Investing.com Weekly Wrap-Up 06 June 2014

June 7th, 2014
in contributors, syndication

U.S. stocks rise on solid U.S. May jobs report; Dow up 0.52%

by Investing.com Staff, Investing.com

investing.com-logo U.S. stocks rose on Friday after data revealed the U.S. economy added more than 200,000 new nonfarm payrolls in May for a fourth consecutive month.

At the close of U.S. trading, the Dow 30 rose 0.52%, the S&P 500 index rose 0.46%, while the NASDAQ Compositeindex rose 0.59%.

Follow up:

The Volatility S&P 500 index, which measures market volatility, was down 7.76% at 10.75.

The U.S. Labor Department reported earlier that the economy added 217,000 in May, close to market expectations for a 218,000 increase, after a 282,000 rise in April, whose figure was revised down from a previously estimated 288,000 gain.

The private sector added 216,000 jobs last month, exceeding expectations for a 210,000 gain, which drew market applause.

The report also showed that the U.S. unemployment rate remained unchanged at 6.3% last month compared to expectations for a rise to 6.4%.

U.S. stocks continued to applaud the European Central Bank's decision to cut its benchmark interest rate on Thursday to a record-low 0.15% from 0.25%, cut its deposit rate to -0.1% and said it will support the banking sector to spur lending via targeted long-term credit injections.

Many U.S. companies are significantly exposed to European markets.

Leading Dow Jones Industrial Average performers included American Express Company (NYSE:AXP), up 2.27%, Goldman Sachs Group Inc (NYSE:GS), up 2.24%, and Intel Corporation (NASDAQ:INTC), up 1.86%.

The Dow Jones Industrial Average's worst performers included Pfizer Inc (NYSE:PFE), down 1.16%, The Travelers Companies Inc (NYSE:TRV), down 0.64%, and McDonald's Corporation (NYSE:MCD), down 0.51%.

European indices, meanwhile, ended the day higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.76%, France's CAC 40 rose 0.71%, while Germany's DAX rose 0.40%. Meanwhile, in the U.K. the FTSE 100 rose 0.66%.

Forex

The dollar traded higher against most major currencies on Friday after a solid May jobs report kept market expectations firm that the Federal Reserve will continue to wind down its $45 billion bond-buying program, the latest in a series of stimulus programs rolled out since the 2008 financial crisis to spur U.S. recovery.

In U.S. trading on Friday, EUR/USD was down 0.12% at 1.3645.

The employment data, viewed by markets as not exceptionally robust, was still strong enough to keep expectations firm for the Federal Reserve to continue winding down its monthly bond-buying program, which weakens the dollar by suppressing long-term interest rates.

The Federal Reserve's current bond-buying program, the third since the 2008 financial crisis, has swelled the U.S. central bank's balance sheet to more than $4 trillion today from $2.9 trillion in late 2012.

The euro, meanwhile, continued to come under pressure after the European Central Bank cut its benchmark interest rate on Thursday to a record-low 0.15% from 0.25%, cut its deposit rate to -0.1% and said it will support the banking sector to spur lending via targeted long-term credit injections.

Elsewhere on Friday, official data revealed that Germany's trade surplus widened to €17.7 billion in April from €15.0 billion in March, whose figure was revised up from a previously estimated surplus of €14.8 billion. Analysts had expected the trade surplus to widen to €15.2 billion in April.

The dollar was up against the yen, with USD/JPY up 0.11% trading at 102.52 and up against the Swiss franc, with USD/CHF up 0.23% at 0.8934.

The greenback was up against the pound, with GBP/USD down 0.07% at 1.6808.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.07% at 1.0931, AUD/USD down 0.06% at 0.9334 and NZD/USD down 0.06% at 0.8495.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 80.45.

Commitments of Traders data from the CFTC (Commodity Future Trading Commission) showed bearishness continued to grow for another week for the yen and the euro.

cot-forex-2014-jun-07

Gold

Gold futures fell on Friday after data revealed the U.S. economy saw an uptick in new job creation in May, though a European Central Bank decision to loosen policy on Thursday cushioned the yellow metal's losses.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,252.20 a troy ounce during U.S. trading, down 0.09%, up from a session low of $1,246.10 and off a high of $1,257.60.

The August contract settled up 0.72% at $1,253.30 on Thursday.

Futures were likely to find support at $1,241.20 a troy ounce, Thursday's low, and resistance at $1,257.90, Thursday's high.

Gold, the beneficiary of past and present round of Fed easing, dipped on the news as the dollar firmed.

The euro, meanwhile, continued to come under pressure after the European Central Bank cut its benchmark interest rate on Thursday to a record-low 0.15% from 0.25%, cut its deposit rate to -0.1% and said it will support the banking sector to spur lending via targeted long-term credit injections.

The ECB move to loosen policy sent enough investors to gold as a hedge to a weaker euro to support the precious metal against the dollar.

Meanwhile, silver for July delivery was down 0.45% at $18.998 a troy ounce, while copper futures for July delivery were down 1.09% at $3.057 a pound.

Oil

Crude futures rose on Friday after data revealed the U.S. economy continued to add jobs in May, in the private sector particularly, which sparked demand for oil due to sentiments that the world's largest economy 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 $102.68 a barrel during U.S. trading, up 0.20%. New York-traded oil futures hit a session low of $102.31 a barrel and a high of $103.07 a barrel.

The July contract settled down 0.16% at $102.48 a barrel on Thursday.

Nymex oil futures were likely to find support at $101.60 a barrel, Thursday's low, and resistance at $103.69 a barrel, Wednesday's high.

While not earth-shattering, the jobs report pointed to an economy that remains on the mend and is headed for better days, which gave oil prices a boost.

Elsewhere, a European Central Bank decision to loosen policy lifted oil prices by spurring hopes the European economy will demand more energy and fuel once recovery picks up.

The European Central Bank on Thursday cut its benchmark interest rate to a record-low 0.15% from 0.25%, cut its deposit rate to -0.1% and said it will support the banking sector to spur lending via targeted long-term credit injections.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery were down 0.13% and trading at US$108.65 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$5.97 a barrel.

Natural Gas

Natural gas futures rose on Friday after updated weather forecasting models called or warm, summertime temperatures to settle in across much of the U.S. in the coming days, though Thursday's bearish supply report continued to weigh on the commodity.

On the New York Mercantile Exchange, natural gas futures for delivery in July traded at $4.709 per million British thermal units during U.S. trading, up 0.16%. The commodity hit a session high of $4.726 and a low of $4.680.

The July contract settled up 1.31% on Thursday to end at $4.701 per million British thermal units.

Natural gas futures were likely to find support at $4.576 per million British thermal units, Wednesday's low, and resistance at $4.827, the high from May 7.

Updated weather-forecasting models called for above-normal temperatures to settle in across parts of the U.S. in the coming week, which should hike demand for air conditioning, though pockets of milder temperatures forecast for the northeast capped gains as did Thursday's bearish supply report.

The U.S. Energy Information Administration said in its weekly report Thursday that natural gas storage in the U.S. in the week ended May 30 rose by 119 billion cubic feet, above forecasts for an increase of 116 billion cubic feet.

Total U.S. natural gas storage stood at 1.499 trillion cubic feet. Stocks were 737 billion cubic feet less than last year at this time and 896 billion cubic feet below the five-year average of 2.395 trillion cubic feet for this time of year.

Producers would need to add approximately 2.5 trillion cubic feet to storage by November 1 to meet typical winter demand, analysts said.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July were down 0.05% at $102.43 a barrel, while heating oil for July delivery was down 0.37% at $2.8690 per gallon.

 









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