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posted on 20 May 2016

Investing.com Weekly Wrap-Up 20 May 2016

Written by , Investing.com

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.38%

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 gained 0.38%, while the S&P 500index climbed 0.60%, and the NASDAQ Composite index climbed 1.21%.

The best performers of the session on the Dow Jones Industrial Average were EI du Pont de Nemours and Company (NYSE:DD), which rose 2.08% or 1.34 points to trade at 65.75 at the close. Meanwhile, American Express Company (NYSE:AXP) added 1.88% or 1.18 points to end at 63.92 and Intel Corporation (NASDAQ:INTC) was up 1.75% or 0.52 points to 30.15 in late trade.

The worst performers of the session were McDonald's Corporation (NYSE:MCD), which fell 2.18% or 2.73 points to trade at 122.56 at the close. Nike Inc (NYSE:NKE) declined 0.98% or 0.56 points to end at 56.48 and Coca-Cola Company (NYSE:KO) was down 0.83% or 0.37 points to 43.95.

The top performers on the S&P 500 were Applied Materials Inc (NASDAQ:AMAT) which rose 13.81% to 22.66, Micron Technology Inc (NASDAQ:MU) which was up 7.25% to settle at 10.80 and L Brands Inc (NYSE:LB) which gained 4.82% to close at 63.54.

The worst performers were Foot Locker Inc (NYSE:FL) which was down 6.46% to 54.77 in late trade, Campbell Soup Company (NYSE:CPB) which lost 6.38% to settle at 59.90 and Deere & Company (NYSE:DE) which was down 5.48% to 77.74 at the close.

The top performers on the NASDAQ Composite were Cellectar Biosciences Inc (NASDAQ:CLRB) which rose 228.57% to 3.4500, Globus Maritime Ltd (NASDAQ:GLBS) which was up 41.89% to settle at 0.6100 and Globeimmune (NASDAQ:GBIM) which gained 32.00% to close at 1.32.

The worst performers were Neovasc Inc (NASDAQ:NVCN) which was down 75.00% to 0.46 in late trade, Onconova Th (NASDAQ:ONTX) which lost 24.96% to settle at 0.3977 and Xtera Communications Inc (NASDAQ:XCOM) which was down 3.43% to 1.69 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 2581 to 736 and 26 ended unchanged; on the Nasdaq Stock Exchange, 1935 rose and 643 declined, while 60 ended unchanged.

Shares in Applied Materials Inc (NASDAQ:AMAT) rose to 52-week highs; up 13.81% or 2.75 to 22.66. Shares in Foot Locker Inc (NYSE:FL) fell to 52-week lows; down 6.46% or 3.78 to 54.77. Shares in Neovasc Inc (NASDAQ:NVCN) fell to 5-year lows; falling 75.00% or 1.38 to 0.46.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 6.92% to 15.20.

Additional stock news from Reuters at Investing.com with more details on U.S. markets.

Forex

EUR/USD rose moderately on Friday bouncing from one-month lows, as currency traders continued to digest hawkish signals from the Federal Reserve that it appears ready to lift interest rates for the first time this since their historic rate hike in December.

The currency pair traded between 1.1197 and 1.1237 before settling at 1.1223, up 0.0021 or 0.18% on the session. With the slight gains, the euro halted a three-day losing streak while closing higher for only the fourth time for the month of May. Since eclipsing 1.16 to hit an eight-month high at the start of the month, the euro has fallen more than 2.5% against the dollar. More broadly, the euro is still up by nearly 4% against its American counterpart year to date.

EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1713, the high from Aug. 24.

As the dollar took a breather on Friday, investors looked ahead to a highly-anticipated bilateral meeting between U.S. Treasury secretary Jack Lew and Japan finance minister Taro Aso over the weekend at the Group of Seven finance leaders' summit in Japan. On Friday, a host of prominent finance ministers at the meeting reiterated the importance of abstaining from currency manipulation, amid widespread concern that Japan could engage in possible actions to devalue the yen in an effort to bolster imports and provide a boost to equities on the Nikkei 225. While expressing discontent with recent moves by the Japanese government to intervene in global foreign exchange markets, Aso reaffirmed on Friday that it is committed to "avoiding competitive currency devaluation".

Last month, Lew sent explicit warnings to China, Germany and Japan to not take part in competitive currency devaluation, whether through Quantitative Easing or interest rate moves. At Friday's summit, Lew told reporters that top foreign officials made progress at February's G20 meeting in Shanghai due to a "re-commitment" by participants to refrain from such currency manipulations.

Market players also continued to digest broad signals from the Federal Open Market Committee (FOMC) that it will raise short-term interest rates at a two-day meeting next month if the domestic economy shows improvement over the next few weeks. Earlier this week, several FOMC policymakers indicated that the committee could lift rates more than once before the end of the year, if global financial risk continues to recede and inflation firms. The FOMC has left its benchmark Federal Funds Rate at the current range between 0.25 and 0.50% at each of its three meetings this year. In December, the FOMC abandoned a seven-year zero interest rate policy by raising the Fed Funds Rate 25 basis points.

On Friday afternoon, the U.S. Commodities Futures Trading Commission (CFTC) said in its weekly Commitment of Traders report that short positions in the EUR/USD rose by 1,000last week to 23,000, while long positions in the yen remained unchanged at 59,000. Thelargest change occurred in the AUD/USD, where long positions fell by 13,000 to 25,000. Overall, speculators cut their short wagers in the U.S. dollar for the second straight week from a total value of $6.19 billion to $4.19, according to calculations from Reuters.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.10% to an intraday high of 95.46 before closing at 95.29. Although the dollar closed higher for the fourth straight week, the index is still down more than 4% since early-December.

CTFC Commitment of Traders

Again there are few major sentiment changes in this week's report. This week speculators became more bullish on oil and shifted from bullish to slightly bearish on the S&P 500.

Note: This data closes on Wednesday so the last two days of trading are not reflected.

cot.2016.may.18

Gold

Gold inched down on Friday while hovering near a three-week low, as investors remained focused on the dollar's renewed upward push and hawkish indications from the Federal Reserve on an imminent interest rate hike before the end of the first half of the year.

On the Comex division of the New York Mercantile Exchange, gold for June delivery traded between $1,249.50 and $1,260.10 an ounce before settling at $1,251.35, down $3.55 or 0.28%% on the session. For the week, gold fell by approximately $20 an ounce, suffering one of its worst five-day stretches of an otherwise robust start to 2016. Despite the recent the downturn, the precious metal is up by more than 18% since January 1st and is on pace for one of its strongest first halves of a year in more than a decade.

Gold likely gained support at $1,247.50, the low from Thursday's session when it plunged more than 1.5% on the session. The yellow metal was also met with resistance at $1,276.40, the high from May 18.

Metal traders continued to closely monitor fluctuations in the dollar, as the greenback lingered near 7-week highs from the previous session. At the G-7 Summit in Sendai, Japan, a host of prominent finance ministers reiterated the importance of abstaining from currency manipulation, amid widespread concern that Japan could engage in possible actions to devalue the yen in an effort to bolster imports and provide a boost to equities on the Nikkei 225. While expressing discontent with recent moves by the Japanese government to intervene in global foreign exchange markets, Japan finance minister Taro Aso reaffirmed that it is committed to "avoiding competitive currency devaluation".

Last month, U.S. Treasury secretary Jack Lew sent explicit warnings to China, Germany and Japan to not take part in competitive currency devaluation, whether through Quantitative Easing or interest rate moves. At Friday's summit, Lew told reporters that top foreign officials made progress at February's G20 meeting in Shanghai due to a "re-commitment" by participants to refrain from such currency manipulations.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.10% to an intraday high of 95.46. Although the dollar is on pace for one of its strongest weeks since the start of March, the index is still down more than 4% since early-December.

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

Market players also continued to digest broad signals from the Federal Open Market Committee (FOMC) that it will raise short-term interest rates at a two-day meeting next month if the domestic economy shows improvement over the next few weeks. Earlier this week, several FOMC policymakers indicated that the committee could lift rates more than once before the end of the year, if global financial risk continues to recede and inflation firms. The FOMC has left its benchmark Federal Funds Rate at the current range between 0.25 and 0.50% at each of its three meetings this year.

Any rate hikes this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.

Silver for July delivery gained 0.027 or 0.16% to $16.520 an ounce.

Copper for July delivery fell 0.007 or 0.34% to $2.054 a pound.

Oil

U.S. crude futures hit a fresh seven-month high on Friday before paring some of the gains, amid broad signals that supply disruptions in Nigeria, Canada and Libya are about to end and ominous comments from Russia's energy ministry casting doubt on the resolution of a coordinated output freeze between OPEC and Non-OPEC producers.

On the New York Mercantile Exchange, WTI crude for July delivery traded in a broad range between $47.95 and $49.28 a barrel before settling at $48.38, down 0.29 or 0.60% on the session. On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $48.08 and $49.38 a barrel, before closing at $48.70, down 0.15 or 0.31% on the day. Although North Sea brent futures remain near 2016-yearly highs, brent crude has yet to crack $50 a barrel on the calendar year - a level it last reached in early-November.

Both the international and U.S. benchmarks of crude are up by more than 15% since Saudi Arabia abruptly ended a highly-anticipated meeting in Doha in mid-April aimed at stabilizing persistently low global oil prices. Saudi Arabia, the world's largest exporter, left the summit after insisting that main rival Iran take part in any pacts involving a comprehensive production freeze. More broadly, U.S. crude has surged by more than 60% since falling to 13-year lows at $26.05 a barrel on February 11.

While oil prices continued to rise on Friday, there are some indications that the prolonged rally may have reached its peak. In Western Canada, a number of top oil companies appeared ready to resume production, as raging wildfires moved away from oil sands operations in the region. In Alberta, firefighters were aided by cool, damp temperatures which helped them keep conflagrations away from two major oil sand production facilities. Earlier this month, the devastating fires forced thousands of residents from their homes in Fort McMurray, Alberta, shutting down numerous pipelines into the U.S. Consequently, as much as 1.5 million barrel per day of oil was forced offline as several major companies halted operations. Chad Morrison, Alberta's Forest Ministry's Chief Wildfire Official, at a news conference in Edmonton, said:

"The threat definitely has diminished around the communities and the oil-sands facilities. We held the fire yesterday in all critical areas."

Elsewhere, Russia energy minister Alexander Novak said Friday that it is unlikely OPEC will reach a consensus on a coordinated output freeze when the 13-nation group meets at a semi-annual meeting on June 2 in Vienna. Last month, OPEC production rose by 15,000 to 32.251 million bpd, remaining near all-time record highs. Addressing reporters at a Black Sea resort in Sochi, Novak said global supply is currently exceeding demand by 1.5 million bpd - far above the pace forecasted by a number of leading analysts in the energy industry.

Oil services firm Baker Hughes said Friday in its weekly rig count that U.S. oil rigs were unchanged last week at 318, halting an 8-week streak of weekly declines. The combined Oil and Gas rig count for the week ending on May 13 fell by two to 404, dropping to the lowest level since the series was launched in 1947. Crude prices were relatively unchanged following the release.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.10% to an intraday high of 95.46. Although the dollar is on pace for one of its strongest weeks since the start of March, the index is still down more than 4% since early-December.

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

Natural Gas (Thursday Report)

U.S. natural gas futures held near four-week lows in North America trade on Thursday, after data showed that natural gas supplies in storage in the U.S. rose broadly in line with market expectations last week.

Natural gas for delivery in June on the New York Mercantile Exchange fell to a session low of $1.976 per million British thermal units, a level not seen since April 19. It last stood at $1.989 by 15:00GMT, or 11:00AM ET, down 1.2 cents, or 0.6%. Prices were at around $1.980 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 May 13 rose by 73 billion cubic feet, compared to expectations for a gain of 78 billion.

Total U.S. natural gas storage stood at 2.754 trillion cubic feet, 28.8% higher than levels at this time a year ago and 28.9% above the five-year average for this time of year.

A day earlier, natural gas futures lost 4.7 cents, or 2.29%, after the latest U.S. weather model called for mild temperatures over the next two weeks, which should reduce heating demand during that time.

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

Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.

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