Investing.com Weekly Wrap-Up 06 February 2015

February 6th, 2015
in contributors, syndication, forex

U.S. stocks lower at close of trade

by Investing.com Staff, Investing.com

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Wall Street stocks fell on Friday as a better-than-expected U.S. jobs report raised expectations that the Federal Reserve will increase interest rates by midyear, while renewed worries over Greece's debt negotiations added to the bearish tone.

The S&P 500 index of utilities <.SPLRCU>, often used as a bond proxy by investors in a low-rate environment, fell 4.1 percent, its biggest daily drop since August 2011, as U.S. government debt yields jumped.

Follow up:

The Dow Jones industrial average (DJI) fell 60.59 points, or 0.34 percent, to 17,824.29, the S&P 500 (SPX) lost 7.05 points, or 0.34 percent, to 2,055.47,, and the Nasdaq Composite (IXIC) dropped 20.70 points, or 0.43 percent, to 4,744.40.

For the week, the S&P 500 was up 3 percent, its best weekly gain since December, while the Nasdaq was up 2.4 percent.

About 7.7 billion shares changed hands on U.S. exchanges, compared with the 7.9 billion average for the last five sessions, according to data from BATS Global Markets.

Among the day's gainers, Twitter (N:TWTR) jumped 16.4 percent to $48.01 after any earnings report on Thursday that beat Wall Street's profit and revenue targets in the fourth quarter.

Declining issues outnumbered advancing ones on the New York Stock Exchange by 1,961 to 1,128, for a 1.74-to-1 ratio on the downside. On the Nasdaq, 1,458 issues fell and 1,260 advanced for a 1.16-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 43 new 52-week highs and two new lows; the Nasdaq Composite recorded 99 new highs and 26 new lows.

Read the rest of this Reuters article at Investing.com.

Forex

The dollar rallied against the other major currencies on Friday, after data showed that the U.S. economy added more jobs than expected last month, fuelling optimism over the strength of the local job market.

The Labor Department said the U.S. economy added 257,000 jobs in January, beating expectations for an increase of 234,000. December's figure was revised to a 329,000 gain from a previously estimated 252,000 rise.

The report also showed that the U.S. unemployment rate ticked up to 5.7% last month, from 5.6% in December. Analysts had expected the unemployment rate to remain unchanged in January.

In addition, data showed that U.S. average hourly earnings rose 0.5% in January, exceeding expectations for a 0.3% gain, after a 0.2% fall the previous month.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 1.02% to 94.62.

EUR/USD tumbled 1.12% to 1.1349 as investors continued to focus on developments in Greece, after German Finance Minister Wolfgang Schauble said on Thursday that Greece's financial difficulties were the result of domestic problems, but that Germany would do all in its power to help.

Schauble was speaking at a joint press conference with his Greek counterpart Yanis Varoufakis in Berlin on Thursday.

The comments came after the European Central Bank said it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece's central bank to provide additional liquidity for its lenders and increasing pressure on Athens.

Earlier Friday, official data showed that German industrial production rose 0.1% in December, disappointing expectations for a 0.4% gain. November's figure was revised to a 0.1% uptick from a previously estimated 0.1% fall.

The pound was also lower against the dollar, with GBP/USD down 0.38% to 1.5268.

The Office For National Statistics said that the U.K. trade deficit widened to £10.15 billion in December from £9.28 billion in November, whose figure was revised from a previously estimated deficit of £8.85 billion. Analysts had expected the trade deficit to hit £9.10 billion in December.

Elsewhere, USD/CHF climbed 0.66% to trade at 0.9271, while USD/JPY jumped 1.25% to 119.00.

The Australian dollar remained moderately higher, with AUD/USD adding 0.28% to 0.7820, while NZD/USD slid 0.46% to 0.7374. The Aussie shrugged off a report by the Reserve Bank of Australia saying that it cut its 2015 growth forecasts to 2.75% from an initial 3%.

The Canadian dollar remained lower, with USD/CAD up 0.27% to 1.2467. Statistics Canada reported that 35,400 jobs were created last month, compared to expectations for a 5,000 gain. December's figure was revised to a 102,100 decline from a previously estimated 4,300 fall.

Canada's unemployment rate fell to 6.6% in January from 6.7% the previous month, the report showed, compared to expectations for the index to remain unchanged.

Data also showed that Canadian building permits 7.7% in December, more than the expected 5.0% increase. November's figure was revised to a 13.6% drop from a previously estimated 13.8% decline.

CTFC Commitment of Traders

Speculators became even more bearish on the euro this week. The only bullish items tracked her were gold, silver and the S&P 500.

cot-2015-feb-06

Gold

Gold prices rose on Friday, as market participants eyed a highly anticipated report on U.S. employment due later in the day and as Greece concerns continued to dominate sentiment.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were up 0.39% to $1,267.60.

The April contract ended Thursday's session 0.14% lower at $1,262.70 an ounce.

Futures were likely to find support at $1,255.80, the low from February 3 and resistance at $1,286.50, the high from February 3.

Gold futures slipped lower on Thursday after the release of mixed U.S. economic reports. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits increased by 11,000 to 278,000 last week from the previous week's revised total of 267,000.

Analysts had expected initial jobless claims to rise by 23,000 to 290,000 last week.

A separate report showed that the U.S. trade deficit widened to $46.56 billion in December from $39.75 billion in November, whose figure was revised from a previously estimated deficit of $39.00 billion. Analysts had expected the trade deficit to narrow to $38.00 billion in December.

Traders were looking ahead to the release of the latest U.S. nonfarm payrolls report later Friday, for further indications on the strength of the recovery in the labor market.

A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.

Meanwhile, traders continued to focus on developments in Greece, after German Finance Minister Wolfgang Schauble said on Thursday that Greece's financial difficulties were the result of domestic problems, but that Germany would do all in its power to help.

Schauble was speaking at a joint press conference with his Greek counterpart Yanis Varoufakis in Berlin on Thursday.

The comments came after the European Central Bank said it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece's central bank to provide additional liquidity for its lenders and increasing pressure on Athens.

Greece's government is seeking debt relief on its current €240 billion bailout, which has fuelled fears over a clash with its creditors that could bring about its eventual exit from the euro zone.

Elsewhere in metals trading, silver for March delivery edged up 0.09% to $17.212 a troy ounce, while copper futures for March delivery rose 0.29% to $2.602 a pound.

Oil

Crude oil futures rallied over 3% on Friday, as investors continued to seek cheap valuations aver the commodity plunged nearly 9% on Wednesday and as markets eyed upcoming U.S. employment data for further indications on the strength of the local job market.

On the New York Mercantile Exchange, U.S. crude oil for delivery in March traded $1.79 or 3.56% higher to $52.28 a barrel during European early afternoon trade.

Prices surged $2.03 or 4.19% on Thursday to settle at $50.48.

Futures were likely to find support at $47.36, Thursday's low and resistance at $54.24, the high from February 3.

Oil prices recovered after the U.S. Energy Information Administration said on Wednesday that U.S. crude oil inventories rose by 6.3 million barrels last week to 413.1 million, the most in records dating back to August 1982.

Capital expenditure cuts by major oil companies combined with a sharp reduction in U.S. rig counts helped support prices amid hopes it will alleviate a glut in global supplies.

In addition, concerns over weakening output from Libya and expectations for stronger U.S. jobs data later on Friday also lent support to prices.

Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

Meanwhile, investors continued to follow developments in Greece. On Thursday, German Finance Minister Wolfgang Schauble said Athens' financial difficulties were the result of domestic problems, but that Germany would do all in its power to help.

Schauble was speaking at a joint press conference with his Greek counterpart Yanis Varoufakis in Berlin on Thursday.

The comments came after the European Central Bank said it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece's central bank to provide additional liquidity for its lenders and increasing pressure on Athens.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery gained $1.89, or 3.34%, to hit $58.46 a barrel, with the spread between the Brent and the WTI crude contracts stranding at $6.18.

Natural Gas

Natural gas futures plunged to a 32-month low 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 March tumbled to a session low of $2.584 per million British thermal units, a level not seen since June 2012, before trading at $2.598 during U.S. morning hours, down 6.5 cents, or 2.42%. Prices were at $2.625 prior to the release of the supply data.

Futures were likely to find support at $2.575 per million British thermal units, the low from June 22, 2012, and resistance at $2.779, the high from February 4.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 30 fell by 115 billion cubic feet, compared to expectations for a decline of 121 billion. Natural gas storage in the U.S. fell by 94 billion cubic feet in the preceding week.

Inventories fell by a whopping 259 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 165 billion cubic feet.

Total U.S. natural gas storage stood at 2.428 trillion cubic feet. Stocks were 468 billion cubic feet higher than last year at this time and 29 billion cubic feet below the five-year average of 2.457 trillion cubic feet for this time of year.

A day earlier, natural gas lost 9.2 cents, or 3.34%, to settle at $2.662 after extended weather forecasting models showed that below-normal temperatures may give way to higher readings by the middle of February, dampening demand expectations for the heating fuel.

Bearish speculators are betting on the near-normal weather reducing winter demand for the heating fuel.

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

Nymex natural gas prices sank 16.7 cents, or 9.03%, last week, capping the ninth weekly decline in the past ten weeks. Prices of the heating fuel plunged 15.9 cents, or 7.08%, in January, as an unusually mild start to winter limited demand while production soared.









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