Investing.com Weekly Wrap-Up 07 November 2014

November 8th, 2014
in contributors, syndication, forex

U.S. stocks rise on Fed implications from soft jobs data; Dow up 0.11%

by Investing.com Staff, Investing.com

U.S. stocks rose on Friday after a soft October jobs report left many concluding the Federal Reserve might hold off on raising interest rates until later in 2015 than onceinvesting.com-logoanticipated, leaving borrowing costs low while the economy continues to grow.

At the close of U.S. trading, the Dow 30 rose 0.11%, the S&P 500index rose 0.03%, while the NASDAQ Composite index fell 0.13%.

The CBOE Volatility Index index, which measures the outlook for market volatility, was down 3.80% at 13.15.

Follow up:

The Department of Labor reported earlier that the U.S. economy added 214,000 jobs in October, missing expectations for an increase of 231,000. The number of jobs added in September was revised to 256,000 from a previously estimated 248,000.

The report also revealed that the U.S. unemployment rate ticked down to 5.8% in October from 5.9% in September. Analysts had expected the unemployment rate to remain unchanged last month.

While not overwhelmingly disappointing, the less-than-stellar report did give investors room to rethink when the Federal Reserve will hike interest rates next year.

The Fed recently closed its monthly bond-buying program and is expected to raise interest rates some time in 2015, though the timing as to when next year benchmark borrowing costs may rise remains up in the air thanks to hit-or-miss U.S. data.

Leading Dow Jones Industrial Average performers included Wal-Mart Stores Inc (NYSE:WMT), up 1.33%, Verizon Communications Inc (NYSE:VZ), up 1.13%, and Visa Inc (NYSE:V), up 0.92%.

The Dow Jones Industrial Average's worst performers included UnitedHealth Group Incorporated (NYSE:UNH), down 2.71%, Walt Disney Company (NYSE:DIS), down 2.18%, and Nike Inc (NYSE:NKE), down 0.90%.

European indices, meanwhile, ended the day largely lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 1.20%, France's CAC 40 fell 0.89%, while Germany's DAX fell 0.91%. Meanwhile, in the U.K. the FTSE 100

Forex

A less-than-stellar October jobs report in the U.S. sent the dollar softening against most major currencies on Friday as investors sold the greenback for profits.

In U.S. trading on Friday, the dollar was up against the yen, with USD/JPY up 2.73% at 112.20.

Diverging monetary policies have sent the U.S. currency strengthening to four-year highs against its peers in recent sessions.

In U.S. trading on Friday, EUR/USD was up 0.52% at 1.2436.

The dollar has firmed in recent weeks as investors prepare for U.S. monetary policy to grow less accommodative while Europe and Japan move in the opposite direction.

The Fed recently closed its monthly bond-buying program and is expected to raise interest rates some time in 2015, though the timing as to when next year benchmark borrowing costs may rise remains up in the air thanks to hit-or-miss U.S. data.

The dollar was down against the yen, with USD/JPY down 0.60% at 114.54, and down against the Swiss franc, with USD/CHF down 0.65% at 0.9670.

The greenback was down against the pound, with GBP/USD up 0.23% at 1.5869.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.81% at 1.1332, AUD/USD up 0.96% at 0.8638 and NZD/USD up 0.77% at 0.7751.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.61% at 87.68.

Gold

Gold shot up on Friday after data revealed the U.S. picked up fewer jobs in October than anticipated, which brought in bargain hunters who snapped up nicely-priced positions in the metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were up 2.25% at $1,168.30, up from a session low of $1,131.40 and off a high of $1,171.30.

The December contract settled down 0.27% at $1,142.60 on Thursday.

Futures were likely to find support at $1,131.40 a troy ounce, the session low, and resistance at $1,175.00, Tuesday's high.

Gold has softened in recent months as investors prepare for U.S. monetary policy to grow less accommodative while Europe and Japan move in the opposite direction, which has chipped away at the precious metal's appeal as a hedge to low interest rates.

The Fed recently closed its monthly bond-buying program and is expected to raise interest rates some time in 2015, though the timing as to when next year benchmark borrowing costs may rise remains up in the air thanks to hit-or-miss U.S. data.

Meanwhile, silver for December delivery was up 1.65% at $15.668 a troy ounce, while copper futures for December delivery were up 0.67% at $3.038 a pound.

Oil

Crude futures shot up on Friday on forecasts for falling U.S. temperatures, a weaker dollar and concerns the Ukraine ceasefire could crumble.

A weaker greenback makes oil a more attractive commodity on dollar-denominated exchanges, especially in the eyes of investors holding other currencies.

In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded up 1.05% at $78.73 a barrel during U.S. trading, up from a session low of $77.47 a barrel and off a high of $79.40 a barrel.

The December contract settled down 0.98% at $77.91 a barrel on Thursday.

Support for the commodity was seen at $75.84 a barrel, Tuesday's low, and resistance at $80.98 a barrel, Monday's high.

Milder weather patterns across the central and eastern U.S. will soon give way to more winter-like weather in the coming days, which should drive demand for heating oil, a crude derivative.

Elsewhere, a lackluster October jobs report weakened the dollar and gave crude futures even more room to rise.

Geopolitical concerns pressured oil prices higher was well.

The Ukrainian military accused Russia of moving 32 tanks and trucks carrying troops across its border, which spooked investors on concerns a ceasefire between the two countries could end.

Fighting could potentially disrupt the flow of oil from energy-rich Russia.

Separately, on the ICE Futures Exchange in London, Brent oil futures for December delivery were up 0.63% at US$83.39 a barrel, while the spread between Brent and U.S. crude contracts stood at $4.66.

Natural Gas

Natural gas futures moved higher on Friday after updated weather-forecasting models continued to call for a blast of cold air to sweep across the U.S. later this month and drive demand for heating.

On the New York Mercantile Exchange, natural gas futures for delivery in December were up 1.45% at $4.468 per million British thermal units during U.S. trading. The commodity hit a session low of $4.285, and a high of $4.493.

The December contract settled up 5.01% on Thursday to end at $4.404 per million British thermal units.

Natural gas futures were likely to find support at $4.111 per million British thermal units, Thursday's low, and resistance at $4.493, the high from June 30.

Milder weather patterns will soon give way to more winter-like weather in the coming day, which should drive demand for heating. Natgasweather.com reported in its Friday midday update:

"The more intimidating Arctic blast is set to arrive over the northern Plains Monday morning with temperatures dropping well below freezing. A weather system over the southern Plains will then do a fine job of tapping into these much colder temperatures and dragging them into down into northern Texas.

"The Arctic blast will then gradually shift east as the low pressure system tracks toward the Ohio Valley and Northeast. The eastern U.S. will be relatively mild early next week waiting for the cold front to arrive, but once it does, it will remain through the following weekend with additional chilly weather systems lining up to follow."

Chilly weather forecasts eclipsed Thursday's lackluster data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Oct. 31 rose by 91 billion cubic feet, above expectations for an increase of 85 billion and compared to a gain of 87 billion in the previous week.

Inventories rose by 35 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 42 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 29 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 3.571 trillion cubic feet. Stocks were 238 billion cubic feet less than last year at this time and 261 billion cubic feet below the five-year average of 3.790 trillion cubic feet for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were up 1.21% at $78.85 a barrel, while heating oil for December delivery were up 1.71% at $2.5008 per gallon.

 









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