North American News
Mixed results for the major US indices
- Modest changes across the board in up and down trading
The major US indices are ending the day with mixed results. Similar to Friday to trade where the Dow rose modestly, and the S&P and NASDAQ fell, that is the same pattern today. However the gains and losses were very modest with -0.12% the biggest change.
Closing levels:
- Dow industrial average rose 29.05 points or 0.9% at 32832.53
- S&P fell -5.15 points or -0.12% at 4140.05
- NASDAQ index fell -13.09 points or -0.10% at 12644.47
- Russell 2000 rose 19.3 points or 1.01% at 1941.05
Meme stocks were back in focus today and of late:
- Bed Bath and Beyond rose 39.83%
- Express rose 2.28%
- GoodRX rose 9.76%
- Gamestop rose 8.55%
- AMC rose 7.75%
- Chewy rose 7.44%
Looking at the Dow 30:
- Walt Disney +2.32%
- Dow, +1.3%
- Walgreens +1.26%
- Merck +1.22%
- Honeywell +0.88%
Losers in the Dow included:
- Visa, -1.22%
- J.P. Morgan -1.22%
- McDonald’s -0.96%
- Verizon -0.93%
- Microsoft -0.92%
US July employment trends 117.63 vs 119.38 prior
- Employment trends data from The Conference Board
- Prior was 119.38 (revised to 118.70)
- Six of eight components decreased, led by jobless claims
NY Fed 1-year inflation expectations 6.2% vs 6.8% prior
- The latest consumer survey from the New York Fed
- 3 year expectations to 3.2% from 3.6%
- 5 year expectations to 2.3% from 2.8%
- Consumer see home prices up 3.5% in the next year vs 4.4% in June
- Year-ahead earnings growth unchanged at 3.0%
- 1-year household income growth to 3.4% vs 3.2% in June
- Consumers see a 40.2% likelihood of higher unemployment rate a year from now vs 40.4% prior
- Spending growth seen down 6.9% from 8.4%
- Rising share of consumers say credit hard to get
- Fewer expect household financial situation to deteriorate in the year ahead than in June
Commodities
Gold bulls stay the course but bears are lurking
- Gold price is attempting a move higher but faces headwinds, both technically and fundamentally.
- The US CPI data on Wednesday could be pivotal for the gold price.
At $1,787.86, the gold price is firm at the start of the week, trading 0.7% higher having climbed from a low of $1,771.22 to a high of $1,790.04. However, the $1,800 psychological level remains elusive ahead of a critical inflation report due on Wednesday from the US calendar which could be pivotal for the yellow metal, US dollar and US yields.
Meanwhile, the US dollar has given back some of the gains made after last week’s blockbuster Nonfarm Payrolls data that has soothed some of the fears about an economic slowdown.
Nevertheless, investors remained cautious as the payrolls data added to expectations of a hawkish US Federal Reserve. US rate futures have priced in a 67.5% chance of a 75-basis-point hike at the Fed’s September meeting, up from about 41% before payrolls data on Friday beat market expectations.
However, US 10-year yields remain below the recent highs of 2.869% so far. There is daily support in Monday’s lows near 2.7610% at this juncture which could mean the relief is temporary with the focus now on consumer prices data on Wednesday. The inflation data will help to confirm if the Fed’s tightening efforts have been successful in starting to tame inflation or if continued Fed tightening is needed and could be a critical milestone for forex markets and indeed the euro.
- US CPI Preview: It is the hard core that counts, five scenarios for critical inflation data
”While market pricing has shifted more toward another 75bp hike in September, it is far from locked in and with CPI data set for release midweek, the yellow metal has been able to hold firm,” analysts at TD Securities noted.
However, ”alternatively,” the analysts warned, ”prop traders in particular still hold a significant amount of long positions, and a continuation of strong economic data could be the catalyst needed to see an unwind. In this sense, we have yet to see capitulation in gold, suggesting the pain trade is still to the downside, and we expect the recent rally will ultimately fade.”
EU News
European stocks join the party with strong closing gains
- Closing changes
- Stoxx 600 +0.8%
- German DAX +0.9%
- UK FTSE 100 +0.7%
- French CAC +0.9%
- Italy MIB +0.6%
- Spain IBEX +1.3%
Other News
The meme stocks are back in full flight and the Fed is watching
- How can the Fed not hike further?
There was barely a hint of a Fed pivot and meme stock mania has come back with a vengeance.
Gamestop was just halted, up 12.7% while AMC is up 17% and BBBY is up 54%.
Obviously, the Fed isn’t taking its cues strictly from meme stocks but they’re certainly a sign that the animal spirits are back.
You have to sympathize with the FOMC, which has hiked rates to 2.25-2.50% in short order only to see risk assets explode to the upside again.
Combine that with an employment market that is still cranking out 500,000 jobs per month and there’s no reason to lay off the hikes. Yes, gasoline prices are down and that will make for a soft CPI print on Wednesday (and again next month) but ‘financial conditions’ are a key Fed metric and that pretty much means ‘stock market strength’. Lately it’s been a one-way ticket for equities and dip buyers rush in.
If the Fed hikes to +3% that’s not exactly ‘cheap money’ anymore but they might be reminded that despite all the ‘recession’ talk, there’s a lot of money on the sidelines.
Cryptocurrency News
Ethereum completes the $800 round trip as it breaks $1800. What’s next
- Ethereum is back to where it started the summer
Etheruem has completed one big technical lap, can it complete another?
Ethereum is up 7% today as it reaches an important technical target, completely wiping out the June loss. In late July it took a run at the $1800 level but fell just short. After a retracement to $1550 it re-gathered momentum and completed the job today.