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posted on 06 November 2015

Investing.com Weekly Wrap-Up 06 November 2015

Written by , Investing.com

U.S. stocks mixed at close of trade; Dow Jones Industrial Average up 0.26%

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

At the close in NYSE, the Dow Jones Industrial Average gained 0.26%, while the S&P 500 index fell 0.03%, and the NASDAQ Composite index climbed 0.38%.

The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc (N:GS), which rose 3.72% or 7.15 points to trade at 199.17 at the close. Meanwhile, JPMorgan Chase & Co (N:JPM) added 3.04% or 2.02 points to end at 68.46 and Walt Disney Company (N:DIS) was up 2.36% or 2.67 points to 115.67 in late trade.

The worst performers of the session were UnitedHealth Group Incorporated (N:UNH), which fell 1.22% or 1.42 points to trade at 114.81 at the close. Procter & Gamble Company (N:PG) declined 1.07% or 0.82 points to end at 75.57 and Verizon Communications Inc (N:VZ) was down 0.91% or 0.42 points to 45.78.

The top performers on the S&P 500 were Qorvo Inc (O:QRVO) which rose 23.23% to 55.55, NVIDIA Corporation (O:NVDA) which was up 13.86% to settle at 31.55 and Monster Beverage 1990 Corp (O:MNST) which gained 13.61% to close at 150.24.

The worst performers were TripAdvisor Inc (O:TRIP) which was down 6.85% to 77.42 in late trade, Freeport-McMoran Copper & Gold Inc (N:FCX) which lost 6.36% to settle at 10.75 and Activision Blizzard Inc (O:ATVI) which was down 6.32% to 35.00 at the close.

The top performers on the NASDAQ Composite were Zs Pharma I (O:ZSPH) which rose 40.64% to 89.04, Discovery Laboratories Inc (O:DSCO) which was up 39.47% to settle at 0.47 and Stampscom Inc (O:STMP) which gained 38.10% to close at 104.93.

The worst performers were Iconix Brand Group Inc (O:ICON) which was down 57.37% to 6.88 in late trade, KaloBios Pharmaceuticals Inc (O:KBIO) which lost 52.33% to settle at 0.920 and Cumulus Media Inc (O:CMLS) which was unchanged 0.00% to 0.290 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1357 to 1174 and 1 ended unchanged; on the Nasdaq Stock Exchange, 1617 rose and 902 declined, while 46 ended unchanged.

Shares in NVIDIA Corporation (O:NVDA) rose to 5-year highs; up 13.86% or 3.84 to 31.55. Shares in Zs Pharma I (O:ZSPH) rose to all time highs; up 40.64% or 25.73 to 89.04. Shares in Iconix Brand Group Inc (O:ICON) fell to 5-year lows; falling 57.37% or 9.26 to 6.88. Shares in KaloBios Pharmaceuticals Inc (O:KBIO) fell to all time lows; down 52.33% or 1.010 to 0.920. Shares in Stampscom Inc (O:STMP) rose to 5-year highs; up 38.10% or 28.95 to 104.93. Shares in Cumulus Media Inc (O:CMLS) unchanged to all time lows; unchanged 0.00% or 0.000 to 0.290.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 4.72% to 14.34.

Additional stock news from Reuters at Investing.com.

Forex

EUR/USD crashed by more than 1.25% to a six-month low on Friday, after a vigorous U.S. jobs report helped strengthened hawkish arguments for an imminent interest rate hike by the Federal Reserve next month.

The currency pair traded in a broad range between 1.0708 and 1.0894 before settling at 1.0739, down 0.0144 or 1.31% on the session. At one point, the euro fell to its lowest level against the dollar since April 22. After peaking above 1.1475 in mid-October, the euro has slumped nearly 6% versus its American counterpart over the last three and a half weeks.

EUR/USD likely gained support at 1.0708, the low from April 21 and was met with resistance at 1.1496, the high from Oct. 15.

On Friday morning, the U.S. Department of Labor said in its October national employment report that nonfarm payrolls surged by 271,000 last month, significantly above expectations for a consensus gain of 190,000. The sharp gains marked the largest increase in U.S. nonfarm jobs since last December. Private payrolls also soared by 268,000 in October, above forecasts of a 174,000 increase.

Large upswings in Professional and Business Services and Trade & Transportation, as well as Retail Trade ahead of the Holiday season, bolstered overall job gains. Within the Professional and Business Services sector, which added 78,000 positions, temporary jobs rose by 25,000. Temporary hiring is a leading indicator for future employment. Restrained by weak export levels, Manufacturing employment remained flat, following two prior months of declines.

One month after wages nationwide ended September unchanged, average hourly earnings jumped 0.4%, considerably above forecasts of a 0.2% gain. Over the last 12 months, hourly wages have spiked by 2.5%, their strongest annual increase in more than six years. The unemployment rate, meanwhile, dipped by 0.1% to 5.0%, in line with consensus estimates.

The U-6 unemployment rate, a broader gauge of the national employment situation, fell by 0.2% to 9.8%, its lowest level since May, 2008. The reading, which measures the total level of unemployed workers plus those marginally attached to the labor force, stood at 11.1% last October. The indicator also accounts for workers who are no longer looking for a job, but have looked for one over the last 12 months.

By comparison, the alternative measure of underemployment peaked at 18% in January, 2010, as the nation continued to recover from the Financial Crisis. The U-6 rate is a preferred measure of unemployment by Fed chair Janet Yellen as she assesses the strength of the U.S. labor market.

On Wednesday in testimony before the House Financial Services Committee, Yellen sent strong hints that the Federal Open Market Committee could raise short-term interest rates at its December meeting if the economy demonstrated continued improvement. The FOMC's benchmark Federal Funds Rate has remained at its current near-zero level since 2009. Following Friday's optimistic employment report, the CME Group (O:CME) increased the probability of a December rate hike to 70%, up from a percentage in the low 60s in response to Yellen's comments on Capitol Hill.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, shot up more than 1.25% to an intraday high of 99.47, before closing slightly lower at 99.29. The index soared to its highest level since mid-April.

The Fed's first rate hike in nearly a decade is viewed as bullish for the dollar, as investors abroad pile into the greenback to capitalize on higher yields. Next month, the European Central Bank is also expected to increase the scope of its EUR 1.1 trillion asset-purchasing plan and possibly lower rates following comments from ECB president Mario Draghi earlier this week.

CTFC Commitment of Traders

Speculators this week were were more bullish on the U.S. dollar. Other sentiment changes were quite subdued.

cot.2015.nov.04

Gold

Gold crashed to fresh three-month lows on Friday amid a surging dollar, as a robust U.S. jobs report augmented hawkish arguments for a December interest rate hike by the Federal Reserve.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,084.60 and $1,109.70 an ounce before settling at $1,088.00, down 16.20 or 1.47% on the session. Gold has fallen nearly 8% since the start of trading on Oct. 28, the first of its current eight-session losing streak. At one point on Friday, gold fell to its lowest level since Aug. 7. The precious metal is nearing its six-and a half year low from July when it plunged below $1,080 an ounce during a 10-day skid.

Gold likely gained support at $1,084.60, the low from July 24 and was met with resistance at $1,141.80, the high from Nov. 1.

On Friday morning, the U.S. Department of Labor said in its October national employment report that nonfarm payrolls surged by 271,000 last month, significantly above expectations for a consensus gain of 190,000. The sharp gains marked the largest increase in U.S. nonfarm jobs since last December. Private payrolls also soared by 268,000 in October, above forecasts of a 174,000 increase.

Large upswings in Professional and Business Services and Trade & Transportation, as well as Retail Trade ahead of the Holiday season, bolstered overall job gains. Within the Professional and Business Services sector, which added 78,000 positions, temporary jobs rose by 25,000. Temporary hiring is a leading indicator for future employment. Restrained by weak export levels, Manufacturing employment remained flat, following two prior months of declines.

One month after wages nationwide ended September unchanged, average hourly earnings jumped 0.4%, considerably above forecasts of a 0.2% gain. Over the last 12 months, hourly wages have spiked by 2.5%, their strongest annual increase in more than six years. The unemployment rate, meanwhile, dipped by 0.1% to 5.0%, in line with consensus estimates.

The U-6 unemployment rate, a broader gauge of the national employment situation, fell by 0.2% to 9.8%, its lowest level since May, 2008. The reading, which measures the total level of unemployed workers plus those marginally attached to the labor force, stood at 11.1% last October. The indicator also accounts for workers who are no longer looking for a job, but have looked for one over the last 12 months.

By comparison, the alternative measure of underemployment peaked at 18% in January, 2010, as the nation continued to recover from the Financial Crisis. The U-6 rate is a preferred measure of unemployment by Fed chair Janet Yellen as she assesses the strength of the U.S. labor market.

On Wednesday in testimony before the House Financial Services Committee, Yellen sent strong hints that the Federal Open Market Committee could raise short-term interest rates at its December meeting if the economy demonstrated continued improvement. The FOMC's benchmark Federal Funds Rate has remained at its current near-zero level since 2009. Following Friday's optimistic employment report, the CME Group (O:CME) increased the probability of a December rate hike to 70%, up from a percentage in the low 60s in response to Yellen's comments on Capitol Hill.

A rate hike is considered bearish for gold, which struggles to compete with high-yield bearing assets.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, shot up more than 1.25% to an intraday high of 99.47. The index soared to its highest level since mid-April.

The Fed's first rate hike in nearly a decade is viewed as bullish for the dollar, as investors abroad pile into the greenback in an effort to capitalize on higher yields. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Silver for December delivery fell 0.278 or 1.88% to 14.705 an ounce.

Copper for December delivery lost 0.013 or 0.56% to 2.242 a pound.

Oil

Crude slumped by more than 1% on Friday amid a soaring dollar, as the weekly U.S. oil rig count moved lower for a 10th consecutive period last week exacerbating concerns of oversupply on domestic energy markets.

On the New York Mercantile Exchange, WTI crude for December delivery traded in a range between $44.12 and $45.64 a barrel, before settling at $44.33, down 0.87 or 1.94% on the session. Following a gain of more than 3.8% on Monday, Texas Long Sweet futures have lost more than 1.85% in each of the last three sessions. After surging above $47 a barrel late last week, U.S. crude futures have lost approximately 5.5% in value.

On the Intercontinental Exchange (ICE), brent crude for December delivery wavered between $47.28 and $48.58 a barrel, before closing at $47.47, down 0.47 or 0.97% on the day. North Brent Sea futures have closed lower in five of six sessions in November. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $3.14, above Thursday's level of $2.75 at the close of trading.

On Friday, oil services firm Baker Hughes (N:BHI) said in a weekly report that U.S. oil rigs fell by six to 572 for the week ending on Oct. 30. With the mild losses, oil rigs nationwide dropped to their lowest level since June, 2010. The current skid follows an extended losing streak earlier this year when the rig count decreased for a period of 25 straight weeks. During a brief impasse over the summer, U.S. oil rigs increased slightly for a six-week span before resuming the slump.

A significant reduction in the total oil rig level in the U.S. provides indications that nationwide crude production could be on the verge of falling sharply. Last week, U.S. crude output surged by 48,000 barrels to 9.16 million barrels per day, its highest level in nearly a month. A week earlier, crude output nationwide inched up 16,000 barrel to 9.112 million bpd. Crude production remains considerably below its level from this spring when it soared above 9.6 million bpd to reach its highest level in more than 40 years.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, shot up more than 1.25% to an intraday high of 99.47 on the back of a robust U.S. national employment report. In October, the U.S. economy added 271,000 nonfarm payrolls, its highest monthly gain since last December. The dollar index jumped to its highest level since mid-April.

Dollar-denominated commodities such as crude become less expensive in U.S. dollars when the dollar appreciates and more expensive is other currencies which depreciate..

Natural Gas (Thursday Report)

Natural gas futures rallied sharply on Thursday, after data showed natural gas supplies rose less than expected last week.

Natural gas for delivery in December on the New York Mercantile Exchange jumped 7.7 cents, or 3.4%, to trade at $2.339 per million British thermal units during U.S. morning hours. Prices were at around $2.315 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 30 rose by 52 billion cubic feet, below expectations for an increase of 60 billion.

That compares with builds of 63 billion cubic feet in the prior week, 91 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 68 billion cubic feet.

Total U.S. natural gas storage stood at 3.929 trillion cubic feet. Stocks were 371 billion cubic feet higher than last year at this time and 147 billion cubic feet above the five-year average of 3.782 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.

The North American natural-gas market has been mired in a supply glut for years amid robust output.

According to industry research group Baker Hughes (N:BHI), the number of rigs drilling for natural gas in the U.S. increased by four last week to 197. Natural gas traders closely watch the rig count to gauge future supply growth.

Natural gas prices have been under pressure this week as forecasts pointed to unseasonably warm readings for early November.

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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