North American News
Stocks close lower. Nasdaq gives up modest gains into the close
- 3 day declines for the major indices.
The Nasdaq index had the best shot to close higher on the day. The index was up going into the last hour of trading but gave up their modest gains into the close, and is closing fractionally lower (really unchanged).
The final numbers are showing:
- Dow industrial average fell -154.04 points or -0.47% at 32909.60
- S&P fell -9.28 points or -0.22% at 4128.72
- Nasdaq fell -0.26 points (call it unchanged) at 12381.31.
- Russell 2000 did eke out a small gain of 3.3998 points or +0.18% at 1919.14
The S&P index had 7 of 11 sectors moving lower today. The gainers including:
- Energy, +3.62%
- Materials, +0.98%
- Consumer Discretionary, +0.32%
- Industrials, +0.18%
The losers were led by:
- Real Estate, -1.45%
- Health, -1.39%
- Communication Services, -0.72%
- Consumer Staples, -0.45%
Looking at the Dow 30, the winners are:
- Chevron, +3.21%
- Caterpillar, +2.85%
- Dow, +2.21%
- Boeing, +0.68%
The losers today:
- P&G -1.94%
- Home Depot, -1.77%
- United Health -1.61%
- Verizon, -1.56%
US treasury auctions off $44 billion of two year notes at a high yield of 3.307%
- WI level 3.293%
- high yield 3.307%
- Tail 1.4 bps vs 6 month average of -0.3 bps
- Bid to cover 2.49X vs 6 month avg of 2.59X
- Dealers 23% vs 6-month average of 17.4%
- Directs 17.3 vs 6-month average of 22.2%
- Indirects 59.7% vs 6-month average of 60.4%
US: New Home Sales decline by 12.6% to 511,000 in July
- New Home Sales in the US fell sharply in July.
- The US Dollar Index continues to push lower toward 108.00.
Sales of new single‐family houses declined by 12.6% in July to a seasonally adjusted annual rate of 511,000, the data published jointly by the US Census Bureau and the Department of Housing and Urban Development showed on Tuesday.
“The median sales price of new houses sold in July 2022 was $439,400,” the publication further revealed. “The average sales price was $546,800.”
Commodities
WTI: Backwardation tamed by Saudi Arabia
- Oil prices rallied on Tuesday while Saudi Arabia warning that OPEC+ could cut production.
- Iran remains the wild card in the energy sector.
When oil futures trade at lower levels than spot prices and near-term futures, that’s known as backwardation and it’s been a theme in 2022 that has seen Saudi Arabia warning that OPEC+ could cut production to narrow a gap between high prices in the physical oil market and weaker futures prices. The comments have sent the spot price higher on the day. At the time of writing, WTI is trading at $93.60, up 3.32% but of the highs of $94.19.
Saudi oil minister Prince Abdulaziz bin Salman told Bloomberg News that OPEC+ could cut production when the group next meets to raise prices. However, the wild card in the oil market stays with Iran. ”When it comes to the potential Iran deal, no news has been good news,” analysts at TD Securities explained.
”While fears of an imminent deal had seen a sharp slump in our gauge of energy supply risk, raising the alarm on the bull market in oil, energy traders have grown increasingly skeptical of the legal and political risks associated with a potential resolution. After all, the clock is ticking for a resolution that has the potential to drive a continued and substantial erosion of supply risk premia, but a potential resolution appears plagued with legal and political risks which blur the outlook,” the analysts at TD Securities explained.
The analysts warned that failure to reach a deal would suggest that oil is still on a runaway train, as even slowing demand growth would still continue to sap the world’s spare capacity.
On the other side, of the coin, “how a lower production volume is supposed to restore the balance between the futures market and the physical market remains unclear, though. Possibly Saudi Arabia wants to prepare for a scenario in which the US agrees to a renewal of the nuclear agreement with Iran, thereby allowing the latter to return to the oil market. The fact that Saudi Arabia appears to regard an oil price of around $90 as too low could be seen by speculators as an invitation,” Commerzbank said in a note.
OPEC+ may lean towards oil output cuts when and if Iranian production returns – Reuters
Citing nine OPEC sources familiar with the matter, Reuters reported on Tuesday that OPEC and its allies, the group known as OPEC+, may lean towards oil output cuts when and if Iranian production returns depending on the revival of the nuclear deal.
On Monday, Saudi Arabia’s energy minister told Bloomberg that OPEC+ may be compelled to reduce oil production, as the physical and futures markets get increasingly strayed away from fundamentals
EU News
European equity close: Third day of declines
- Closing changes for the main European bourses
Closing changes for the main European bourses:
- German DAX -0.3%
- UK FTSE 100 -0.7%
- Stoxx 600 -0.3%
- French CAC -0.4%
- Italy MIB +0.9%
- Spain IBEX -0.7%
Other News
US natural gas prices fall as Freeport pushes back full restart timeline for LNG facility
- Update from Freeport LNG
The expected timeline for a restart of the Freeport LNG terminal in the US was mid-to-late October but that’s been pushed back by an update today.
That will mean more gas is stuck in the US and unavailable for export to Europe and the rest of the world. The huge 2 bcf terminal suffered an explosion on June 8 and has been under repair. The new timeline is for initial production restarting in early-to-mid November and ramping up until the end of the month. Notably, it will continue to operate at only 85% of export capacity until March 2023.
Cryptocurrency News
Apecoin Price Prediction: APE will prove to be no match against the mighty dollar
- Apecoin price is still good to return some intraday or short-term profit.
- APE price will be resilient enough to withstand the current macroeconomic environment.
- Expect more dollar strength to trickle in towards fall and winter as the US is set to outperform.
Apecoin (APE) price action is having issues making up its mind as investors are fretting about what their next step will be, as several warnings are being issued left and right by banks, central banks and economic indicators that the turmoil on inflation and wage pressure is not over at all. As investors see their income decrease by the rise in the cost of living, less money can be allocated towards cryptocurrencies to invest. The US dollar is back below parity against the euro, but the greenback still has plenty of room to go, which is bad news for APE price action could drop already 40% solely on the back of that.