North American News
US stocks close on the highs as earnings reports roll in
- Closing changes
- S&P 500 up 43 points to 4076, up 1.1%
- Nasdaq up 1.7%
- Russell 2000 +0.2%
- Toronto TSX Comp +0.4%
It was all about tech today with Tesla leading the charge with an 11% rally.
US sells 7-year notes at 3.517% vs 3.538% WI
- US auctions off $35 billion in 7-year notes
- Prior was 3.921%
- The notes traded at 3.538% in the when issued market before the sale
- Bid to cover 2.690 vs 2.450 prior
US Q4 advance GDP +2.9% vs +2.6% expected
- The first look at Q4 US GDP
- Final Q3 reading was +3.2% annualized
- Q2 was -0.6% annualized
Details:
- Consumer spending +2.1% vs +2.3% prior
- Consumer spending on durables +0.5% vs -0.8% prior
- GDP final sales +1.4% vs +4.5% prior
- GDP deflator +3.5% vs +3.3% expected
- Core PCE +3.9% vs +4.0% expected
- Exports -1.3% vs +14.6% prior
- Imports -4.6% vs +-7.3% prior
- Net trade added 0.56 pp to GDP vs adding 2.86 pp in Q3
- Inventories added 1.46 pp vs a cut of 1.19 pp in Q3
- Govt added 0.64 pp vs +0.65 pp in Q3
US weekly initial jobless claims 186K vs +205K expected
- The weekly initial US jobless claims and continuing claims highlights
- Prior at 190K was the lowest since April 28, 2022
- Four week moving average 197.5K vs 206.0K prior
- Continuing claims 1.675m vs 1.647m prior
US December new home sales 616K vs 617K expected
- The latest new home sales data
- Prior was 640K (revised to 602K)
- Sales up 2.3%
- Prior sales +5.8% (revised to +0.7%)
Commodities
Gold bears are on the prowl after United States Gross Domestic Product strength
- Gold price is now looking over the abyss with a break of $1,900 eyed.
- The Gold price bears moved in on the strong United States of America data on Thursday.
- The Federal Reserve sentiment is now mixed, supporting the US dollar and US Treasury yields higher.
Gold price dropped to a low of $1,918.69 on Thursday due to a stronger US Dollar on generally solid United States of America economic data on the day that may prompt the Federal Reserve, Fed, to keep interest rates higher for longer. The market was wrong-footed in anticipation of ongoing disinflationary numbers and this has led to a move up to a critical technical level in the US Dollar in the set-up for the next bout of important data from the US economy.
The rally in the US Dollar comes after the United States of America reported its fourth-quarter Gross Domestic Product as rising by 2.9%, more than the consensus estimate for a 2.8% rise. Initial jobless claims also fell more than expected, signalling a tight labour market. The combined data has led to the belief that the Federal Open Market Committee will turn back to dovish when it meets next week and ease off the interest-rate hike.
Gold price focus
The focus will now then turn to the Personal Consumption Expenditure data on Friday before we head into the Federal Reserve meeting week. Ahead of this data, WIRP suggests a Federal Reserve interest rate hike of 25 bp on February 1 is fully priced in, with less than 5% odds of a larger 50 bp move. Another 25 bp hike on March 22 was about 80% priced in, while one last 25 bp hike in Q2 is only 35% priced in. Nevertheless, those odds are likely a touch lower and for that, the IUS Dollar index was last seen up 0.40 points to 102.00 from a low of 101.504. US Treasury Bond yields were also on the rise, increasing the opportunity cost of owning gold. The US 10-year note was last seen paying 3.52% at the highest of the day.
EU News
European equity close: Gave some back but still ended with gains
- Closing changes in Europe
- Stoxx 600 +0.4%
- German Dax +0.3%
- France’s CAC +0.8%
- UK’s FTSE 100 +0.2%
- Spain’s Ibex +0.9%
- Italy’s FTSE MIB +1.1%
EU is mulling a price cap on Russian refined products rather than a ban
- Ban set to take place Feb 5
The EU is considering a Russian diesel price cap at $100 instead of an import ban, according to a reprot. It would also cap discounted Russian fuel exports at $45, citing people familiar.
The shift highlights worries about refined product shortages. The thinking here is that a price cap rather than a ban would allow Russia to keep production high.
Other News
Steel Dynamics CEO says he doesn’t see the doom and gloom everyone else is seeing
- That’s a good sign for construction
One industry that’s tightly connected to industrial demand is steel. Manufacturing is certainly slowing but there’s plenty of stimulus in the pipeline due to infrastructure and green energy bills.
Shares of Steel Dynamics today are up 4% to a record high and that tells you all you need to know about demand. If it’s not enough, just now on the conference call, executives said they don’t see the doom and gloom that everyone else is seeing. They called order input rates across most sectors ‘solid’. The one exception was residential building.
Cryptocurrency News
Cardano bulls need to hurry up as bears want to trigger 15% decline
- Cardano price has seen its price action increase by 56% in January.
- ADA price sees bulls chewing on a very difficult area to break through.
- Bulls need to speed up the breach as bearish headwinds are emerging and growing quickly.
Cardano (ADA) price has had a steep rally that has seen a technical path respecting the several barriers we have sketched on the daily price chart. From the looks of it, bulls are currently fretting about how to breach above $0.388 as clearly that level and below near $0.384 are forming issues. Meanwhile, in the background, more tail risks are emerging again and are causing headwinds and headaches, which means that more bulls will be lured into profit-taking with a structural risk of this rally breaking down. Here is what you need to watch.
Cardano price sees bears catching up
Cardano price has seen bulls recovering ground with little resistance these past few weeks as markets ignored comments from central bankers and had the data on their side as clearly inflation is further declining in a straight path. It would, however, be foolish to think or believe that inflation would easily go as it has come. While several sectors are issuing warnings again on the shortage of certain basic materials, morale and access to credit are declining worldwide.
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