Investing.com Weekly Wrap-Up 23 October 2015

October 23rd, 2015
in contributors, syndication, forex

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.90%

by Investing.com Staff, Investing.com

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

At the close in NYSE, the Dow Jones Industrial Average rose 0.90% to hit a new 1-month high, while the S&P 500 index added 1.10%, and the NASDAQ Composite index climbed 2.27%.

Follow up:

The best performers of the session on the Dow Jones Industrial Average were Microsoft Corporation (O:MSFT), which rose 10.41% or 5.00 points to trade at 53.03 at the close. Meanwhile, Apple Inc (O:AAPL) added 3.10% or 3.58 points to end at 119.08 and Procter & Gamble Company (N:PG) was up 2.91% or 2.18 points to 77.03 in late trade.

The worst performers of the session were Nike Inc (N:NKE), which fell 1.42% or 1.88 points to trade at 130.53 at the close. Coca-Cola Company (N:KO) declined 1.04% or 0.45 points to end at 42.79 and Wal-Mart Stores Inc (N:WMT) was down 1.02% or 0.60 points to 58.30.

The top performers on the S&P 500 were Mallinckrodt (N:MNK) which rose 12.18% to 65.75, Microsoft Corporation (O:MSFT) which was up 10.41% to settle at 53.03 and Endo International PLC (O:ENDP) which gained 9.99% to close at 56.60.

The worst performers were Stericycle Inc (O:SRCL) which was down 19.28% to 120.31 in late trade, VF Corporation (N:VFC) which lost 12.92% to settle at 63.75 and Whirlpool Corporation (N:WHR) which was down 8.70% to 145.90 at the close.

The top performers on the NASDAQ Composite were Reading International B Inc (O:RDIB) which rose 37.67% to 15.350, Horizon Pharma PLC (O:HZNP) which was up 30.03% to settle at 17.06 and NETGEAR Inc (O:NTGR) which gained 27.98% to close at 41.85.

The worst performers were Ocular Therapeutix Inc (O:OCUL) which was down 52.32% to 7.18 in late trade, Westmoreland Coal Company (O:WLB) which lost 30.36% to settle at 8.58 and Mid-Con Energy Partners LP (O:MCEP) which was down 26.42% to 2.20 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 1494 to 1040 and 1 ended unchanged; on the Nasdaq Stock Exchange, 1693 rose and 861 declined, while 51 ended unchanged.

Shares in Stericycle Inc (O:SRCL) fell to 52-week lows; down 19.28% or 28.73 to 120.31. Shares in Microsoft Corporation (O:MSFT) rose to 5-year highs; up 10.41% or 5.00 to 53.03. Shares in VF Corporation (N:VFC) fell to 52-week lows; falling 12.92% or 9.46 to 63.75. Shares in Microsoft Corporation (O:MSFT) rose to 5-year highs; gaining 10.41% or 5.00 to 53.03. Shares in Wal-Mart Stores Inc (N:WMT) fell to 3-years lows; falling 1.02% or 0.60 to 58.30. Shares in Ocular Therapeutix Inc (O:OCUL) fell to all time lows; falling 52.32% or 7.88 to 7.18. Shares in Westmoreland Coal Company (O:WLB) fell to 52-week lows; losing 30.36% or 3.74 to 8.58. Shares in NETGEAR Inc (O:NTGR) rose to 3-years highs; gaining 27.98% or 9.15 to 41.85.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 0.07% to 14.44 a new 1-month low.

Additional stock news from Reuters at Investing.com.

Forex

EUR/USD fell to a two-month low on Friday extending losses from a massive sell-off from the previous session, as currency traders continued to digest dovish comments from European Central Bank president Mario Draghi on the likelihood of further stimulus measures to boost economic growth in the euro zone.

The currency pair traded in a broad range between 1.0997 and 1.1140 before settling at 1.1012, down 0.0093 or 0.84% on the session. On Thursday, the euro tumbled more than 2% against the dollar, suffering its worst one day fall since January, after Draghi sent strong hints that the ECB will resume cutting interest rates, even as they remain in negative territory.

At one point in Friday's session, EUR/USD slipped below 1.10 for the first time since August 11. For the week, the euro fell against the dollar by approximately 3%. The euro has closed down against its American counterpart in four of the last five sessions and six of the last eight.

EUR/USD likely gained support at 1.0847, the low from Aug. 5 and was met with resistance at 1.1496, the high from Oct. 15.

Upon the completion of the ECB Governing Council's two-day meeting in Malta, Draghi hinted that the ECB is ready to slash interest rates from their current record-low of 0.5% and extend the scope of its comprehensive EUR 1.1 trillion asset-purchasing program. Citing weak growth among emerging market nations, Draghi also noted that the ECB could ramp bond purchases from its current level of EUR 60 billion a month.

"The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation," Draghi said. "In particular, the Governing Council recalls that the asset purchase program provides sufficient flexibility in terms of adjusting its size, composition and duration."

Large-scale bond buying programs are intended to push interest rates down, as the price of government bonds move higher. Quantitative easing programs are also intended to depress currency values, as it becomes more appealing for domestic investors to invest in the region due to the lower rates.

Although the ECB initially planned on running the asset-purchasing program through September, 2016, Draghi reiterated on Thursday it could last longer if long-term inflation throughout the euro zone struggles to approach its targeted goal of 2%.

Currency traders now turn their attention to next week's Federal Open Market Committee's October monetary policy for further clues on whether the U.S. central bank could raise short-term interest rates at some point in 2015. A rate hike is viewed as bullish for the dollar, as foreign investors pile into the greenback to capitalize on higher yields.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.7% to close at 97.18. In U.S. afternoon trading, the index surged to its highest level since mid-August.

CTFC Commitment of Traders

Speculators this week were were less bearish on the euro, Japanese yen and Canadian dollar. Bullishness increased for gold. Note: End of week positions are not included in this report and Friday saw some big moves.

cot.2015.oct.23

Gold

Gold futures fell mildly as the People's Bank of China unexpectedly introduced fresh stimulus measures on Friday, marking the sixth time the central bank has lowered interest rates since November.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,158.90 and $1,179.40 an ounce, before settling at $1,163.00, down 3.10 or 0.26% on the session. Gold closed lower for the third straight day and the sixth time in seven sessions. After closing above $1,180 an ounce last week, gold fell by roughly 1.25% over the last five trading days. More broadly, the precious metal is still up more than 5% from its level in late-July when it dipped below $1,090 an ounce to touch down to a six-year low.

Gold likely gained support at 1,138.70, the low from Oct. 8 and was met with resistance at $1,189.00, the high from Oct. 14.

On Friday, the PBOC slashed its one-year lending rate by a quarter of a percentage point, in its latest attempt to bolster its flagging economy by easing monetary policy.

The moves come several days after China's National Bureau of Statistics reported that Chinese GDP grew by 6.9% in the third quarter, marking the slowest three-month period of growth since the height of the Financial Crisis. The soft reading exacerbates concerns that the world's second-largest economy could end the year with its slowest pace of growth in more than a decade.

China is the world's largest producer of gold and the second-largest consumer of the precious metal behind India.

In addition, the PBOC also lowered its Reserve Requirement Ratio (RRR) or the amount of cash commercial banks must set aside in reserves, by 0.5%. In a statement released on Friday, the PBOC said the RRC cut was needed in order to "maintain reasonably ample liquidity in the banking system." Two months after the PBOC rattled global markets with a shocking devaluation of the yuan, capital outflows in China have increased substantially as concerned investors have moved funds offshore to safer areas. The PBOC also removed a ceiling on rates banks are required to pay depositors in an effort to keep Chinese customers from moving their investments abroad.

The Chinese central bank announced the measures one day after European Central Bank president Mario Draghi sent strong hints that the bank could lower interest rates and extend the scope of its asset-purchasing program when the ECB Governing Council meets next in December. As a result, the dollar surged against the euro in Thursday's session posting its strongest one-day move this year. The dollar continued its rally on Friday as investors digested Draghi's comments, placing downward pressure on gold.

Silver for December delivery gained 0.003 or 0.02% to close at 15.845 an ounce.

Copper for December delivery plunged 0.036 or 1.50% to 2.348 a pound.

Oil

Crude futures continued their extended slide on Friday falling to near monthly lows, amid a miniscule build in U.S. oil rigs last week.

On the New York Mercantile Exchange, WTI crude for December delivery traded between $44.22 and $45.75 a barrel, before settling at $44.58 , down 0.81 or 1.78% on the day. At one point, the front month contract for U.S. crude futures fell to its lowest level since September 24. Texas Long Sweet futures have now closed four times in the last five sessions and the eighth time in the last 11 trading days. For the week, WTI crude lost approximately 6.5%.

On the Intercontinental Exchange (ICE), brent crude for December delivery wavered between $47.45 and $48.65 a barrel, before closing at $47.91, down 0.11 or 0.23% on the session. North Brent Sea crude futures also fell to near-monthly lows during Friday's session. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $3.39, above Thursday's level of $2.82 at the close of trading.

On Friday afternoon, oil services firm Baker Hughes (N:BHI) said the U.S. oil rig count for the week ending on Oct. 16 fell by 1 to 594. It marked the eighth straight week of weekly declines, as U.S. production continues to hover near 2015 yearly lows. The count of oil and gas rigs combined remained unchanged at 787, its lowest level since April, 2002.

Energy traders have kept a close eye on the rig count since a shocking move by OPEC last November triggered a downturn in global oil prices. In an effort to defend market share, OPEC left its production ceiling above 30 million barrels a day flooding markets with a glut of oversupply. After falling below $40 a barrel in August, any supply build is viewed as bearish for crude.

Earlier this week, officials at an OPEC meeting in Vienna reportedly discussed the risks associated with a wide range of oil investments, but did not address any plans to cut production. Representatives from eight non-OPEC members, including Russia were present at the meeting. OPEC meets next on Dec. 4.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.7% to an intraday high of 97.19. At one point on Friday, the index reached its highest level since mid-August.

The surge in the dollar came as China cut its one-year lending rate and removed a ceiling on rates banks were forced to pay depositors on Friday. China is the world's second-largest consumer of crude oil behind the U.S.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Natural Gas (Thursday Report)

Natural gas futures pushed higher on Thursday to move away from the prior session's three-year low after data showed that U.S. natural gas supplies rose less than expected last week.

Natural gas for delivery in November on the New York Mercantile Exchange tacked on 2.9 cents, or 1.21%, to trade at $2.433 per million British thermal units during U.S. morning hours. Prices were at around $2.412 prior to the release of the supply data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended October 16 rose by 81 billion cubic feet, below expectations for an increase of 88 billion.

That compared with builds of 100 billion cubic feet in the prior week, 94 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 84 billion cubic feet.

Total U.S. natural gas storage stood at 3.814 trillion cubic feet. Stocks were 434 billion cubic feet higher than last year at this time and 163 billion cubic feet above the five-year average of 3.651 trillion cubic feet for this time of year.

Stockpiles are set to reach a record by the end of this month. The EIA sees storage levels peaking at 3.956 trillion in November, which would top the November 2012 high of 3.929 trillion.

A day earlier, natural gas futures lost 7.2 cents, or 2.91%. It earlier fell to $2.379, the lowest since June 2012, after updated forecasting models showed that unseasonably warm readings will spread throughout most of the country next week.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.

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









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