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posted on 09 September 2016 Weekly Wrap-Up 09 September 2016

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U.S. stocks lower at close of trade; Dow Jones Industrial Average down 2.13%

U.S. stocks were lower after the close on Friday, as losses in the Utilities,Telecoms and Basic Materials sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 2.13% to hit a new 1-month low, while the S&P 500 index lost 2.45%, and the NASDAQ Composite index lost 2.54%.

The best performers of the session on the Dow Jones Industrial Average were JPMorgan Chase & Co (NYSE:JPM), which fell 0.91% or 0.61 points to trade at 66.64 at the close. Meanwhile, Johnson & Johnson (NYSE:JNJ) fell 1.08% or 1.29 points to end at 118.18 and Merck & Company Inc (NYSE:MRK) was down 1.17% or 0.74 points to 62.50 in late trade.

The worst performers of the session were Verizon Communications Inc (NYSE:VZ), which fell 3.28% or 1.76 points to trade at 51.84 at the close. Boeing Company (NYSE:BA) declined 3.28% or 4.36 points to end at 128.54 and Caterpillar Inc (NYSE:CAT) was down 3.28% or 2.74 points to 80.80.

The top performers on the S&P 500 were Wynn Resorts Limited (NASDAQ:WYNN) which rose 2.75% to 98.41, MetLife Inc (NYSE:MET) which was up 1.06% to settle at 43.93 and M&T Bank Corporation (NYSE:MTB) which gained 0.78% to close at 117.12.

The worst performers were Diamond Offshore Drilling Inc (NYSE:DO) which was down 10.11% to 15.64 in late trade, CarMax Inc (NYSE:KMX) which lost 8.23% to settle at 55.22 and United Rentals Inc (NYSE:URI) which was down 7.12% to 77.91 at the close.

The top performers on the NASDAQ Composite were Lexicon Pharmaceuticals Inc (NASDAQ:LXRX) which rose 16.59% to 17.850, Ignite Restaurant Group Inc(NASDAQ:IRG) which was up 15.79% to settle at 0.880 and Auris Medical Holding AG (NASDAQ:EARS) which gained 15.19% to close at 1.820.

The worst performers were Glori Energy Technology Inc (NASDAQ:GLRI) which was down 39.90% to 0.1229 in late trade, Lantheus Holdings Inc (NASDAQ:LNTH) which lost 21.35% to settle at 7.440 and Marine Petroleum Trust (NASDAQ:MARPS) which was down 19.59% to 3.120 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 3060 to 181 and 35 ended unchanged; on the Nasdaq Stock Exchange, 2193 fell and 352 advanced, while 83 ended unchanged.

Shares in Lexicon Pharmaceuticals Inc (NASDAQ:LXRX) rose to 52-week highs; gaining 16.59% or 2.540 to 17.850.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 39.09% to 17.40 a new 1-month high.

Gold for December delivery was down 0.68% or 9.15 to $1332.45 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in October fell 4.16% or 1.98 to hit $45.64 a barrel, while the November Brent oil contract fell 4.32% or 2.16 to trade at $47.83 a barrel.

EUR/USD was down 0.28% to 1.1227, while USD/JPY rose 0.19% to 102.67.

The US Dollar Index was up 0.33% at 95.35.

Read additional news from Reuters at


The dollar erased losses against the other major currencies in quiet trade on Friday, as no major U.S. economic data was to be released throughout the day but gains were expected to remain limited as declined expectations for a 2016 U.S. rate hike continued to weigh.

EUR/USD fell 0.35% to 1.1220, off session highs of 1.1285.

The single currency had strengthened after European Central Bank President Mario Draghi said on Thursday that the current monetary policy is effective and the changes to the banks growth forecast are not so substantial as to warrant a decision to act.

The comments came after the central bank left its benchmark interest rate at a record-low 0.0%, in line with market expectations.

Meanwhile, sentiment on the dollar remained vulnerable as data on Thursday showing thatU.S. initial jobless claims fell to a six-week low last week failed to boost optimism over the strength of the economy.

GBP/USD slipped 0.20% to 1.3269.

The U.K. Office for National Statistics reported on Friday that the goods trade deficitnarrowed to £11.76 billion in July from £12.92 billion in June, whose figure was revised from a previously estimated deficit of £12.41 billion.

Analysts had expected the trade deficit to narrow to £11.75 billion.

USD/JPY rose 0.26% to 102.74, while USD/CHF gained 0.32% to trade at 0.9758.

The Australian and New Zealand dollars pushed lower, with AUD/USD down 1.01% at 0.7566 and with NZD/USD declining 0.74% to 0.7343.

Elsewhere, USD/CAD advanced 0.81% to 1.3038, the highest since September 2.

Statistics Canada reported on Friday that the number of employed people increased by 26,200 in August, beating expectations for a 15,000 rise and after a decline of 31,200 the previous month.

However, the report also showed that Canada's unemployment rate ticked up to 7.0% last month from 6.9% in July. Analysts had expected the unemployment rate to remain unchanged in August.

The commodity currencies were also hit by declining oil prices on Friday, as investors locked in profits from the previous session's surge sparked by data showing that U.S. crude supplies fell by the most since April 1985 last week.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.39% at 95.41, off session lows of 94.81 and the highest level since September 6.

CTFC Commitment of Traders

This week speculators were more bullish on the the U.S. dollar and long positions on gold reached as 2-month high.

Note: This data closes on Wednesday so the last two days of trading are not reflected. There were was very little change in investor sentiment this week.



Gold prices slipped lower on Friday, but losses were expected to remain limited as a globally weaker U.S. dollar continued to lend support to the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.16% at $1,339.35, not far from Wednesday's three-week high of $1,350.50.

The December contract ended Thursday's session 0.56% lower at $1,341.60 an ounce.

Futures were likely to find support at $1,323.20, the low from September 6 and resistance at $1,350.50, Wednesday's high.

Gold prices weakened briefly after data on Thursday showing that U.S. initial jobless claimsin the week ending September 3 decreased by 4,000 to a six-week low of 259,000 from the previous week's total of 263,000. Analysts expected jobless claims to rise by 2,000 to 265,000 last week.

But sentiment on the greenback remained vulnerable after downbeat U.S. employment datapublished last Friday crushed expectations for an upcoming rate hike by the Federal Reserve.

Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Markets were also digesting the European Central Bank's most recent policy statement, asthe ECB raised its 2016 growth forecast to 1.7% from 1.6%, but slightly lowered its 2017 forecast from 1.7% to 1.6% on Thursday.

At the conclusion of the bank's policy meeting, ECB President Mario Draghi said current monetary policy is effective and the changes to the banks growth forecast are not so substantial as to warrant a decision to act.

The comments came after the central bank left its benchmark interest rate at a record-low 0.0%, in line with market expectations.

Draghi added that interest rates would remain at present or lower levels for an "extended time" so the recovery would not be derailed.

Elsewhere in metals trading, silver futures for December delivery declined 0.46% at $19.587 a troy ounce, while copper futures for December delivery edged down 0.10% to $2.099 a pound.


Oil prices fell more than 2 percent on Friday, paring the previous session's spike as the market discounted an unexpected slump in U.S. crude inventories as a storm glitch.

Still, the market was on course to gain nearly 5 percent, its first weekly gain in three weeks, on hopes for a global deal on stabilizing crude output after Saudi Arabia, the leading oil producer inside OPEC, and Russia, the biggest producer outside the group, agreed on Monday to cooperate in oversupplied markets.

Brent crude (LCOc1) was down $1.35 at $48.64 a barrel by 11:52 a.m. ET (1552 GMT) after rising above $50 for the first time in two weeks on Thursday. U.S. crude (CLc1) was down $1.16 at $46.46.

Oil prices shot up on Thursday after U.S. government data showed the biggest weekly drop in stockpiles last week since January 1999 as Gulf Coast imports slumped to the lowest on record. Traders said imports fell as ships delayed offloading cargoes in Texas and Louisiana due to Tropical Storm Hermine.

"We're pulling back after the big run-up yesterday. We're expecting supplies to rise next week as production is back up after the storm in the Gulf of Mexico," said Phil Flynn, an analyst at Price Futures Group in Chicago.

"People are covering their shorts now because the market ran too far too fast."

Greenback-denominated oil was also under pressure after the dollar index (DXY) rose on concerns over the health of the EU economy and on remarks by Federal Reserve policymakers helped boost investor expectations of a near-term increase in U.S. interest rates. [USD/]

While the market traded fairly thin on Friday, analysts and traders continued to debate how effective a deal would be to limit supply when OPEC and non-OPEC producers meet informally in Algeria on Sept.26-28.

Algeria's oil minister on Friday underscored that tension, saying that two separate agreements could be required between OPEC and non-OPEC producers, highlighting the difficulties of clinching such deals.

The oil options market indicates investors could well be holding out for a deal further down the line and are displaying a lot more optimism, as demand and supply come closer to falling into balance.

The International Energy Agency has said it expects oil demand to finally exceed supply in the third quarter of 2016, meaning record global crude stockpiles should start falling.

But analysts from Morgan Stanley (NYSE:MS) said in a note there were risks the market might not rebalance until later. Morgan Stanley said:

"Once again, we see an increasing probability for several unexpected bearish developments to come together, which could push off rebalancing (seasonally-adjusted demand exceeding supply) to late 2017, or even 2018."

Natural Gas (Thursday Report)

U.S. natural gas futures extended gains on Thursday morning, after data showed that natural gas supplies in storage in the U.S. rose less than forecast last week.

Natural gas for delivery in October on the New York Mercantile Exchange jumped 9.7 cents, or 3.62%, to trade at $2.773 per million British thermal units by 10:32AM ET (14:32GMT). Futures were at around $2.751 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. rose by 36 billion cubic feet in the week ended September 2, below expectations for an increase of 43 billion.

That compared with a gain of 51 billion cubic feet in the preceding week, 72 billion a year earlier and a five-year average build of 64 billion cubic feet.

Total U.S. natural gas storage stood at 3.437 trillion cubic feet, 5.7% higher than levels at this time a year ago and 8.9% above the five-year average for this time of year.

On Wednesday, gas futures sank to a more than two-week low of $2.665 as traders reacted to the reality that higher summer demand for the commodity is coming to an end.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.

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

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