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North American News

Major indices restart the downside momentum after the reprieve yesterday

  • Major indices down 6 of 7 trading days.

The major US indices have all restarted their downside moves after the reprieve after the FOMC decision yesterday.

  • The declines were led by the Nasdaq which is on track to closing below its 200 week MA for the first time since the start of the pandemic in March 2020.
  • The Dow is approaching bear market territory at -20%.
  • The S&P is moving toward -25% from it’s all time high.
  • The major indices are down 6 of 7 trading days.
  • All 11 sectors of S&P are lower with the Consumer staples fairing the best at -0.66%. The Energy sector was down -5.58% even though crude oil prices were higher
  • The worst performing stock in the Dow 30 was American Express at -5.93%. Walmart was the best performer at 1.06%.

The final numbers are showing:

  • Dow industrial average fell -741.48 or -2.42% at 29927.06
  • S&P fell -123.24 points or -3.25% at 3666. 76
  • Nasdaq fell -453.05 or -4.08% at 10646.11
  • Russell 2000 fell -81.30 points or -4.70% at 1649.83

Atlanta GDPNow estimate remains at 0.0% for the 2nd quarter

  • New model estimate after the data this morning

The Atlanta Fed GDPNow estimate for 2Q remained unchanged at 0.0% after the data releases this morning. In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is 0.0 percent on June 16, unchanged from June 15 after rounding. After this morning’s housing starts report from the US Census Bureau, the nowcast of second-quarter real residential investment growth increased from -8.5 percent to -7.7 percent.


Commodities

Gold Price Forecast: XAU/USD jumps toward $1850 as US yields slide on risk aversion

  • Gold rises to the highest level in four days, eyes $1850.
  • Silver erases losses, and approaches Wednesday’s high near $21.90.
  • US yields slide as demand for Treasuries picks up amid risk aversion.

Gold gained momentum boosted by a context of risk aversion and a weaker US dollar. XAU/USD rose from under $1820 to the $1850 area. 

In Wall Street, stocks are falling sharply. The Dow Jones is losing 2.50% while the Nasdaq drops by more than 4%. Recession concerns are driving prices lower. At the same time, the demand for safe-haven assets boosted Treasuries. The US 10-year yield pulled back from 3.49% to 3.32%.

The US dollar is falling versus its G10 rivals, particularly against the Swiss franc and the yen. The DXY drops by 0.90%, and trades below 105.00.

The combination of lower yields and a weaker dollar pushed XAU/USD to the upside. The yellow metal trades at $1846, the highest level since Monday and is looking at the $1850. A break above could open the doors to more gains.

XAG/USD also hit multi-day highs at $21.89. Earlier on Thursday, bottomed at $21.35. On the contrary, cryprocurrencies remain under pressure. Bitcoin continues to trade dangerously close to the $20,000 level.

Russia’s Novak: Oil market is balanced but there are lots of uncertainties

Following his meeting with Saudi Arabia’s energy minister, Russian Deputy Prime Minister Alexander Novak said on Thursday that they have discussed forecasts on oil prices.

“It is important to continue joint work at OPEC+ to avoid collapse on the oil market,” Novak added and noted that the oil market is currently balanced while acknowledging that there were lots of uncertainties.


EU News

European equity close: Rough ride and a break of the March lows

  • Big drops across the board
  • Stoxx 600 -2.3%
  • German DAX -3.2%
  • UK FTSE 100 -3.1%
  • French CAC -2.3%
  • Italy MIB -3.1%
  • Spain IBEX -1.0%

Other News

US issues fresh Iran sanctions in blow to nuclear-deal hopes

  • Kiss an Iran-nuclear deal goodbye

Reports of Iran taking out nuclear-deal surveillance cameras last week and now this… I don’t think the market was expecting a revival of the Iran-nuclear deal but now it’s dead.

Iran is getting a windfall from its oil already and politically it’s tough there to bow to the US. In terms of oil in the market, there are signs the US is ignoring sanctions-violating oil sales anyway. The sanctions today target petrochemical and shipping companies along with two individuals. These aren’t the kinds of moves you make if you’re trying to make a deal.


Cryptocurrency News

Celsius investors unlikely to provide more funds to bailout lender. Bitcoin below 200 MA

  • According to sources at the Wall Street Journal

The Wall Street journal is reporting that Celcius Network investors are NOT likely to provide more funds to bail out the crypto lender. Last year a private equity firm along with a Canadian pension fund invested $750 million and Celsius valuing the crypto startup at more than $3 billion. They are not looking to invest anymore with one saying:

  • “Few are feeling OK about things,”
  • “There was more risk in this than fully appreciated,”