North American News
S&P and Nasdaq give back gains from yesterday
- Dow lower as well`
Yesterday’s closing prices
- S&P closed up 56.84 points or 1.49% at 3878.45
- Nasdaq closed up 162.27 or 1.54% at 10709.38
- Dow closes up 526.74 points or 1.60% at 33376.49
Today, those gains were mostly clawed back (at least in the S&P and the Nasdaq indices)
- S&P closed down -55.86 points or -1.44% at 3822.59
- Nasdaq closed down -233.24 points or -2.18% at 10476.13
- Dow closed down -348.28 points or -1.04% at 33028.21
- Russell 2000 closed down -22.85 points or -1.29% at 1754.08
US sells 5-year TIPS at 1.504%
- Results of the US TIPS auction
The market was looking for 1.482%, so this is a 2.1 basis point tail.
It’s a tough time of year to handicap bond sales because of year-end. Next week will be even worse with some sales not settling until 2023.
Commodities
Gold bulls need to commit at key trendline support
- Gold price meets major trendline support in blow-off move on Thursday.
- The Federal Reserve theme is alive and kicking, weighing on the Gold price.
- US Treasury yields and US Dollar benefitted from sold Weekly Jobless Claims.
The Gold price has dumped to a critical area on the daily charts, as shown below, losing some 1.5% on Thursday. The yellow metal is back below the psychological $1,800 area as the Gold price continues to face resistance in attempts to break out to the upside. Most prevalent in the fundamentals surrounding the Gold price has been the sentiment in markets for a hawkish Federal Reserve (Fed) in 2023.
US Treasury yields rally, weighing on Gold price
US Treasury yields are higher following the data on Thursday showed Weekly Jobless Claims in the US rose less than expected. The US 10-year Treasury yield is up 0.14% at the time of writing, but it rose to a high of 3.692% earlier in the day, bearish for the Gold price as the shiny metal offers no interest.
The US Dollar and Gold price took their cues when the Department of Labor said seasonally adjusted numbers of initial unemployment claims rose by 2,000 to 216,000 in the week ended Dec. 17. The consensus on Econoday was for a 225,000 print. The previous week’s level was revised up by 3,000 to 214,000. The four-week moving average tallied 221,750, sliding by 6,250 from the previous week’s revised average of 228,000. Unadjusted claims declined by 4,064 on a weekly basis to 247,867.
US Dollar in demand
The US Dollar was in demand following the numbers as these are the type of data that could keep the Federal Reserve (Fed) hawkish for longer. The Fed last week projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023. DXY, an index that measures the US Dollar against a basket of currencies rallied into the 104.50s from a low of 103.75. The US Dollar, however, remains well below the highs for the month near 107.20 and the Gold price has been able to capitalize on the slide over recent weeks.
Meanwhile, analysts at Brown Brothers Harriman noted that the current consensus for Nonfarm Payrolls (NFP) stands at 208k vs. 263k in November, with the Unemployment Rate seen steady at 3.7% and average hourly earnings falling a tick to 5.0% YoY. ”While job growth is clearly slowing, it’s not by enough to materially impact unemployment and so we continue to believe that the Fed will have to do more than the market is expecting.”
WTI crude oil futures settle at $77.49
- Down $0.80 on the day
The WTI crude oil futures are settling down $0.80 on the day at $77.49. The high price reached $79.87. The low price extended to $77.05.
Looking at the hourly chart, the contract moved above its 38.2% of the move down from the November high and into a swing area between $79.63 and $80.00. The $80 level target could not be broken and the pair rotated lower. The rising 100 hour MA and 200 hour MA are the next downside targets at $76.46 and $75.83.
EU News
European equity close: Bears back in control
- Closing changes
- Stoxx 600 -1.0%
- German DAX -1.4%
- France’s CAC, -1.1%
- UK’s FTSE 100 -0.4%
- Spain’s Ibex -0.4%
- Italy’s FTSE MIB -1.3%
Other News
Putin will sign a decree on the response to the oil price cap on Monday or Tuesday
Russia’s long-awaited response to the G7 oil price cap is coming early next week, according to Putin himself. He noted that there are no losses for the Russia economy from the price cap, which to me suggests that he’s not going to retaliate with anything too dramatic. That fits in with older reports saying he’s not leaning towards a price floor or spread to brent. Instead, Russia will ban selling in any contracts that mention the price cap.
Guggenheim Investments CIO Scott Minerd reportedly dead
- Minerd was frequently in the media, including just yesterday
Sadly, Guggenheim Partners announced the death of 63-year-old CIO Scott Minerd. The company said he died yesterday from a heart attack during his regular workout.
He was very active in financial media, including just last week when he was on Bloomberg TV and warned bitcoin would fall to $8000 and that something would go wrong in markets.
“There’s another shoe to drop – I can’t tell you where it is,” Minerd said last week. “The reason is this is just like any number of periods where we had easy money and a lot of speculation; the weakest players fall first. Crypto was obviously something that is crazy.”
He also forecast that the US unemployment rate would rise by 2 percentage points in the year ahead.
Cryptocurrency News
SEC v. Ripple lawsuit update: Remittance network Ripple scores another small win in court
- SEC v. Ripple lawsuit Judge Analisa Torres rules in favor of Ripple redacting documents connected with Daubert motions.
- Ripple scored a small win in the court case, protecting remittance network confidential business interests, third-party privacy.
- XRP price outlook is bearish this week as the altcoin trades below the 50-day Exponential Moving Average, close to the weekly low.
The US Securities and Exchange Commission (SEC) v. Ripple lawsuit dragged forward with a small win in favor of the remittance company. Judge Analisa Torres ruled in favor of payment giant Ripple, allowing the firm to redact documents submitted in connection with the Daubert Motion.
The motion is of a special kind and is used to exclude the testimony of an expert witness who does not possess the requisite level of expertise.
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