North American News
US stocks snapped it’s a 3 day win streak
- Major indices did in an up and down session
The major US stock indices are closing down on the day with each of the indices snapping a 3 day win streak. Consumer staples led the gains in the S&P. Energy was the biggest loser.
At the day’s extremes
- Dow was up up 126.9 points and down -204.34 points
- S&P was up 14.11 points and down -35.66 points
- NASDAQ index was up 109.03 points and down -118.71 points
Looking at the final numbers of the major indices shows:
- Dow industrial average fell -46.73 points or -0.14% at 32798.39
- S&P index fell -11.64 points or -0.28% at 4118.64
- NASDAQ index was down -21.7 points at -0.18% at 12368.99
- Russell 2000 fell 1.9178 points or -0.10% at 1883.31
Looking at the Dow 30, the biggest gainers were:
- Boeing +6.14%
- Procter & Gamble +2.91%
- Intel +1.79%
- Home Depot +1.65%
- IBM +0.96%
The biggest losers in the Dow 30:
- Chevron -1.95%
- Caterpillar -1.64% (the report earnings tomorrow)
- Travelers -1.58%
- Dow -1.43%
- United health -1.35%
Looking at the 11 sectors of the S&P, 7 sectors decline while for advanced:
- energy -2.18%
- financials -0.9%
- real estate -0.89%
- materials -0.81%
The biggest gaining sector:
- consumer staples +1.21%
- consumer discretionary +0151%
- industrials +0.12%
- utilities +0.1%
It’s early in the quarter, but Atlanta Fed GDPNow for 3Q falls to +1.3% from +2.1% last
- The Atlanta Fed estimate in the 2nd quarter was close close
Earlier today – and for good order – the Atlanta Fed announced their estimate for 3Q growth according to their model. After debuting at 2.1% – after the -0.9% fall in the 2nd quarter – the 2nd estimate for Q3 fell to 1.3%.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 1.3 percent on August 1, down from 2.1 percent on July 29. After this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management and the construction spending report from the US Census Bureau, the nowcasts of third-quarter real personal consumption expenditures growth and real gross private domestic investment growth declined from 2.5 percent and -1.4 percent, respectively, to 1.5 percent and -2.1 percent, respectively.
Commodities
Gold hits a two week high around $1775 post soft US PMI
- Gold price advances on falling US Treasury yields and US dollar weakness.
- US equities rise, despite cooling manufacturing data, illustrating Fed actions are being felt.
- Fed policymakers pushed back against a “dovish” tilt, per the market’s reaction.
- Gold Price Forecast (XAUUSD): If buyers reclaim $1800, the bias shift to neutral-upwards; otherwise, a leg down to $1730 is viable.
Gold price climbs for the fourth consecutive day, extending its ongoing recovery. The US dollar remains heavy, undermined by falling US Treasury yields, as investors assessed that the Federal Reserve might hike rates, but not as aggressive as expected. At the time of writing, XAUUSD is trading at $1771.15, up 0.32%.
US ISM held stubbornly to expansionary territory, price index down from 78.5 to 60
European and US equities fluctuate, reflecting a fragile sentiment. Meanwhile, tensions between China and the US, with US House Speaker Pelosi visiting Taiwan, increased military activity on China’s side. That dragged European equities lower, while traders are optimistic that the Fed’s “dovish” pivot, as perceived by the markets, was reinforced by weaker US ISM PMI readings.
The Institute for Supply Management (ISM) reported that July’s Manufacturing PMI clung to expansionary territory, beating the estimations. Nevertheless, it trailed June’s reading, while some components, like new orders, dropped while the price index plunged, showing signs that higher interest rates are beginning to be felt.
In the meantime, the Minnesota Fed President Neil Kashkari commented that he was surprised by the markets’ reaction that the Fed would soon begin to “back off” and said that 50 bps rate hikes at upcoming meetings would be reasonable. He added that higher core inflation readings would push him for another 75 bps increase.
All that said, XAUUSD prices soared to fresh four-week highs around $1775.39, bolstered by broad US dollar weakness. The US Dollar Index (DXY), a gauge of the buck’s value vs. six currencies, falls towards 105.427, down 0.38%, undermined by US Treasuries tumbling across the yield curve. Additionally, real yields, as depicted by the US 10-year Treasury Inflation-Protected Securities (TIPS) bond yield, sit at 0.109%, down from YTD highs of 0.893%, a headwind for higher gold prices.
WTI crude oil futures settle at $93.89
- Down $4.73 or 4.8%
The price of WTI crude oil futures are settling at $93.89. That’s down -$4.73 or 4.8%. The low price reached $92.42. The high price extended to $98.65.
The low reached the lowest level since July 15. The July low on the 14th came in at $90.56.
EU News
European equity close: Middling start to the week
- Closing changes for the main European bourses
It’s August and European offices are cleared out for holidays.
- UK FTSE 100 flat
- Stoxx 600 -0.1%
- German DAX +0.2%
- French CAC-0.1%
- Italy MIB +0.3%
- Spain IBEX -0.7%
Other News
White House says Pelosi will make her own decision on Taiwan
- White House distancing itself from Pelosi
- White House says it doesn’t support Taiwan independence
- Pelosi has not confirmed any travel plans to Taiwan
- We have been clear from the beginning that she will make her own decisions
- Nothing has changed about our policy on Taiwan
- She has a right to visit Taiwan as other US lawmakers have
- Nothing about Pelosi visit would change the status quo
Looking ahead, here are some other interesting comments:
- China appears to be positioning itself to take further steps in coming days that could include military provocations
The White House had a list of possible provocations and said ‘we will not take the bait’.
Cryptocurrency News
Bitcoin Price Prediction: “Anything too clean is probably dirty”
- Bitcoin price shows textbook sell signals on the daily chart.
- BTC price coiling into a wedging-like pattern likely to be problematic for bears in the market.
- Invalidation of the macro thesis remains a break at $13,880.