North American News
S&P close lower. Dow unchanged on the day
- S&P and Nasdaq down for the 3rd day in a row
The Nasdaq and the S&P closed lower for the 3rd consecutive day. The Dow is closing unchanged – maybe with a small 1 point gain as the final trades are processed.
The final numbers are showing:
- Dow industrial up about 2.67 points or 0.01% at 33852.52
- S&P index is down 6.32 points or -0.16% at 3957.63
- NASDAQ index is down -65.71 points -0.59% at 10983.79
- Russell 2000 is closing up 5.58 points or 0.31% at 1836.55.
US yields did not help the stock market today.
- two year yield is at 4.481%, +1.0 basis points
- 10 year is that 3.757% up 5.5 basis points
- 30 year is at 3.810% up 6.1 basis points
There is a report today that there will be a shortfall in iPhone production for the iPhone 14 Pro and 14 pro max between 15 – 20 million units as a result of plant labor protests. The price of Apple shares fell $3.11 or -2.16%. Apple was the biggest drag on the Dow today
After the close:
- Intuit reported Q1 earnings-per-share oh $1.66 versus $1.22 expected. Revenues came in at $7.87 billion versus $7.43 billion expected. Intuit shares are trading at $381.54 that’s up from the closing level $379.71.
- HP beat on revenues at $7.87 billion versus $7.42 billion. Earnings-per-share came in at $0.57 versus $0.56 estimate HPE is trading at $15.91 in after hours after closing at $15.46.
- Crowdstrike revenues came in at $581 million versus $574 million estimate. Earnings-per-share came in at $0.40 versus $0.31 estimate. Crowdstrike shares are down over $20 or 14.5% in after-hours trading despite the beat.
US November consumer confidence 100.2 vs 100.0 expected
- US November 2022 consumer confidence data from The Conference Board
- Prior was 102.5
- Estimates ranged from 98.0 vs 103.9
- Present situation 137.4 vs 138.9 prior
- Expectations 75.4 vs 78.1 prior
- One-year inflation expectations 7.2% vs 6.9% prior
- Jobs hard-to-get 13.0% vs 12.7% prior
The present situation number fell sharply in the previous report, in October, and continued to fall; meanwhile the expectations number remains in recessionary territory below 80.
Commodities
Silver trims Monday losses, eyes the 200-day EMA around $21.30
- Silver price advances and faces resistance at the 200-day EMA.
- US Dollar got bid as of late, courtesy of sentiment deterioration.
- Silver Price Analysis: Downward biased after breaking below a one-month upslope trendline.
Silver price is recovering some ground against the US Dollar (USD), rising some 1.50% on Tuesday, as sentiment continues to deteriorate, with US equities tumbling while US Treasury yields advanced. Nevertheless, the XAG/USD erased some of its Monday losses, trading at $21.27, above its opening price, after hitting a daily low of $20.92.
Investors’ mood shifted sour, weighed by a big US tech company slide. Data revealed by the US Conference Board (CB) showed that consumer confidence dropped to a four-month low of 100.2. “The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” said Lynn Franco, senior director of economic indicators at the Conference Board.
Elsewhere, Federal Reserve officials remained hawkish, led by the St. Louis Fed President James Bullard saying that the US central bank has “ways to go to a restrictive policy.” The New York Fed President John Williams echoed some of his comments, adding that the strong economy in the US “suggests a modestly higher path for policy relative to September. Not a massive change, but somewhat higher.” Meanwhile, money market futures have priced in a 50 bps hike in December, with odds of a 75 jumbo increase at 15%.
In the meantime, the Covid-19 riots in China appeared to wane as health officials urged local governments to avoid unnecessary and lengthy lockdowns. Chinese health officials said the Omicron variant is less severe while committed to vaccinating elder people aged 80 or older.
Aside from this, the US 10-year Treasury bond yield continued to climb five bps, at 3.735%, capping XAG/USD gains. Of note, Silver rested the 200-day Exponential Moving Average (EMA) at $21.32, though failure to break it could pave the way for a re-test of the $20.00 psychological level.
Meanwhile, the US Dollar Index (DXY), a measure that tracks the greenback’s value against a basket of peers, is gaining 0.05% up at 106.705, putting a lid on XAG/USD prices.
The US docket would be busy with the release of ADP figures, GDP, the Goods Trade Balance, Wholesales Inventories, the Chicago PMI, JOLTs report, Pending Home Sales, and Fed speaking, led by the Federal Reserve Chairman Jerome Powell.
Silver Price Analysis (XAG/USD): Technical outlook
Even though Silver reclaimed $21.00, the white metal broke below a one-month-old upslope trendline drawn since the beginning of November, which, intersects with the 200-day EMA around $21.32, a difficult resistance to surpass. The Relative Strength Index (RSI) at bullish territory suggests buyers are in charge, though lacking the strength to break the latter. Tuesday’s candle, with a long upper wick, portrays sellers stepping in; therefore, the XAG/USD might consolidate.
XAG/USD key resistance levels lie at the 200-day EMA at $21.30, followed by November’s 24 high of $21.67, ahead of $22.00. On the flip side, XAG/USD first support would be $21.00, which, once cleared, could send the white metal sliding to the 50-day EMA at $20.00.
Commodity Market Open Interest Dives
Open interest in commodity futures slid by $17.9B from the previous week — dropping to a two-month low total of $1.18 trillion, according to data from JPMorgan Global Commodities Research. Declines in open interest for energy, grains, and metals all contributed to the fall, with open interest in energy markets finding their lowest level since April 2021 and agricultural markets falling to their lowest in a month. After starting the day lower, many commodity futures are now trading higher — with soft commodities like coffee and sugar along with precious/base metals like silver and nickel recording the largest gains.
OPEC likely to stick with existing policy – report
- Reuters, citing five sources. Though two say a further cut could be considered
Reuters, citing five sources, says OPEC+ is likely to stick with its existing quotas at Sunday’s meeting. However two sources said the group could consider further cuts.
OPEC+ said to consider moving Sunday’s meeting to virtual (now confirmed)
- Interesting turn of events
I think the market would take that as a sign of a continuation of current policy but that’s a bit of a leap. During the pandemic, OPEC made plenty of big decisions virtually.
This report is just trickling out now WTI has dipped a bit. At first it was just floated but now it’s confirmed. I’d like to understand the reasoning for why they’re considering a virtual meeting so close to the meeting date before deciding.
EU News
European equity close: UK stocks post a decent day
- Closing changes
- UK FTSE 100 +0.6%
- German DAX -0.2%
- French CAC +0.1%
- Spain IBEX flat
- Italy MIB +0.1%
Other News
BOE’s Bailey: QE hasn’t blurred the distiction between monetary and fiscal policy
- Comments from the Bank of England Governor in testimony
- There has been no discussion with government on pace and timing of BOE asset sales
- UK labor market has turned out to be much more constrained than we thought and different than other countries
- Scale of total quantitative tightening needed is uncertain
Fed discount minutes: Three banks wanted smaller rate hike
- Soft dissent in favor of smaller hikes
I’m not sure the discount minutes offer much but they do show which way the wind is blowing. The latest edition showed 9 of 12 Fed bank boards seeking a 75 bps hike (as the Fed hiked 75 bps) while 3 wanted just a 50 bps hike.
The outliers were Kansas City, New York and Philly.
Cryptocurrency News
Crypto Exchange Bitfront Shuts Down — WSJ
Bitfront, operated by Japanese messaging app Line, is the latest cryptocurrency exchange to shut down.
Bitfront, which runs on the Line blockchain that offers crypto token Link, said in a Sunday notice (https://linecorp.com/en/pr/news/global/2020/67) that its closure is unrelated to recent developments in the crypto market, including exchanges that have been accused of misconduct.
“Despite our efforts to overcome the challenges in this rapidly evolving industry, we have regretfully determined that we need to shut down Bitfront in order to continue growing the Line blockchain ecosystem and Link token economy,” the notice said.
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