Copper futures rose to a three-week high on expectation a planned ban on all ore exports from Indonesia will curb supplies. Production at PT Freeport Indonesia’s Grasberg copper mine, the world’s second-largest, may fall to 30 percent to 40 percent of maximum output. - See more at: CFD NEWS Update Mon Dec - 9
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U.S Stocks churned higher yesterday, continuing their push into record territory. The Dow Jones Industrial Average rose 60.44 points, or 0.4%, to 15275.69, hitting a high for the sixth time in nine sessions. The S&P 500 gained 8.44 points, or 0.5%, to 1658.78, another record close. The index has only fallen two sessions this month. The Nasdaq Composite Index tacked on 9.01 points, or 0.3%, to 3471.62. Government data released revealed that U.S industrial production fell more than expected in April, contracting 0.5% after expanding a revised 0.3% in March. The Federal Reserve is currently buying $85 billion in assets such as mortgage debt or Treasury holdings from banks each month, a monetary stimulus tool known as quantitative easing that weakens the U.S Dollar to spur recovery, with stock prices rising as a side effect. Yesterday's
data convinced many investors such programs will stay in place for now. Prices at the wholesale level in the U.S disappointed as well, which also fueled sentiment that the Fed will continue with its liquidity injections. Asian markets were also mostly higher, with Japan's Nikkei Stock Average rallying 2.3%, closing at its highest level since December 2007. Japanese stocks were propelled by a weakening of the Yen.
Dow Jones Industrial Average
Blue chips rose 60.44 points, or 0.4%, to 15275.69, hitting a high for the sixth time in nine sessions. The consumer staples and financials sectors led the S&P 500 higher, gaining 1% and 0.9%, respectively. Consumer staples have underperformed the index this month, while financial shares have been its best
performing sector. Leading Dow Jones Industrial Average performers included American Express, up
1.76%, JPMorgan Chase, up 1.65%, and Procter & Gamble, up 1.54% and worst performers included
Hewlett-Packard, down 2.56%, Chevron, down 1.61%, and Alcoa, down 0.70%.
NASDAQ 100
The Technology Heavy Nasdaq tacked on 9.01 points, or 0.3%, to 3471.62. Tech stocks ended in green as
Shares of Google Inc. jumped yesterday passing the $900 mark for the first time as the company kicked
off its developers conference known as Google I/O. Google led the rest of the tech sector to moderate
gains. Google shares closed up 3.3% at $915.89 as the company delivered its opening keynote, which has so far included announcements of new developer tools. Zynga shares jumped more than 4% to $3.48 after the hedge fund Jana Partners bought more than 25 million shares in the social game maker, according to
a recent filing.
Crude Oil
Crude Oil futures dropped yesterday after a slew ofdisappointing economic indicators in Europe and the
U.S dampened spirits and fanned concerns the global economy continues to battle headwinds and will
demand less fuels and energy as a result. U.S inventory data offset losses. Better than expected
U.S. inventory data curbed losses. The U.S Energy Information Administration said in its weekly oil and
gasoline stockpile data earlier that crude oil stocks fell by 624,000 barrels last week, more than market calls
for a decline of 330,000 barrels, suggesting greater demand than anticipated. The U.S is the world’s
biggest oil consuming country, responsible for almost 22% of global oil demand.
Precious and Base Metals
Bullion inched up yesterday after dropping for four straight sessions, as the Greenback eased and
outflows from exchange traded funds halted, but firm equities could lure away investors seeking better returns and keep a lid on Gold's gains. While Bullion has recovered around 8% from a two year
trough hit in April, its safe haven appeal has been battered by record high U.S equities, signs of an
improving U.S economy, and fears of a slowdown in demand by top consumer India. Bullion rose 0.19%
to $1,428.09 an ounce. Gold has slumped more than 14% so far this year, after gaining in the past 12
consecutive years as easy monetary policy burnished bullion's appeal as a hedge against inflation.
Holdings at SPDR Gold Trust, the largest gold backed ETF, were unchanged at 33.8 million ounces earlier
this week after falling almost daily. But the holdings were still within sight of their lowest since March
2009 that was hit after funds cut their exposure to bullion, whose historic fall in April took keen gold
investors and bulls by surprise. Gold prices drew support from a softer Greenback, which made
commodities priced in the U.S Dollar cheaper for holders of other currencies. But a rally is U.S stocks
to fresh highs on yesterday curbed investors' interest in Precious Metal, while a slowdown in
Indian demand for the Yellow Metal also weighed.
Traditional Agricultural
Wheat futures were lower on fund and technical selling, along with spillover from the dollar. Spring
wheat planting conditions have improved thanks to drier weather and warmer soil temperatures, and
parts of South Dakota are getting rain. Soybeans were lower on fund and technical selling. However,
the nearby supply remains tight and although they have eased, there are still shipping delays out of some of Brazil’s largest ports. Corn was lower on fund and technical selling. Most of the Midwest
should see good planting progress over the next couple of days ahead of more rain around the
region. The nearby supply remains tight, so tight in fact, that purchasers from Asia have made the
unusual move of buying from South Africa with Taiwan and Japan both noted as buyers.
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U.S Stock Market DJIA S & P 500 NASDAQ 15055 1630.75 2981.00 -0.07% +0.06% +0.14%
U.S Stocks finished lower yesterday despite better than expected retail sales data, as investors sold for profits after three weeks of gains. Weeks of surprisingly strong monthly jobs reports, weekly jobless claims data and quarterly earnings have pushed stocks to the point that profit taking kicked in yesterday. The Commerce Department reported earlier that U.S retail sales rose 0.1% in April, defying expectations for a 0.3% decline. March's figure was revised down to a 0.5% contraction from a 0.4% contraction. Core
retail sales, which exclude automobile sales, fell by 0.1% last month, in line with expectations. The Federal Reserve and its bond buying program were a hot topic, following a Wall Street Journal report over the weekend that said central bank officials are considering an exit strategy for the massive stimulus measures that have been fueling the economy since late 2008. The Dow Jones industrial average slipped about
0.2%, while the S&P 500 and Nasdaq finished barely higher. But the gain in the S&P 500 was enough to push it to another record close. Asian markets ended mixed after a report showed China's industrial production expanded in April, but failed to meet expectations. The Shanghai Composite declined 0.2% and the Hang Seng dropped 1.5%.
Dow Jones Industrial Average
Blue chips slid 26.81 points, or 0.2%, to 15,091.68. Almost 5.3 billion shares traded hands on U.S
exchanges, or 16% below the three month average, as about seven stocks declined for every five that advanced. Leading Dow Jones Industrial Average performers included Pfizer, up 2.15%, JPMorgan, up 1.49%, and Microsoft, up 1.16% and worst performers included Alcoa, down 1.84%, DuPont, down 1.79%, and Intel, down 1.67%.
NASDAQ 100
The Technology Heavy Nasdaq rose 2 points to close at 3,438. Tech stocks put in a mildly upbeat performance yesterday, as the latest events in thesaga involving the efforts to take Dell Inc. private gained attention among investors. Dell shares rose 7 cents to close at $13.52 after the PC Company asked activist investor Carl Icahn, and Southeastern Asset Management Inc., to provide more information about
Icahn’s alternative takeover proposal. Cisco Systems Inc. edged up by 17 cents a share to close at $21.27. Yahoo Inc. shares shed 1.6%, to close at $26.39. Among other leading tech stocks, losses came
from Hewlett-Packard Co., Oracle Corp. and International Business Machines Corp.
Crude Oil
Crude Oil futures fell yesterday after U.S retail sales beat expectations and sent the U.S Dollar rising, while
Chinese industrial output figures missed market consensus and fanned fears demand may wane in
Asia. A firming U.S Dollar makes oil an increasingly expensive commodity in Dollar denominated exchanges, especially in the eyes of investors holding other currencies. The American Petroleum Institute will release its inventories report today, while tomorrow’s government report could show crude stockpiles rose by 0.2 million barrels to hit the highest level since 1982. The U.S is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand. Oil’s gains were limited as investors remained concerned over the economic outlook in China.
Precious and Base Metals
Bullion prices dropped yesterday after stronger than expected U.S retail sales sparked demand for the U.S
Dollar, which tends to trade inversely from the Precious Metal. Moves in the Gold price this year have largely tracked shifting expectations as to whether the U.S central bank would end its bond buying program sooner than expected. Bullion held on to losses after the U.S Commerce Department said that retail sales inched up by a seasonally adjusted 0.1% in April, confounding expectations for a 0.3% decline. Core retail sales, which exclude automobile sales, fell by a seasonally adjusted 0.1% last month, in line with expectations. Bullion prices came under further pressure from a broadly stronger Greenback, as Dollar priced commodities become more expensive to investors holding other currencies when the U.S Dollar gains. Copper futures came under pressure after official data showed that industrial production in China rose at a slower rate than expected last month. Official data released earlier showed that industrial production in China
rose 9.3% in April, below expectations for a 9.5% increase and following an 8.9% rise the previous
month. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Traditional Agricultural
Wheat futures were higher on short covering and technical buying. The big focus for Chicago, Kansas
City and Minneapolis continues to be crop development weather. Soybeans were higher on commercial buying and short covering. The nearby supply remains extremely tight with no deliveries on the May contract and demand continues to look solid. Gains in the new crop were limited by the recent USDA production
projection and increased export competition from South America. Corn was higher on short covering and commercial buying. The nearby supply of corn is also tight and demand looks good, with a lot of export interest recently from Asia.
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U.S Stocks pushed higher into record territory yesterday as investors focused on earnings and an improved
outlook for the economy. The Dow Jones industrial average rose 0.3% to end at a record high, one day after
the index closed above 15,000 for the first time. The S&P 500 gained 0.4% to also end at another all time
peak. The Nasdaq added 0.5%. Market participants have been encouraged by better than expected corporate earnings for the first quarter, although revenue growth has been weak. Solid German industrial out data and hopes for more better than expected earnings in coming sessions sent stock prices to new fresh highs. There were no major U.S economic reports yesterday, although data on Chinese exports and German industrial output were encouraging. Asian markets also finished the day with gains. The Nikkei added 0.7%, the Hang Seng increased 0.8% and the Shanghai Composite rose 0.5%. European markets also closed higher, with the Euronext 100 index displaying some solid support
Dow Jones Industrial Average
Blue chips rose 14 points, or 0.1%, to 15071 in. The blue chips which mark their first ever close above
15000 on Tuesday, dipped as low as 34 points before changing course. The Dow has risen more than 800
points since initially setting a fresh record high on March 5. With the blue chip average closing yesterday
above 15000 for the first time ever, we looked at some of the biggest point contributors to the Dow’s hyper
run over the past two months. Leading Dow Jones Industrial Average performers included UnitedHealth
Group, up 3.31%, Hewlett-Packard, up 2.73%, and Alcoa, up 2.55% and worst performers included
McDonald's, down 1.32%, Pfizer, down 1.07%, and Microsoft, down 0.93%.
NASDAQ 100
The Technology Heavy Nasdaq climbed 14 points, or 0.4%, to 3410. Technology stocks recovered from a
shaky start yesterday, getting a lift from shares of Facebook, Google, Apple and chip companies.
Facebook rose 1% to close at $27.12, while Google added 2% to close at $873.63 and Apple Inc.
traded up 1.1% to close at $463.84. Semiconductor shares also posted strong gains, with Advanced Micro
Devices up 8% to close at $3.83 and Nvidia Corp. ahead by 1.8% to close at $13.90. Groupon Inc. also saw its stock jump 3.7% to close at $5.59 ahead of the online
daily deals site’s quarterly report. Electronic Arts saw it shares rally 17% to close at $21.56 after the videogame publisher put out a better than expected full year outlook.
Crude Oil
Crude Oil futures rose yesterday after German industrial output numbers beat expectations, though
supply data out of the U.S capped the growth sensitive commodity's gains. The U.S Energy Information Administration said in its weekly report that U.S crude oil inventories rose by 230,000 barrels in the week
ending May 3, well below market expectations for an increase of 1.9 million barrels. Total U.S crude oil
inventories stood at 395.5 million barrels as of last week, the highest level since 1982.
Precious and Base Metals
Bullion shot up yesterday after German industrial output data came in much stronger than expected and
sent investors chasing the Single Currency and ditching the Greenback, often a recipe for firming Gold prices.
Expectations for rising physical demand in Asia pushed up prices as well. Bullion prices have been range
bound this month, torn between a pick-up in physical demand after prices plunged to a more than 2 year
low in mid April and a lack of interest from investors who are shifting their money into equities as Wall
Street gains. SPDR Gold Trust, the world's largest gold backed ETF, said its holdings fell 0.60% to 1,051.47 tonnes yesterday from 1057.79 tonnes on Tuesday. The physical market was mixed in Asia, with dealers in Singapore noting a slowdown in buying interest and those in Hong Kong reporting a shortage in the supply of gold bars that kept premiums at multi month highs. Silver was little changed as investors remained hesitant to return to the market amid a bearish technical outlook. Silver prices were supported
following the release of positive trade data out of China. Copper futures traded just below the previous
session’s three week high yesterday, as sentiment on the industrial metal was boosted following the release
of positive trade data out of China.
Traditional Agricultural
Wheat futures were mixed. Chicago was down on fund selling and spillover from corn. Kansas City and
Minneapolis were higher on concerns about crop conditions in the Southern Plains and planting delays
in the Northern Plains. In addition to the supply and demand update, USDA’s new winter wheat production
estimates are due on Friday. Soybeans were mixed on old crop/new crop spread trade. The nearby supply
remains tight and the trade expects old crop stocks to be unchanged to a little bit smaller than last month.
Corn was lower on technical and fund selling. There are more planting delays in the near term but longer
term forecasts look better for most of the Cornbelt. Friday, old crop ending stocks should be just about
unchanged, while new crop should be significantly larger with the average guess at nearly 2 billion bushels
The U.S Dollar weakened against most currencies yesterday after German industrial output data blew past expectations a day after factory orders did likewise in Europe's largest economy and fueled
demand for risk-sensitive assets. Germany's industrial output, which includes manufacturing, mining, electricity and gas concerns, shot up 1.2% in March, the largest increase in a year and defying expectations
for a 0.1% decline. February’s figure was revised up 0.6% from 0.5%.The numbers strengthen hopes that the German economy, Europe's largest, may post better than expected growth rates for the first
quarter. During the October-December period of 2012, Germany's economy contracted by 0.5%. German factory orders climbed 2.2% in March, defying expectations for a 0.5% decline. The string of good
news out of Germany put to rest recent concerns that the European Central Bank may trim benchmark borrowing costs. Rising stock prices on Wall Street enticed investors out of the U.S Dollar as well. The
Dollar Index, which tracks the performance of the U.S Dollar versus a basket of six other major currencies, was down 0.46% at 81.98.
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The U.S Dollar weakened against major currencies on Friday after the Department of Labor reported that the economy picked up more jobs than expected in April and upwardly revised previous month’s figures.The U.S Department of Labor said the economy added 165,000 jobs in April, above expectations for an increase of 145,000, while job increases for the previous month were revised up to 138,000. The U.S
unemployment rate unexpectedly fell to a four month low of 7.5% from 7.6% in March. The Greenback trimmed gains after a report by the Institute of Supply Management showed that the U.S service sector expanded at the slowest pace in nine months in April. The ISM non-manufacturing purchasing managers’ index fell to 53.1 from 54.4 in March, below expectations for a reading of 54.0. A separate report showed that U.S factory orders fell 4.0% in March, more than expectations for a 2.6% decline. On Wednesday, the Federal Reserve recommitted to its $85 billion a month asset purchase program and indicated that it could increase or decrease the monthly amount, depending on the outlook for inflation and employment. The Dollar
Index, which tracks the performance of the U.S Dollar versus a basket of six other major currencies, was down 0.14% at 82.17.
Euro
The Single Currency ended the day higher against the U.S Dollar on Friday as better than forecast U.S
employment data for April bolstered investor demand for higher yielding assets. Euro trimmed gains after a
report by the Institute of Supply Management showed that the U.S service sector expanded at the slowest
pace in nine months in April. Overall, the EUR/USD traded with a low of 1.3032 and a high of 1.3158 before closing the day around 1.3116 in the New York session.
Yen
The Japanese Yen was lower against the U.S Dollar on Friday after the release of U.S data on Nonfarm
Payrolls. Traders bid the U.S Dollar up against the Japanese Yen due to some positive economic news outof the world’s largest economy. Overall, the USD/JPY traded with a low of 97.88 and a high of 99.25 before
closing the day around 99.02 in the U.S session.
British Pound
The British Pound was higher against the U.S Dollar on Friday after the release of U.K data on Services PMI.Earlier official data showed that Service sector activity in the U.K rose unexpectedly to a seasonally adjusted annual rate of 52.9 last month from 52.4 in the preceding month. Overall, the GBP/USD traded with a low of 1.5480 and a high of 1.5600 before closing the
day at 1.5565 in the New York session.
Canadian Dollar
The Canadian Dollar ended higher against the U.S counterpart on Friday after stronger than forecast U.S
nonfarm payrolls data for April bolstered risk appetite.Loonie shrugged off a report by the Institute of Supply
Management showing that the U.S service sector expanded at the slowest pace in nine months in April.
Overall, USD/CAD traded with a low of 1.0074 and a high of 1.0130 before closing the day at 1.0075 in the New York session.
Australian Dollar
The Australian Dollar ended Friday’s session sharply higher against its U.S counterpart, as market sentiment
improved after official data showed that the U.Seconomy added more jobs than expected in April. This
week investors will be anticipating an interest rate decision by the Reserve Bank of Australia, as well as the
release of Australian retail sales and employment data. Overall, AUD/USD traded with a low of 1.0241 and a high of 1.0321 before closing the day at 1.0318 in the
New York session.
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The U.S Dollar flat despite U.S pending home sales rose in March
Euro looks to German CPI data to set stage for ECB rate decision
British Pound slides as the unwind in stimulus expectations slow
Japanese Yen ignores lowest jobless rate since 2008, strong household spending
The U.S Dollar traded lower against major currencies yesterday amid
speculation the Federal Reserve will decide at a monetary policy this
week to keep stimulus programs in place, which weaken the U.S
Dollar to encourage revival. The U.S gross domestic product rose
2.5% in the first quarter, missing expectations for a 3.0% increase
though an improvement from a 0.4% rise in the previous quarter.
The news weakened the Greenback by fueling sentiments that the
Federal Reserve's monetary stimulus programs will stay in place for
longer than expected. Stimulus tools such as the Fed's monthly $85
billion bond buying program weaken the U.S Dollar to spur recovery.
The Federal Reserve will announce its decision on interest rates and
monetary policy on Thursday. The U.S data released earlier revealed
that U.S consumer spending rose 0.2% in March, above expectations
for a 0.1% increase, which gave the U.S Dollar some support. The
National Association of Realtors said its pending home sales index
rose by 1.5% in March, beating expectations for a 1% gain. The
Dollar Index, which tracks the performance of the U.S Dollar versus a
basket of six other major currencies, was down 0.42% at 82.22.
Euro-Yen
EUR/JPY is trading below 14 and above 50, 100 days
moving average. Fast stochastic is giving a bearish tone
and MACD is also issuing a bearish stance. The Relative
Strength Index is above 55 and lies below the neutral
zone. In general, the pair has gained 0.17%
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The US dollar had an excellent week, rising ondoubts about the fiscal cliff deal and the not-so-dovish meeting minutes from the Fed. Rate decisions in the UK and the EU as well as US unemployment claims and Federal Budget Balance are the highlights of this week. Here is an outlook on the major market movers ahead.
Non-Farm Payrolls came out within expectations: 155,000 extra jobs, simillar to the 161,000 registered in November, The unemployment rate increased now stands at 7.8%, still far from the Fed’s 6.5% target for changing policy. The meeting minutes from the Fed indicated that some members wanted to a shift in monetary easing at the end of 2013. This not only helped the dollar, but could have also changed the reaction to US indicators: back to the old normal. After the very sharp fall of the yen, many ask if it’s time for a pullback. The focus will return to the old continent now. Let’s Start
UK rate decision: Thursday, 12:00. The BOE isn’t likely to cut the interest rate in the near future nor in the second half of 2014. When Carney takes control in mid 2013, we could see a more hawkish approach, especially if inflation picks up once again. A rate hike could be seen in early 2014. For the upcoming meeting, no change in policy is expected. The economic situation in the UK isn’t good, with a danger of a “triple dip” recession. However, not all data is bad, and the BOE could wait for another month before announcing new QE.
EU rate decision: Thursday, 12:45. press conference at 13:30. There is more than a 50/50 chance that the ECB will cut the main interest rate from 0.75% to 0.50%, but this isn’t priced in. With PMIs pointing to more weakness in manufacturing and with a weak holiday season, the ground is ready for the ECB to act. In addition, inflation is almost at the 2% target, and is forecast to slide. Mario Draghi will probably refrain from pushing the deposit rate into negative territory and leave this policy option to a future deterioration. It’s important to note that bond yields of Spain and Italy are significantly lower now. The negative rate ammunition could be kept dry for another round of the crisis. If the ECB does announce a negative deposit rate, this would be another step in the “currency wars” and the euro could tumble down.
US Unemployment Claims: Thursday, 13:30. The number of Americans seeking unemployment benefits increased unexpectedly to 372,000 from 362,000 in the preceding week, but the increase may be due to the winter holidays distorting readings for the second week. The job market in general is in a positive condition with increased hiring and fewer layoffs. A drop to 161,000 is expected now.
Swiss inflation data: Friday, 8:15. Consumer prices dropped an unexpected 0.3% in November reducing the headline annual inflation rate from minus 0.2% in October to minus 0.4%, its first fall since June. Energy products were the main cause for this decline. This ongoing trend could lead to deflation in case domestic demand weakens in the coming months. A decline of 0.1% is forecasted.
US Trade Balance: Friday, 13:30. US trade deficit widened in October to $42.2 billion from $40.3 billion in September following a sharp drop in exports outweighing the decline in imports, further evidence of the slowdown in global growth. Economists expected a wider deficit of $42.7 billion. The decline in exports indicated weaker demand from Europe to Asia and slower imports signals slower IS growth. A small improvement to a deficit of 41.1 billion is forecasted this time.
US Federal Budget Balance: Friday, 19:00. The US government’s deficit widened in November to $172.1 billion, well above predictions. However the deference is due to calendar timing of payments. The Treasury claims the budget is running only slightly worse than last year, at $269 billion vs $266 billion. A major improvement to $22.1 billion is expected now.
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