North American News
US stocks close mixed. Nasdaq lower for the 2nd consecutive trading day
- Dow and S&P up for the 4th of 5 trading days
The major US stock indices are closing the day with mixed results. The Dow industrial average and S&P index are both up for the 4th in 5 trading days. The NASDAQ index closed lower. It is a 2nd consecutive down day for the NASDAQ index. The Russell 2000 moved higher.
The final numbers are showing:
- Dow industrial average up 90.75 points or 0.28% at 31990.03
- S&P index up 5.19 points or 0.13% at 3966.83
- NASDAQ index down -51.44 points or -0.43% at 11782.68
- Russell 2000 up 10.89 points or 0.60% at 1817.77
Looking at the Dow 30 stocks, the gains were led by:
- Chevron, +3.04%
- Travelers +2.31%
- Caterpillar +1.78%
- UnitedHealth, +1.52%
- Dow, +1.3%
The losers in the Dow today included:
- Salesforce, -2.84%
- McDonald’s, -1.33%
- Boeing, -0.9%
- Apple, -0.74%
- Microsoft -0.59%
Looking at the S&P sectors, 3 sectors were lower while 8 rose. The losers today included:
- consumer discretionary is -0.85%
- technology -0.61%
- communication services -0.28%
The biggest gainers in the S&P today included:
- energy +3.71%
- utilities +1.26%
- financials +0.65%
The US treasury auctions off $45 billion of two-year notes at a high yield of 3.015%
- WI level 3.021% at the time of the auction
The US treasury auctioned off $45 billion of of two-year notes at a high yield of 3.015%
- WI level at the time of auction 3.021%
- tail -0.6 basis points vs. six-month average of -0.4 basis points
- bid to cover 2.58% vs. six-month average of 2.63%
- dealers 17.95% vs. six-month average 18.5%
- directs 20.01% vs. six-month average 20.4%
- in-directs 62.04% vs six-month average 61.1%
Commodities
Gold Price drops toward $1710 as market sentiment deteriorates
- Gold turns negative as market sentiment deteriorates.
- XAU/USD slides below $1720, rejected again from above $1730.
- US Dollar recovers momentum, erases losses.
Gold prices failed to hold to gains on Monday, hit after Gazprom’s announcement that will slow flows on the Nord Stream 1 pipeline, triggering a decline in equity prices. XAUUSD printed a fresh daily low at $1714 during the American session.
Earlier on Monday, gold peaked at $1736, slightly below last week high and then lost momentum. It failed to hold above $1730 and then accelerated the decline after the US Dollar gained strength.
Gazprom’s announcement weighed in stocks and pushed energy prices to the upside. The dollar erased losses and turned positive. The DXY rose back above 106.50.
Market participants await the outcome of the FOMC meeting that will start on Tuesday. “We expect the FOMC to follow up June’s large 75bp rate increase with a similar move in July, lifting the target range for the Fed Funds rate to 2.25%-2.50%. In doing so, the Committee would bring the policy stance to its estimate of the longer-run neutral level. We also look for Chair Powell to retain optionality by leaving the door open to additional 75bp rate increases”, explained an analyst at TD Securities.
WTI advances firmly towards $96.50, ahead of API-report and Fed meeting
- The US crude oil benchmark snaps three days of consecutive losses and rises despite US data showing the US economy is slowing.
- A US recession and subsequent China’s Covid-19 lockdowns might weigh sharply on WTI price.
- Libya would increase its oil output from 860K to 1.2 million BPD amidst political turmoil.
Western Texas Intermediate (WTI) rises 1.40% on Monday as US equities gain, portraying an upbeat market mood, despite weaker than expected US economic data paints a gloomy scenario for the economy, reigniting recession fears. At the time of writing, WTI is exchanging hands at $96.65 per barrel.
Traders’ mood is positive, despite dismal US economic data flashing recession
Sentiment remains positive as investors await US corporate earnings reports. The Fed Chicago National Activity Index contracted for the second straight month. At the same time, the Dallas Fed Manufacturing Index also plunged, indicating that the US economy is in worse conditions than estimated. Consequently, as shown by the US Dollar Index, the greenback weakened, dropping 0.09%, a tailwind for WTI.
Fundamentally speaking, the narrative has not changed. Energy prices remain high, a US recession looms, and the Ukraine-Russia conflict extends for five months. US Monday’s data further increased traders’ worries regarding a recession and might cut fuel demand, a headwind for WTI prices.
Additionally to US factors, China’s Covid-19 zero-tolerance restrictions have taken their toll on oil prices. The second-largest economy narrowly missed a contraction in Q2 and grew by 0.4% YoY.
In the meantime, financial analysts remain skeptical about Libya’s output as the country deals with political uncertainty. Nevertheless, Libya’s National Oil Corporation said it would like to bring back 1.2 million BPD in two weeks from 860K. That, alongside EU countries imposing a cap on Russian oil, would keep the black gold prices volatile in the week ahead.
EU News
European equity close: Dax lags as Russia tightens the natural gas taps
- Closing changes for the main bourses
- Stoxx 600 +0.1%
- German DAX -0.5%
- UK FTSE 100 +0.4%
- French CAC +0.3%
- Italy MIB +0.6%
- Spain IBEX +0.2%
Other News
Euro slumps as Russia tightens the Nord Stream 1 taps
- Flows down to just 20% of capacity
The euro and German stock markets slumped after Russia’s Gazprom further curbed natural gas flows through the Nord Stream 1 pipeline.
The move underscores a widespread belief in markets that Russia is going to use natural gas as a key tool to achieve its aims in Ukraine. By cutting the pipeline from about 25% to 20% of capacity it means Germany will not have enough gas to supply its country this winter without cutting back demand. Gas market watchers say it will mean Berlin will have to invoke emergency programs that currently put the burden on industry to cut back first.
Cryptocurrency News
Barclays has scooped a stake in $2bn cryptocurrency firm Copper
Copper provides custody, prime broking and settlement services to institutional investors deploying money into crypto assets.
- Barclays is expected to invest in the firm.
Info via Sky News