North American News
Major US indices close higher for the 4th consecutive week
- NASDAQ index rises over 2% today
The major US indices are closing higher for the 4th consecutive week today, the gains were led by the NASDAQ index which rose over 2%. All 11 sectors of the S&P index rose.
A look at the final numbers shows:
- Dow industrial average rose 424.3 points or 1.27% to 33761.04
- S&P rose 72.86 points or 1.73% to 4280.14
- NASDAQ index rose 267.27 points or 2.09% to 13047.19
- Russell 2000 rose 41.35 points or 2.09% to 2016.616
Looking at the 11 S&P sectors, the biggest gainers include”
- Consumer discretionary, +2.3%
- InformationTechnogy, +2.07%
- Communication Services, 2.02%
The 3 laggards were:
- Energy +0.81%
- Consumer Staples, +0.92%
- Health Care +1.31%
For the trading week, the gains were led by the S&P which rose 3.25%:
- Dow industrial average rose 2.92%
- S&P index rose 3.25%
- NASDAQ index rose 3.08%.
Since the 2022 bottom:
- Dow industrial average has risen 13.85%
- S&P index rose 17.69%
- NASDAQ index is up 23.49% (a bull market)
Although major indices are up nicely from their bottom, they still remain lower on the year
- Dow is down -7.2% down 60.6%
- S&P is down -10.18%
- NASDAQ index is down -16.6%
University of Michigan consumer sentiment prelim survey for August rises to 55.1 vs. 52.5 estimate
- University of Michigan preliminary survey for August 2022
- Sentiment index 55.1 vs. est 52.5 and 51.5 last month
- Conditions 55.5 vs. an estimate of 59.0 and 58.1 last month
- Expectations 54.9 vs. an estimate of 48.4 and 47.3 last month
- 1 year inflation 5.0% vs. last month 5.2%
- 5 year inflation 3.0% vs. 2.9%. The high watermark since 2011 is 3.1%.
Commodities
Gold buyers could not crack the $1800 despite falling US bond yields
- Gold price records gains for four consecutive weeks, up 1.08%.
- Lower US inflation data during the week keeps investors cheerful and hopeful that the Fed will tighten “less” aggressive.
- The UoM Consumer Sentiment report for August exceeded expectations.
- Gold Price Forecast: Range-bound despite broad US dollar weakness throughout the week.
Gold price erases some of Thursday’s gains, though stays below $1800 due to falling US bond yields, spurred by earlier US inflation data revealed during the week. That consumer and wholesale prices are showing signs of easing could deter the US Federal Reserve from tightening aggressively. At the time of writing, the XAU/USD is trading at $1794.49 a troy ounce.
US Consumer Sentiment rises, while US inflation expectations are mixed
Global equities are recording gains, portraying an improved risk appetite. At the time of typing, the University of Michigan Consumer Sentiment for August came better-than-estimated, at 55.1 vs. 52.5 expected, while inflation expectations for one year, easied to 5% from 5.2%, while for a five-year horizon uptick from 2.9% to 3.0%.
Joanne Hsu, director of the survey, said, “In spite of this strength in the labor market and some signs of improvement in inflation, consumer sentiment remains very low by historical standards.”
In the meantime, Fed speakers continued its campaign that they’re not done tackling inflation, led by San Francisco’s Fed Mary Daly. During an interview with Bloomberg on Thursday, she said that inflation is too high, despite consumer and producer prices indicating inflation is slowing. She favors a 50 bps rate hike for the September meeting as a base case, but she does not take off a 75 bps out of the table and would depend on data. She downplayed recession fears and foresaw the Federal funds rate (FFR) to end at 3.4% by the end of the year.
Meanwhile, Richmond’s Fed Thomas Barkin said that inflation data this week is “welcome,” but he wants to see a sustained period under control. He added that more hikes are coming while saying that he’s undecided about the size of the rate increase.
The US Dollar Index, a gauge of the buck’s value against a basket of peers, is up 0.57% at 105.687, while the US 10-year bond yield drops three basis points to 2.857%, a tailwind for gold prices.
Apart from this, tensions between the US and China regarding Taiwan calmed throughout the day. However, Europe’s economic crisis may encounter another factor to consider, with the Rhine River in Germany breached its 40 cms level, which would halt navigation through it
What to watch
Next week, the US economic docket will feature the NY Fed Manufacturing, Housing data, Industrial Production, and Retail Sales.
WTI crude oil futures settle at $92.09
- Down $2.25 or 2.3%
The price of WTI crude oil futures are settling at $92.09. That’s down $-2.25 or 2.3%. The low price reached $91.19. The high price extended to $94.79.
One week ago today, the price closed the week at at $88.53. With the price settling at $92.09, the gain is $3.56 or 4.02%.
EU News
German DAX leads the way in the European stock market despite Rhine river concerns
- Major indices higher on the week
The major European indices are closing higher despite concerns about growth and the German Rhine river concerns.
- German DAX, +0.74%
- France’s CAC +0.14%
- UK’s FTSE 100 +0.47%
- Spain’s Ibex +0.24%
- Italy’s FTSE MIB +0.61%
For the trading week, the major indices are also higher on the week:
- German DAX rose 0.79%
- France’s CAC +1.25%
- UK’s FTSE 100 +0.82%
- Spain’s Ibex +1.59%
A German container operator said they are to all operations to the upper Rhine
- Rhine River fell to a critical 40cm mark the key German waypoint
A German container operator said that they will hold most operations to the upper Rhine as a result of the river falling below the critical 40cm mark a 8 key waypoint.
The rivers decline threatens the economy as well as inflation risks. The transport of coal is reliant on ship traffic on the Rhine.
Other News
Wall Street Journal: Chinese President Xi to meet with US Pres. Biden
- 1st foreign trip for Chinese leader in 3 years
The Wall Street Journal is reporting that China’s Xi is planning on meeting with Pres. Biden in the 1st foreign trip in nearly 3 years.
The China leader is making plans to visit Southeast Asia and meet face-to-face with Pres. Biden in November. This would be the 1st international trip in nearly 3 years and his 1st face-to-face meeting with Biden since he took office.
US, Indo Pacific coordinator: Chinese Pelosi visit as pretext to launch pressure campaign
- US Indo-Pacific coordinator Campbell speaking
- China used Pelosi visit as pretext to launch pressure campaign on Taiwan
- China overreacted to Pelosi visit
- China surrounded Taiwan with more than a dozen warships
- US response has been responsible, steady and resolute
- US opposes any unilateral changes to the status quo from either side
- China’s actions are fundamentally at odds with goal of peace and stability
- US response would patient and effective
- Calls on China to reopen communication channels
Cryptocurrency News
How can traders squeeze in more gains as Shiba Inu price teases a 42% rally
- Shiba Inu price is getting ready to climb to $0.00001743
- Investors pay more attention to SHIB following a positive inflation report from the US
- Shiba Inu price will face immense resistance at $0.000017
Shiba Inu price positively reacted to the United States inflation report, forming a bullish candle on its daily chart. The second-largest meme coin brushed shoulders with $0.00001287 but pulled back to test support highlighted by the 100-day Simple Moving Average (SMA) at $0.00001170. SHIB later recoiled, to trade at $0.00001236 at the time of writing while preparing to make a gigantic move to $0.00001743.