Weekly Wrap-Up 10 April 2015

April 10th, 2015
in contributors, syndication, forex

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.55%

by Staff,

U.S. stocks were higher after the close on Friday, as gains in theIndustrials, Healthcare and Utilities sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average rose 0.55%, while theS&P 500 index climbed 0.52%, and the NASDAQ Composite index climbed 0.43%.

Follow up:

The best performers of the session on the Dow Jones Industrial Average were General Electric Company (NYSE:GE), which rose 10.80% or 2.78 points to trade at 28.51 at the close. Meanwhile, Caterpillar Inc (NYSE:CAT) added 2.38% or 1.92 points to end at 82.60 and Intel Corporation (NASDAQ:INTC) was up 2.21% or 0.69 points to 31.93 in late trade.

The worst performers of the session were Nike Inc (NYSE:NKE), which fell 0.74% or 0.75 points to trade at 99.97 at the close. Coca-Cola Company (NYSE:KO) declined 0.41% or 0.17 points to end at 40.88 and Merck & Company Inc (NYSE:MRK) was down 0.31% or 0.18 points to 57.25.

The top performers on the S&P 500 were General Electric Company (NYSE:GE) which rose 10.80% to 28.51, Symantec Corporation (NASDAQ:SYMC) which was up 5.59% to settle at 25.58 and Chipotle Mexican Grill Inc (NYSE:CMG) which gained 4.80% to close at 683.02.

The worst performers were Fidelity National Information Svcs (NYSE:FIS) which was down 3.79% to 65.50 in late trade, Gap Inc (NYSE:GPS) which lost 3.72% to settle at 41.14 and Principal Financial Group Inc (NYSE:PFG) which was down 3.23% to 50.28 at the close.

The top performers on the NASDAQ Composite were KBS Fashion Group Ltd (NASDAQ:KBSF) which rose 30.44% to 6.00, Tantech Holdings Ltd (NASDAQ:TANH) which was up 27.31% to settle at 13.94 and InfoSonics Corp (NASDAQ:IFON) which gained 18.97% to close at 2.760.

The worst performers were Extreme Networks Inc (NASDAQ:EXTR) which was down 22.99% to 2.50 in late trade, Ceres Inc (NASDAQ:CERE) which lost 16.33% to settle at 2.100 and Image Sensing Systems Inc (NASDAQ:ISNS) which was down 13.97% to 2.71 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 1707 to 1101; on the Nasdaq Stock Exchange, 1624 rose and 1152 declined, while 5 ended unchanged.

Shares in General Electric Company (NYSE:GE) rose to 5-year highs; rising 10.80% or 2.78 to 28.51. Shares in General Electric Company (NYSE:GE) rose to 5-year highs; gaining 10.80% or 2.78 to 28.51. Shares in Extreme Networks Inc (NASDAQ:EXTR) fell to 3-years lows; down 22.99% or 0.74 to 2.50. Shares in Tantech Holdings Ltd (NASDAQ:TANH) rose to all time highs; up 27.31% or 2.99 to 13.94.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 4.35% to 12.52 a new 3-months .


The U.S. dollar resumed its steady ascent against the euro on Friday, amid optimistic economic data as the pair continued its move back toward parity.

EUR/USD dove 0.0059 or 0.55% to slip under 1.06 at 1.059 - its lowest level since Mar. 18. On that date, the pair gained more than 2% after relatively dovish comments from Federal Reserve chair Janet Yellen on slow GDP and wage growth fueled speculation that a looming interest-rate hike could be delayed.

EUR/USD plunged to a daily-low of 1.0568 in European afternoon trading before paring some of its losses during the U.S. morning trading session.

The pair likely gained support at 1.05, the low on Mar. 13 and resistance at $1.12, the high from Mar. 2. Earlier this week, the euro moved above 1.10 against the dollar for the first time since Mar. 25 following a disappointing U.S. monthly jobs report for the month of March.

It has declined sharply since then and finished the week down more than 3.4% down against its U.S. counterpart. For the year as a whole, the pair is down roughly 12% as the start of a €60 million a month quantitative easing program coincided with expectations that the Fed appeared ready to raise rates.

Although Yellen's comments last month may have slowed the dollar's appreciation, many analysts believe that parity is inevitable. Last month, analysts from Goldman Sachs (NYSE:GS) said they expect the euro to reach $0.95 against the dollar by March, 2016 and to continue downward to $0.80 by the end of 2017.

The U.S. Bureau of Labor Statistics (BLS) said on Friday that U.S. import prices fell 0.3% in March, marking the eighth consecutive monthly decline. More critically, prices for domestic imports fell 10.5% on a year-over-year basis from March, 2014, representing the steepest decline since 2009.

A stronger dollar is considered to be a key factor in pulling down import prices. TheU.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, ticked upward 0.43% on Friday to 99.68. The index is approximately 20% higher since last year at this time.

Next week, investors will await the release of the BLS' Consumer Price Index for the month of February on Friday. In January, the CPI-U for All Urban Consumers fell by 0.7% on a seasonally-adjusted basis and 0.1% over the last year, marking the first 12-month negative change since October, 2009. The CPI is the most widely used monthly indicator of inflation. Other key reports on U.S manufacturing and industrial production will be released early next week.

Also, the European Central Bank is expected to make key rate and monetary policy decisions at a Governing Council meeting on Wednesday. ECB president Mario Draghi is expected to make his first public comments on the euro zone's bond buying program at a press conference following the meeting.

Yields on U.S. 10-Year Treasuries fell slightly by 0.009 to 1.949, while yields onGerman 10-Year bunds ticked down 0.01 to 0.16.

CTFC Commitment of Traders

Speculators were more bearish on gold and less bearish on the euro this week. Bearishness decreased a little on the Mexican peso and bearishness increased somewhat for the S&P 500 but sentiment was little changed for all other trades listed below.



Gold futures soared more than $10 an ounce on Friday to cap a volatile week of trading, as metal investors looked ahead to the release of a host of key U.S. economic indicators next week.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 0.93% or 11.10 an ounce to $1,204.60 in U.S. afternoon trading. Gold traded at a daily-low of 1,192.90 in European morning trading, before surging to a high of 1,209.10 in the U.S. morning trading session. Gold futures fell back slightly in the afternoon before the close.

At the start of the week gold futures rallied, soaring more than $20 an ounce on Monday to $1,235.50, following a disappointing U.S. jobs report last week. After reaching a seven-week high early this week, gold prices had been on a downward trend while encountering a three-day slump.

But as the dollar strengthened at the end of the week, dollar-denominated commodities such as gold become more expensive for foreign purchasers.

The monthly report also serves as an indicator of inflationary trends in internationally traded products. Prices for imports appear to be devoid of inflationary pressures, which could possibly enhance dovish sentiments among policymakers at the Federal Reserve. As the Fed considers the timing of a potential interest rate hike, Fed chair Janet Yellen has indicated that inflation must move toward its target of 2% before it begins to raise rates.

Next week, investors will await the release of the BLS' Consumer Price Index for the month of February on Friday. In January, the CPI-U for All Urban Consumers fell by 0.7% on a seasonally-adjusted basis and 0.1% over the last year, marking the first 12-month negative change since October, 2009. The CPI is the most widely used monthly indicator of inflation. Other key reports on U.S manufacturing and industrial production will be released early next week.

The considerable spike in gold prices on Friday could be viewed as an indication that investors are betting on a delayed interest-rate hike. Gold struggles to compete with high yield bearing assets in periods of rising interest rates.

Elsewhere, silver futures for May delivery increased 0.199 or 1.31% to 16.38 an ounce.

Copper for May delivery rose 0.04 or 0.2% to 2.735 a pound.


Crude oil futures rose modestly on Friday, amid the sharpest rig reduction in the U.S. over the last four weeks.

After two consecutive weeks of minimal declines, oil services firm Baker Hughes(NYSE:BHI) said in its weekly report that the number of oil rigs nationwide declined by 42 to 760 rigs last week, its lowest weekly total since December, 2010. Oil and gas rigs dropped by a combined total of 40 on the week to 988, it lowest combined total since August, 2009.

Since last fall, oil rigs have been closing at an alarming rate. Rig use in the U.S. is down by more than 50% since exceeding a level of 1,600 last October. Rig counts have now declined for 18 straight weeks, marking the fastest decline in the U.S. in more than 25 years.

WTI crude for May delivery moved up roughly 30 cents to $51.85 following the report, building on minor gains earlier in the session. At the close, WTI crude dropped slightly to $51.70, up 0.91 or 1.79%. Crude futures fell to a daily-low of $50.11 in European afternoon trading, before steadily increasing in U.S. morning trading.

Energy traders are keeping a close eye on supply levels, after the U.S. Energy Information Administration reported that that U.S. crude oil storage increased by 10.95 million barrels for the week that ended April 3. The increase represented the largest weekly buildup for WTI crude nationwide since 2001. In addition, the massive buildup pushed U.S. crude stockpiles to 482.4 million barrels, the highest level in more than 80 years.

While rig counts in the U.S. have been declining exponentially, oil is still being pumped at one of its fastest rates in 30 years.

On the Intercontinental Exchange (ICE), brent crude for May delivery gained 1.34 or 2.37% to close at $57.91 a barrel. The spread between international and U.S. domestic benchmarks stood at $6.21, up from $5.74 on Thursday.

High geopolitical risk throughout the Persian Gulf has weighed on crude over the last two weeks. On April 2, crude prices plunged after Iran reached the framework of a deal with Western powers regarding its nuclear program. The preliminary accord resulted in the easing of economic and financial sanctions levied by the U.S. and the European Union that have limited Iranian exports to approximately a million barrels of crude oil per day since 2012.

On Thursday, Ayatollah Ali Khamenei, Iran's supreme leader, took a hard line against sanctions, asserting in an address in Theran that the restrictions "should be lifted all together on the same day of the agreement, not six months or one year later." The White House and its Western partners have been in favor of gradual easing of sanctions.

The release of a surfeit of Iranian oil into a global market that is already beset by a glut of supply has exacerbated concerns of a further decline in prices. Crude futures are down by more than 50% since last July.

Elsewhere, a large supply of Nigerian oil is expected to head to Europe following weak demand for West African light sweet crude in Asia over the last several months, Platts reported. Nigeria is the largest oil producer in Africa, according to the EIA.

Natural Gas (Wednesday Report)

U.S. natural gas prices declined on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories amid expectations for build in supplies.

On the New York Mercantile Exchange, natural gas for delivery in May slumped 3.6 cents, or 1.36%, to trade at $2.644 per million British thermal units during U.S. morning hours.

A day earlier, natural gas prices rose 3.0 cents, or 1.13%, to settle at $2.680. Futures were likely to find support at $2.583, the low from April 1, and resistance at $2.719, the high from April 2.

The U.S. Energy Information Administration's next storage report slated for release on Thursday is expected to show a build of approximately 5 billion cubic feet for the week ending April 3.

Supplies fell by 8 billion cubic feet in the same week last year, while the five-year average change is a decline of 2 billion cubic feet.

Total U.S. natural gas storage stood at 1.461 trillion cubic feet as of last week, 75.4% above year-ago levels and 11.5% below the five-year average for this time of year.

Last spring, supplies were 55% below the five-year average, indicating producers have made up for most of last winter's unusually strong demand.

Meanwhile, updated weather forecasting models for the lower 48 U.S. states showed that temperatures will remain near-normal over the next two weeks.

Market experts warned that futures are likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed and below-normal temperatures in April mean less than they do in January and February.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

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