Weekly Wrap-Up 23 May 2014

May 23rd, 2014
in contributors, syndication, forex

U.S. stocks rise on cheery new homes sales data; Dow up 0.38%

by Staff, U.S. stocks rose on Friday after official data revealed more new homes were sold in the U.S. in April than markets were expecting, a sign the once-battered housing sector continues to recover.

At the close of U.S. trading, the Dow 30 rose 0.38%, the S&P 500 index rose 0.42% to a record-high 1900.53, the first time ever over the 1900 mark, while the NASDAQ Compositeindex rose 0.76%.

Follow up:

The housing sector, which threw the U.S. economy into the worst downturn since the Great Depression and lagged on its recovery for years, is on the mend.

The Census Bureau reported earlier that U.S. new home sales rose 6.4% to 433,000 units in April from 407,000 units in March, whose figure was revised up from a previously estimated 384,000. Analysts had expected new home sales to rise to 425,000 units last month.

A day earlier, the National Association of Realtors reported that existing home sales increased 1.3% in April to an annual rate of 4.65 million units, and hopes that the U.S. housing sector is improving strengthened demand for the dollar on Friday.

In other news, computer maker Hewlett-Packard Company (NYSE:HPQ) announced plans to lay off 16,000 workers as part of an ongoing turnaround plan.

Leading Dow Jones Industrial Average performers included Nike Inc (NYSE:NKE), up 1.28%, Visa Inc (NYSE:V), up 1.21%, and Walt Disney Company (NYSE:DIS), up 1.18%.

The Dow Jones Industrial Average's worst performers included Pfizer Inc (NYSE:PFE), down 0.56%, McDonald's Corporation (NYSE:MCD), down 0.44%, and Chevron Corporation (NYSE:CVX), down 0.21%.

European indices, meanwhile, ended the day largely higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.40%, France's CAC 40 rose 0.33%, while Germany's DAX rose 0.48%. Meanwhile, in the U.K. the FTSE 100 fell 0.07%.


In U.S. trading on Friday, EUR/USD was down 0.18% at 1.3632.

The housing sector, which threw the U.S. economy into the worst downturn since the Great Depression and lagged on its recovery for years, is on the mend according to new data for April new home sales from the U.S. Census Bureau and for existing home sales from NAR (National Association of Realtors.

Meanwhile, the euro came under pressure after the Ifo Institute for Economic Research reported earlier that its German business climate index ticked down to a five-month low of 110.4 in May, from a reading of 111.2 the previous month. Analysts had expected the index to fall to 110.9.

The report came a day after data showed that manufacturing activity in the euro zone expanded at its slowest rate in six months in May, although the region's service sector expanded at the fastest rate in almost three years.

Also in Europe, Germany's first-quarter gross domestic product grew 0.8% from the previous quarter and 2.5% on year, the first figure in line with expectations though the on-year figure beat market calls for a 2.3% growth rate.

The dollar was up against the yen, with USD/JPY up 0.25% at 101.98 and up against the Swiss franc, with USD/CHF up 0.15% at 0.8954.

The greenback was up against the pound, with GBP/USD down 0.23% at 1.6831.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.21% at 1.0872, AUD/USD up 0.10% at 0.9236 and NZD/USD down 0.28% at 0.8542.

The CFTC (Commodity Futures Trading Commission) COT (Commitment of Traders) report for the week revealed bearish sentiment for the euro with the most bullish sentiment for the British pound, the Mexican peso and the Japanese yen.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% at 80.42.


Gold prices fell in U.S. trading on Friday after upbeat data on new home sales fueled demand for the dollar, which tends to trade inversely with the yellow metal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at 1,291.60 a troy ounce during U.S. trading, down 0.26%, up from a session low of $1,287.10 and off a high of $1,295.70.

The June contract settled up 0.54% at $1,295.00 on Thursday.

Futures were likely to find support at $1,282.90 a troy ounce, Wednesday's low, and resistance at $1,304.10, Thursday's high.

Meanwhile, silver for July delivery was down 0.60% at $19.403 a troy ounce, while copper futures for July delivery were up 0.65% at $3.162 a pound.


Better-than-expected data on U.S. home sales sent oil prices rising on Friday, a day after a solid report on existing home sales painted a picture of a U.S. economy that continues to recover and will demand more fuel and energy going forward.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in July traded at $104.40 a barrel during U.S. trading, up 0.64%. New York-traded oil futures hit a session low of $103.64 a barrel and a high of $104.50 a barrel.

The July contract settled down 0.32% at $103.74 a barrel on Thursday.

Nymex oil futures were likely to find support at $100.82 a barrel, Thursday's low, and resistance at $104.99 a barrel, the high from April16.

Natural Gas

Bargain hunters snapped up nicely-priced natural gas futures on Friday after Thursday's weekly supply report sent prices down to levels ripe for bottom fishing.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.390 per million British thermal units during U.S. trading, up 0.70%. The commodity hit session high of $4.404 and a low of $4.360.

The June contract settled down 2.55% on Thursday to end at $4.359 per million British thermal units.

Natural gas futures were likely to find support at $4.349 per million British thermal units, Thursday's low, and resistance at $4.575 Wednesday's high.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ending May 16 rose by 106 billion cubic feet, above forecasts for an increase of 102 billion cubic feet.

The five-year average change for the week is a build of 90 billion cubic feet, and prices dropped on teh news before rebounding after markets viewed the commodity as oversold.

Total U.S. natural gas storage stood at 1.266 trillion cubic feet. Stocks were 774 billion cubic feet less than last year at this time and 943 billion cubic feet below the five-year average of 2.209 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 449 billion cubic feet below the five-year average, following net injections of 65 billion cubic feet.

Stocks in the Producing Region were 379 billion cubic feet below the five-year average of 892 billion cubic feet after a net injection of 29 billion cubic feet.

Producers would need to add 2.6 trillion to 2.9 trillion cubic feet to storage by November 1 to meet typical winter demand, analysts said.

Meanwhile, updated weather forecasting models called for mild springtime temperatures over much of the country in the coming week, which was seen lowering demand for heating. reported that high pressure will allow for pleasant weather over much of the U.S. even though several weather systems will track across the country, though they won't be exceptionally cold.

High pressure will lead to warmer conditions over many regions and will drive modest cooling demand, especially over the southern U.S., added.

Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.


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