North American News
US equities find some life late but the weekly chart and seasonals are ominous
- S&P 500 halves its losses
Closing changes for the main US markets:
- S&P 500 -0.6%
- Nasdaq composite -0.8%
- Russell 2000 -1.7%
- DJIA -0.4%
On the week:
- S&P 500 -4.8% — worst since week ending June 17
- Nasdaq composite -5.5%
- Russell 2000 -4.9%
- DJIA -4.1%
If that’s not bad enough, next week is the worst week on the calendar seasonally for equities, over the past 50 years.
UMich September US prelim consumer sentiment 59.5 vs 60.0 expected
- US consumer sentiment and inflation expectations data from the University of Michigan
- Prior was 81.2
- Current conditions 58.9 vs 60.8 expected (prior 55.5)
- Expectations 59.9 vs 59.7 expected (prior was 54.9)
- 1-year inflation 4.6% vs 5.0% prior — lowest since last Sept
- 5-10 year inflation 2.8% vs 3.0% prior — lowest since July 2021
Commodities
Silver reclaims the $19.00 mark, gaining 3.86% in the week
- Silver price is erasing Thursday’s losses up by almost 2% on Friday.
- September’s US economic data justifies the Fed’s 75 bps rate hike.
- The US Consumer Sentiment improved, showing US citizens resilience despite a worsening economic outlook.
The silver price climbed as the Wall Street close looms, gaining 1.85% during the day, caused by a soft US dollar, while US Treasury yields stalled. Positive US economic data relieve investors’ worries about the Federal Reserve hiking 100 bps instead of 75 in the next week’s meeting, while a risk-off impulse keeps global equities in the red. At the time of writing, the XAG/USD is trading at $19.54, back above the $19.00 mark.
XAG/USD climbs due to US T-bond yields unchanged, and a soft US dollar
Earlier, US economic data revealed that US Consumer Sentiment continued improving, despite increasing fears that the US central bank tightening would spark a US recession. The reading ticked to 59.5, lower than estimates but above the prior month’s reading of 58.6.
“After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy.” Inflation expectations in the same report for 1-year dropped to 4.6% vs. 4,8% in August,” Joanne Hsu, director of the UoM Survey, said.
Meanwhile, the greenback is fluctuating during the session, about to finish unchanged. The US Dollar Index is down 0.02%, at 109.718, while the US 10-year benchmark note rate is at 3.449%, almost flat.
These previously mentioned factors bolstered appetite for the non-yielding metal, gaining traction, and extending its weekly gains to 3.86%.
Aside from this, US data reported during the current month is giving the green light to Fed officials to raise rates by ¾ of a percent to the 3-3.25% range. Even though there has been speculation that the Fed might go 100 bps, analysts at Societe Generale think otherwise.
“The FOMC meets on the 21 September, and we expect a third 75-bp rate hike. There has been some talk of 100bp, but Fed officials pushed back on that option earlier and we do not expect them to take it now. Longer term, the extension of the SEP through 2025 offers much more insight into their business cycle views,” analysts at Societe Generale wrote.
Saudi Arabia and Russia see $100 as a fair price for oil – report
- Reuters report, citing sources familiar
Oil has been catching a bit of a bid in the last hour and some of that is due to a report from Reuters highlighting the thinking of Saudia Arabia and Russian leaders.
Saudi Arabia and Russia, the de facto leaders of the OPEC+ oil producer group, see $100 a barrel as a fair price that the global economy can absorb, sources familiar with government thinking in the two countries told Reuters.
EU News
European equity close: Nearing the August lows after a fourth day of declines
- Closing changes for the main European bourses
- Stoxx 600 -1.5%
- FTSE 100 -0.5%
- German DAX -1.7%
- French CAC -1.2%
- Spain IBEX -1.4%
- Italy MIB -1.1%
Other News
FedEx warning has stock futures deeply negative
- S&P 500 futures down 1.3%
Late yesterday, FedEx offered a poor outlook for fiscal 2023 and that sent its stock 21.5% lower. The company is an economic belwether and it’s significantly damped the mood.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,” said Raj Subramaniam, FedEx Corporation president and chief executive officer in a release. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”
Cryptocurrency News
US Treasury Secretary Janet Yellen sees opportunity in cryptocurrencies
- Janet Yellen believes if risks are mitigated, digital assets and other emerging technologies could offer significant opportunities.
- US President Joe Biden’s executive order produced a few answers in the new crypto report from the US Treasury.
- Proponents are convinced that the federal government’s review of crypto is yet to offer a roadmap for oversight and crypto regulation.
Whether the US will use a central bank digital currency or not remains unknown. Despite the uncertainty, the US Treasury Secretary sees opportunities in crypto.