Weekly Wrap-Up 23 January 2015

January 23rd, 2015
in contributors, syndication, forex

U.S. stocks mixed at close of trade

by Staff, U.S. stocks were mixed after the close on Friday, as gains in the Utilities,Technology and Consumer Services sectors led shares higher while losses in the Basic Materials, Consumer Goods and Telecommunications sectors led shares lower.

At the close in New York, the Dow Jones Industrial Average fell 0.79%, while the S&P 500 index declined 0.55%, and the NASDAQ Composite index added 0.16%.

Follow up:

The best performers of the session on the Dow Jones Industrial Average were General Electric Company (NYSE:GE), which rose 0.82% or 0.20 points to trade at 24.48 at the close. Meanwhile, Nike Inc (NYSE:NKE) added 0.32% or 0.31 points to end at 96.16 and International Business Machines (NYSE:IBM) was up 0.31% or 0.48 points to 155.87 in late trade.

The worst performers of the session were Exxon Mobil Corporation (NYSE:XOM), which fell 2.13% or 1.98 points to trade at 90.89 at the close. Chevron Corporation (NYSE:CVX) declined 1.90% or 2.07 points to end at 106.85 and EI du Pont de Nemours and Company (NYSE:DD) was down 1.73% or 1.30 points to 73.79.

The top performers on the S&P 500 were E-TRADE Financial Corporation (NASDAQ:ETFC) which rose 8.43% to 24.56, Starbucks Corporation (NASDAQ:SBUX) which was up 6.62% to settle at 88.22 and Valero Energy Corporation (NYSE:VLO) which gained 4.50% to close at 50.16.

The worst performers were United Parcel Service Inc (NYSE:UPS) which was down 9.91% to 102.93 in late trade, KLA-Tencor Corporation (NASDAQ:KLAC) which lost 8.05% to settle at 65.24 and Avon Products Inc (NYSE:AVP) which was down 7.85% to 7.98 at the close.

The top performers on the NASDAQ Composite were Torchlight Energ (NASDAQ:TRCH) which rose 72.78% to 0.69, Array BioPharma Inc (NASDAQ:ARRY) which was up 40.79% to settle at 7.110 and Egalet Corportn (NASDAQ:EGLT) which gained 39.77% to close at 8.54.

The worst performers were Cache Inc (NASDAQ:CACH) which was down 48.67% to 0.05 in late trade, Uroplasty Inc (NASDAQ:UPI) which lost 16.57% to settle at 1.310 and ATRM Holdings Inc (NASDAQ:ATRM) which was down 15.07% to 3.380 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1807 to 991 and 1 ended unchanged; on the Nasdaq Stock Exchange, 1507 fell and 1253 advanced, while 7 ended unchanged.

Shares in Starbucks Corporation (NASDAQ:SBUX) rose to all time highs; rising 6.62% or 5.48 to 88.22. Shares in Cache Inc (NASDAQ:CACH) fell to all time lows; down 48.67% or 0.05 to 0.05. Shares in Array BioPharma Inc (NASDAQ:ARRY) rose to 3-year highs; gaining 40.79% or 2.060 to 7.110. Shares in Uroplasty Inc (NASDAQ:UPI) fell to 3-year lows; losing 16.57% or 0.260 to 1.310.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 1.16% to 16.59.


The dollar trimmed gains against the other major currencies on Friday, after downbeat U.S. housing and manufacturing reports, but the greenback still continued to trade at a 12-year peak as risk aversion continued to dominate.

In a report, the National Association of Realtors said that U.S. existing home sales rose by 2.4% in December to 5,040 million units from a revised total of 4,920 million units in November. Analysts had expected existing home sales to hit 5,060 million units last month.

Separately, research firm Markit said the U.S. flash manufacturing purchasing managers' index fell to 53.7 this month from 53.9 in December, disappointing expectations for a rise to 54.0.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.34% to 94.98, still close to the session's 12-year highs of 95.77.

EUR/USD eased off 11-year lows of 1.1118 to stabilize at 1.1268, down 0.83% for the day.

The euro remained under broad selling pressure after European Central Bank President Mario Draghi announced on Thursday that the bank will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.

Earlier Friday, data showed that the Markit preliminary composite PMI, which measures activity in the manufacturing and services sectors in the euro area, rose to 52.2 this month from 51.4 in December. Analysts had expected the index to rise to 51.8 in January.

In Germany, the preliminary manufacturing PMI ticked down to 51.0 this month from 51.2 in December, while the preliminary services PMI rose to 52.7 in January from 52.1 the previous month.

Markit also said that France's preliminary manufacturing PMI rose to 49.5 this month from 47.5 in December, while the services PMI fell to 49.5 in January from a reading of 50.6 in December.

The pound held steady against the dollar, with GBP/USD at 1.5017, just above an 18-month trough of 1.4951 hit earlier in the day.

Sterling showed little reaction to an earlier report by the Office for National Statistics showing that U.K. retail sales rose 0.4% in December, beating expectations for a 0.6% decline, after a 1.6% increase the previous month.

Year-on-year, retail sales increased by 4.3% last month, more than the expected 3.0% rise, after a 6.4% advance in November.

Elsewhere, USD/JPY declined 0.74% to 117.64, while USD/CHF climbed 0.71% to 0.8771.

The commodity-linked currencies were broadly weaker. AUD/USD plummeted 1.12% to fresh five-and-a-half year lows at 0.7933, while NZD/USD slid 0.39% to two-and-a-half year lows of 0.7473.

USD/CAD pulled away from a nearly six-year peak of 1.2456 and consolidated at 1.2409, up 0.23% for the day. The loonie found some support after Statistics Canada said that retail sales rose 0.4% in November, exceeding expectations for an uptick of 0.1%, after a flat reading the previous month.

Core retail sales, which exclude automobiles, increased by 0.7% in November, compared to expectations for a 0.5%. October's figure was revised to a 0.1% rise from a previously estimated 0.2% gain.

A separate report showed that Canada's consumer price inflation slipped 0.7% in December, confounding expectations for a 1.0% decline, after a 0.4% fall the previous month.

Core CPI, which excludes the eight most volatile items, fell 0.3% last month, in line with expectations, after a 0.2% downtick in November.

CTFC Commitment of Traders

The biggest sentiment swings this week were to less bullish on U.S. stocks and more bullish on gold. The euro remained at a bearish extreme.



Gold prices fell on Friday, pulling away from the previous session's five-month highs hit following news the European Central Bank is launching a large scale quantitative easing program.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.44% to $1,295.00.

The February contract ended Thursday's session 0.54% higher at $1,300.70 an ounce.

Gold futures strengthened after the ECB announced on Thursday that it would launch a €60 billion monthly bond buying program that would start in March and last until September 2016, in a bid to stave off the threat of deflation in the euro area and boost growth.

In total, the program could total €1.08 trillion, much higher than market expectations for a figure of around €500 billion.

Commenting on the decision, ECB President Mario Draghi acknowledged the action the ECB took last year was "insufficient" to ward off the threat of deflation in the region. The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.

Draghi also said the risks to the euro area recovery remain to the "downside" but added that today's action should bolster the outlook. He noted that lower oil prices should help households and support a wider recovery.

Elsewhere, data showed that the China HSBC Flash Manufacturing Purchasing Manager's Index came in at 49.8 in January, compared to December's final of 49.6, while the January flash output index ticked up to 50.1 from 49.9 in December, placing it just in expansion territory above 50.

China is the world's top physical consumer of gold.

Elsewhere in metals trading, silver for March delivery declined 0.60% to $18.245 a troy ounce, while copper futures for March delivery lost 1.14% to $2.550 a pound.


Crude oil futures rose on Friday, pulling away from nearly six-year lows as news of Saudia Arabia King Abdullah's death lent support to the commodity, although sustained concerns over a supply glut continued to weigh.

On the New York Mercantile Exchange, U.S. crude oil for delivery in March traded $0.12 or 0.25% higher to $44.43 a barrel during European early afternoon trade.

Prices plummeted $1.47 or 3.08% on Thursday to settle at $46.31.

Futures were likely to find support at $44.78, the low from January 13 and a nearly six-year low and resistance at $49.09, Thursday's high.

Oil prices rallied following reports of the death of Saudi Arabia's King Abdullah amid growing speculation over a possible shift in the kingdom's policy of allowing crude prices to fall.

The 90-year-old monarch, who was admitted to hospital in December with pneumonia, will be succeeded by his half-brother, Crown Prince Salman.

Gains were expected to remain limited however, as the U.S. Energy Information Administration said this week that U.S. crude oil inventories rose by 10.1 million barrels in the week ending January 16, compared to expectations for an increase of 2.7 million barrels.

Total U.S. crude oil inventories stood at 397.9 million barrels as of last week.

Also weighing on the commodity, the European Central Bank announced on Thursday that it is launching a €60 billion monthly bond buying program that would start in March and last until September 2016, in a bid to stave off the threat of deflation in the euro area and boost growth.

The QE announcement pressured the euro and sent the dollar higher, weighing on dollar-denominated commodities.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery jumped $0.71, or 1.47%, to hit $49.24 a barrel, with the spread between the Brent and the WTI crude contracts stranding at $4.81.

Natural Gas

Natural gas futures plunged 5% on Thursday, after data showed that U.S. natural gas supplies fell less than forecast last week, underlining concerns over weak demand.

On the New York Mercantile Exchange, natural gas for delivery in February tumbled 13.0 cents, or 4.35%, to trade at $2.844 per million British thermal units during U.S. morning hours. Prices were at $2.903 prior to the release of the supply data.

Futures were likely to find support at $2.795 per million British thermal units, the low from January 13, and resistance at $3.228, the high from January 16.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 16 fell by 216 billion cubic feet, below expectations for a decline of 227 billion and compared to a drop of 236 billion in the previous week.

Inventories fell by 133 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 176 billion cubic feet.

Total U.S. natural gas storage stood at 2.637 trillion cubic feet. Stocks were 199 billion cubic feet higher than last year at this time and 153 billion cubic feet below the five-year average of 2.790 trillion cubic feet for this time of year.

A day earlier, natural gas surged 14.3 cents, or 5.05%, to settle at $2.974 as investors reacted to daily changes in weather patterns.

Updated weather forecasting models for the lower 48 U.S. states continued to call for mostly seasonal temperatures from January 22 to January 29.

However, extended forecasts showed lower readings were expected for most of the nation from January 30 through February 3.

Bullish speculators are betting on the cooler weather to increase winter-heating demand for the fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Natural gas prices are down almost 37% since mid-November as an unusually mild start to winter limited demand while production soared.


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