750. US Treasury bond yields, namely the 10-year benchmark note rate, rise two bps, yielding 3.795%, putting a lid on Gold Price.
WTI Crude oil settles at $80.08. Worst week since March 2022
- Down -$1.56 or -1.91%
The price of WTI crude oil settled at $80.08 which is down -$1.56 on the day or -1.91%. The low for the day scooted to $77.24. That was the lowest level since September 28. The price is settling below the 100 week MA at $80.95. The last time the price of crude oil closed below the 100 week MA was back on the week of December 28, 2020.
For the week, the price is down -$9.05 or -10.17%. That is the sharpest % decline since the week of March 28, 2022 when the price tumbled 11.79%.
G7 plans to announce Russian oil price cap on Wednesday
- What’s expected here
Brent crude today touched as low as $85.80 but has since bounced to $87.17. It’s near the September low and that’s a big level with the OPEC meeting now three weeks away.
The weakness in crude today is curious but likely reflects worries about covid lockdowns and some technical selling.
The big question is what level the G7 will set. Previously, $60 has been floated and perhaps even lower. Russia is already selling oil at a decent discount to brent so I wouldn’t rule out $50 or $55.
This decision is already way overdue because cargoes for December started booking a month ago and it takes effect on Dec 5.
EU News
European equity close: Strong day to mark another week of gains
- Closing changes for the main European markets
- Stoxx 600+1.1%
- UK FTSE 100 +0.5%
- German DAX +1.2%
- French CAC +1.1%
- Italy MIB +1.2%
- Spain IBEX +0.9%
On the week:
- Stoxx 600 flat
- UK FTSE 100 +0.8%
- German DAX +1.2%
- French CAC +0.6%
- Italy MIB +0.6%
- Spain IBEX +0.1%
Other News
Fed’s Collins: Fed likely needs to hike interest rates more
- Collins says that after hiking, rates need to stay in place for some time
- Hopes monetary policy will not cause too much of a slowdown
- Currently expects a modest rise in unemployment
- Recent data has increased the top range or where I think rates need to get to
- Service sector inflation is still very high
- Not seeing clear and consistent evidence of softening of labor markets
- We need a holistic look at the data and that says we still have more to do
- Interest-rate sensitive sectors have responded to Fed, other areas not yet
- I do not see clear significant evidence that inflation is coming down
- Service sector inflation still very week
- 75 basis points is still on the table
- There’s a risk that as we raise rates, we may go too far
- I am reasonably optimistic that we can avoid recession
Germans will have to prepare for more power, gas price hikes in January
- German consumer energy portal, Verivox, says that higher prices are on the cards
The price portal says that many German households face at least another 50% hike in power and gas supplies come January, due to a lag in suppliers passing on higher wholesale market prices and rising grid fees. Some 137 regional power suppliers will raise prices by an average of roughly 61% and 167 gas suppliers by around 54%, according to Verivox.
German lawmakers have been trying to step up their game to try and provide relief by just by looking at the situation, it is going to further erode consumption activity and purchasing power among consumers. It’s going to be a rough turn of the year in Germany.
Cryptocurrency News
Ethereum price: Why ETH traders are better off with short positions
- Ethereum price shows a descending triangle setup, hinting at a 10% drop.
- Long positions are likely going to be trapped should ETH breach the $1,191 support level.
- A four-hour candlestick close above $1,340 will invalidate the bearish thesis for the smart contract token.
Ethereum price is in a consolidative phase as it hovers below a crucial resistance level. While a quick move to the upside to collect liquidity is likely, traders should not confuse this for a bullish directional bias.
Ethereum price to undo its recovery gains
Ethereum price crashed 33% between November 8 and 10 as the FTX exchange collapsed due to the alleged misappropriation of funds. This bearish move created a local bottom at $1,073, allowing buyers to step in and purchase ETH at a discount, resulting in a 25% recovery rally.
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