Investing.com Weekly Wrap-Up 13 June 2014

June 13th, 2014
in contributors, syndication, forex

U.S. stocks gain as U.S. rules out troops in Iraq; Dow rises 0.25%

by Investing.com Staff, Investing.com

investing.com-logo U.S. stocks rose on Friday after President Barack Obama ruled out sending troops into Iraq to help quell a rebellion there, though concerns that insurgents will arrive at the outskirts of Baghdad later in a matter of days capped gains.

At the close of U.S. trading, the Dow 30 rose 0.25%, the S&P 500 index rose 0.31%, while the NASDAQ Compositeindex rose 0.30%.

Follow up:

The Volatility S&P 500 index, which measures the outlook for market volatility, was down 3.03% at 12.18.

Wall Street continued to track a rebellion in Iraq led by a Sunni Islamist group that threatened to take Baghdad after capturing key cities elsewhere in the country.

Investors breathed a sigh of relief, however, after U.S. President Barack Obama said he won't sent troops to Iraq and added oil continues to flow normally out of the country, which boosted stock prices, though concerns insurgents may reach the outskirts of Baghdad before the U.S. can provide logistical support watered down gains as did soft data.

In a preliminary report, the Thomson Reuters/University of Michigan consumer sentiment index fell to 81.2 this month from 81.9 in May, whose figure was revised up from a previously estimated reading of 81.8. Analysts had expected the index to rise to 83.0 in June.

Also on Friday, official data showed that U.S. producer price inflation fell 0.2% in May, confounding expectations for a 0.1% rise, after a 0.6% increase the previous month.

Core producer price inflation, which excludes food, energy and trade, slipped 0.1% last month, compared to expectations for an increase of 0.1%, after a 0.5% rise in April.

In other news, Priceline Group said it would acquire the online restaurant reservation service OpenTable Inc (NASDAQ:OPEN) for $2.6 billion.

Tech shares rallied after chipmaker Intel Corporation (NASDAQ:INTC) hiked its second-quarter revenue outlook.

Leading Dow Jones Industrial Average performers included Intel Corporation (NASDAQ:INTC), up 6.81%, Microsoft Corporation (NASDAQ:MSFT), up 1.59%, and Exxon Mobil Corporation (NYSE:XOM), up 0.93%.

The Dow Jones Industrial Average's worst performers included Wal-Mart Stores Inc (NYSE:WMT), down 0.60%, Home Depot Inc (NYSE:HD), down 0.52%, and UnitedHealth Group Incorporated (NYSE:UNH), down 0.35%.

European indices, meanwhile, ended the day largely lower.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.01%, France's CAC 40 fell 0.24%, while Germany's DAX fell 0.26%. Meanwhile, in the U.K. the FTSE 100 fell 0.95%.

Forex

The dollar traded largely higher against most major currencies on Friday amid relief buying after President Barack Obama ruled out sending U.S. troops to quell a rebellion in Iraq.

In U.S. trading on Friday, EUR/USD was down 0.13% at 1.3534.

Markets across the globe continued to track a rebellion in Iraq led by a Sunni Islamist group that threatened to take Baghdad after capturing key cities elsewhere in the country.

Investors breathed a sigh of relief, however, after U.S. President Barack Obama said he won't sent troops to Iraq and added oil continues to flow normally out of the country, which boosted the dollar by fueling hopes U.S. support will help the Iraqi government halt the rebellion.

Elsewhere, soft U.S. economic indicators kept the dollar's advance in check.

The dollar was up against the yen, with USD/JPY up 0.32% trading at 102.04 and up against the Swiss franc, with USD/CHF up 0.22% at 0.9004.

At its monthly policy-setting meeting, the Bank of Japan said it will continue to expand the monetary base at a pace of ¥60 trillion to ¥70 trillion per year, which weakened the yen and boosted demand for the dollar.

BoJ Governor Haruhiko Kuroda had said last week that the central bank's easing measures are having the intended effects and are helping the economy.

The greenback was down against the pound, with GBP/USD up 0.23% at 1.6968.

Markets have long been suspecting the Bank of England to raise interest rates before other major central banks, and BoE Governor Carney confirmed those sentiments in a speech he delivered on Thursday.

"There's already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced," Carney said in prepared remarks of his speech.

"It could happen sooner than markets currently expect."

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.03% at 1.0857, AUD/USD down 0.29% at 0.9399 and NZD/USD down 0.25% at 0.8666.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.08% at 80.65.

Commitments of Traders data from the CFTC (Commodity Future Trading Commission) showed bearishness continued to grow for another week for the euro but eased for the yen. Bullishness grew this week for the Australian dollar and the Mexican peso.

cot-forex-2014-jun-13

Gold

Gold futures remained in positive territory due to safe-haven demand from investors worried over chaos erupting in Iraq remained in a tight trading range after President Barack Obama said the U.S. won't send in troops to quell the insurgency.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,275.90 a troy ounce during U.S. trading, up 0.15%, up from a session low of $1,271.00 and off a high of $1,277.50.

The August contract settled up 1.01% at $1,274.00 on Thursday.

Futures were likely to find support at $1,250.10 a troy ounce, Tuesday's low, and resistance at $1,294.70, the high from May 27.

Investors worldwide continued to track a rebellion in Iraq led by a Sunni Islamist group that threatened to take Baghdad after capturing key cities elsewhere in the country.

Markets breathed a sigh of relief, however, after U.S. President Barack Obama said he won't sent troops to Iraq and added oil continues to flow normally out of the country, which capped gold's advance by boosting hopes U.S. support will help the Iraqi government halt the rebellion.

Elsewhere, soft U.S. economic indicators kept gold prices in positive territory. Meanwhile, silver for July delivery was up 0.69% at $19.668 a troy ounce, while copper futures for July delivery were up 0.49% at $3.030 a pound.

Oil

Crude futures advanced on Friday amid fears that Iraq is on the brink of a civil that could disrupt oil shipments, though reassurances from President Barack Obama that the U.S. won't send troops into the troubled country moved prices off earlier highs.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in July traded at $106.91 a barrel during U.S. trading, up 0.36%. New York-traded oil futures hit a session low of $106.39 a barrel and a high of $107.67 a barrel.

The July contract settled up 2.04% at $106.53 a barrel on Thursday.

Nymex oil futures were likely to find support at $102.62 a barrel, Monday's low, and resistance at $108.99 a barrel, the high from Sept. 19, 2013.

The U.S. is the world's largest consumer of crude oil.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for August delivery were up 0.30% and trading at US$112.76 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$5.85 a barrel.

Natural Gas

Natural gas futures edged lower on Friday after investors locked in gains from Thursday's bullish supply report and sold the commodity for profits.

On the New York Mercantile Exchange, natural gas futures for delivery in July traded at $4.756 per million British thermal units during U.S. trading, down 0.14%. The commodity hit a session high of $4.791 and a low of $4.717.

The July contract settled up 5.63% on Thursday to end at $4.762 per million British thermal units.

Natural gas futures were likely to find support at $4.504 per million British thermal units, Wednesday's low, and resistance at $4.827, the high from May 7.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 6 rose by 107 billion cubic feet, below forecasts for an increase of 110 billion cubic feet.

Total U.S. natural gas storage stood at 1.606 trillion cubic feet. Stocks were 727 billion cubic feet less than last year at this time and 877 billion cubic feet below the five-year average of 2.483 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 have said.

Thursday's report sparked a rally and sent natural gas prices ripe for profit taking, though weather forecasts prevented prices from falling too far.

Natgasweather.com reported earlier warm weather will settle over the eastern U.S. next week, with highs approaching the 90s all the way up to the northeastern coast.

The southern U.S. will see hot and humid temperatures, which should prompt households to crank up their air conditioning and send thermal power producers burning more natural gas to meet demand.

 









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