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posted on 20 January 2017

Investing.com Weekly Wrap-Up 20 January 2017

Written by , Investing.com

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.48%

U.S. stocks were higher after the close on Friday, as gains in the Basic Materials, Consumer Goods and Telecoms sectors led shares higher.

At the close in NYSE, the Dow Jones Industrial Average added 0.48%, while the S&P 500 index added 0.34%, and the NASDAQ Composite index gained 0.28%.

The best performers of the session on the Dow Jones Industrial Average were Merck & Company Inc (NYSE:MRK), which rose 3.65% or 2.20 points to trade at 62.53 at the close. Meanwhile, Procter & Gamble Company (NYSE:PG) added 3.25% or 2.75 points to end at 87.45 and International Business Machines (NYSE:IBM) was up 2.24% or 3.74 points to 170.55 in late trade.

The worst performers of the session were General Electric Company (NYSE:GE), which fell 2.18% or 0.68 points to trade at 30.53 at the close. Wal-Mart Stores Inc (NYSE:WMT) declined 0.65% or 0.44 points to end at 67.18 and American Express Company (NYSE:AXP) was down 0.64% or 0.49 points to 76.20.

The top performers on the S&P 500 were Skyworks Solutions Inc (NASDAQ:SWKS) which rose 13.01% to 88.67, CF Industries Holdings Inc (NYSE:CF) which was up 6.05% to settle at 34.20 and Qorvo Inc (NASDAQ:QRVO) which gained 4.65% to close at 61.02.

The worst performers were Bristol-Myers Squibb Company (NYSE:BMY) which was down 11.28% to 49.23 in late trade, Transdigm Group Incorporated (NYSE:TDG) which lost 9.87% to settle at 226.90 and Endo International PLC (NASDAQ:ENDP) which was down 4.34% to 12.34 at the close.

The top performers on the NASDAQ Composite were Globus Maritime Ltd (NASDAQ:GLBS) which rose 31.79% to 9.7000, Transgenomi (NASDAQ:TBIO) which was up 30.30% to settle at 0.8600 and Cartesian I (NASDAQ:CRTN) which gained 33.64% to close at 1.430.

The worst performers were Naked Brand Group Inc (NASDAQ:NAKD) which was down 20.80% to 1.679 in late trade, Pluristem Therapeutics Inc (NASDAQ:PSTI) which lost 17.86% to settle at 1.1500 and Affimed NV (NASDAQ:AFMD) which was down 16.28% to 1.800 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 2067 to 1128 and 45 ended unchanged; on the Nasdaq Stock Exchange, 1507 rose and 991 declined, while 127 ended unchanged.

Shares in Skyworks Solutions Inc (NASDAQ:SWKS) rose to 52-week highs; rising 13.01% or 10.21 to 88.67. Shares in Bristol-Myers Squibb Company (NYSE:BMY) fell to 52-week lows; losing 11.28% or 6.26 to 49.23. Shares in Endo International PLC (NASDAQ:ENDP) fell to 5-year lows; down 4.34% or 0.56 to 12.34. Shares in International Business Machines (NYSE:IBM) rose to 52-week highs; gaining 2.24% or 3.74 to 170.55. Shares in Affimed NV (NASDAQ:AFMD) fell to all time lows; losing 16.28% or 0.350 to 1.800.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 9.47% to 11.57.

Gold for February delivery was up 0.50% or 6.05 to $1207.55 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March rose 2.05% or 1.07 to hit $53.19 a barrel, while the March Brent oil contract rose 2.36% or 1.28 to trade at $55.44 a barrel.

EUR/USD was up 0.29% to 1.0696, while USD/JPY fell 0.26% to 114.56.

The US Dollar Index was down 0.29% at 100.81.

Read additional news from Reuters at Investing.com.

Forex

The dollar weakened against a basket of currencies on Friday as Donald Trump became the 45th president of the United States and used his inaugural speech to hit populist themes on halting off-shoring of work that have raised concerns of a trade war with leading manufacturing exporters such as China.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dropped 0.31% to 100.79. USD/JPY changed hands at 114.59, down 0.24% after the speech and market close, while GBP/USD rose 0.23% to 1.2374 as the United Kingdom prepares to exit the European Union trade bloc and strike stronger trade ties to the U.S.

USD/CAD was nearly flat at 1.3317 as investors awaited further word on the fate of the North American Free Trade Agreement that also includes Mexico in a massive trade bloc. The peso, USD/MXN tumbled 1.66% to 21.58 on expectations that Trump's promise to build a wall on the southern border and impose some kind of import tax would hit current trade patterns hard. Trump said:

"From this moment on, it's going to be America First. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength."

Earlier, the dollar pulled back from session highs against the other majors currencies sparked by comments Thursday from Fed Chair Janet Yellen that the central bank should continue to raise interest rates, but slowly.

Speaking at a conference in San Francisco, Yellen said that:

"... allowing the economy to run markedly and persistently ‘hot’ would be risky and unwise. "[But] I consider it prudent to adjust the stance of monetary policy gradually over time."

Earlier, the pound had weakened after the U.K. Office for National Statistics said on Friday that retail sales declined 1.9% in December, confounding expectations for a 0.1% slip. Retail sales fell 0.1% in November, whose figure was revised from a previously estimated 0.2% rise.

Year-on-year, retail sales increased by 4.3% last month, compared to expectations for a 7.2% climb. Core retail sales, which exclude automobiles, dropped 2.0% in December, disappointing expectations for a 0.3% fall.

As well on Friday, data showed that China’s gross domestic product rose 6.8% in the fourth quarter of 2016, in line with expectations. Year-on-year, China’s economy grew at a rate of 6.8%, slightly above expectations for a growth rate of 6.7%.

The data eased concerns over a slowdown in the world’s second biggest economy, although worries surrounding the country’s growing debt persisted. AUD/USD traded at 0.7560, down 0.01% late on Friday after posting gains earlier in the day with Australia China’s biggest export partner.

CTFC Commitment of Traders

This week speculators changed net positions very little except for bullishness increasing for the S&P 500 and net long positions on crude oil reaching an all-time high. Bullishness continued strong for gold and the dollar.

Note: This data is for the week ending on Tuesday so the last three days of trading are not reflected.

cot.2017.jan.11

Gold

Gold prices gained on Friday in the U.S. as Donald Trump delivered an inaugural address as president that vowed to pursue an America First policy in economic management, raising same concerns that global trade patterns are in for more shock as Brexit looms and the North American Free Trade Agreement comes under the scanner. Trump said:

"From this moment on, it's going to be America First. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength."

On the Comex division of the New York Mercantile Exchange, gold futures for March delivery rose 0.67% to $1,209.50 a troy ounce, while copper futures gained 0.21% to $2.616 a pound with the industrial metal seen as a bellwether for global economic prospects.

The dollar weakened against a basket of currencies on Friday as Donald Trump became the 45th president of the United States and used his inaugural speech to hit populist themes on halting off-shoring of work that have raised concerns of a trade war with leading manufacturing exporters such as China.

The U.S. dollar index fell 0.33% to 100.07. In earlier trade, gold's safe-have status was sought as caution surrounded Trump’s future policies. The February contract ended Thursday’s session 0.87% lower at $1,201.50 an ounce.

However, gold faces resistance to higher prices on expected interest rate hikes this year with Fed Chair Janet Yellen noting on Thursday the central bank should continue to raise interest rates, but slowly.

Speaking at a conference in San Francisco, Yellen said that "allowing the economy to run markedly and persistently ‘hot’ would be risky and unwise," before adding: "I consider it prudent to adjust the stance of monetary policy gradually over time."

The greenback also initially strengthened on Thursday following the release of strong U.S. jobless claims and housing starts data, as well as an upbeat Philly Fed manufacturing activity report on Thursday. A stronger dollar makes gold, denominated in greenbacks, more expensive in other currencies, particularly the world's top two buyers, India and China.

On Friday data showed that China’s gross domestic product rose 6.8% in the fourth quarter of 2016, in line with expectations. Year-on-year, China’s economy grew at a rate of 6.8%, slightly above expectations for a growth rate of 6.7%.

The data eased concerns over a slowdown in the world’s second biggest economy, although worries surrounding the country’s growing debt persisted.

Oil

Crude prices jumped on Friday with investors noting an OPEC meeting next week could confirm solid compliance in a coordinated effort with non-OPEC nations to trim almost 1.8 million barrels per day (bpd) from global production.

Crude oil for February delivery on the New York Mercantile Exchange jumped 2.04% to settle at $52.42 a barrel. On the ICE Futures Exchange in London, Brent oil for March delivery rose 2.46% to settle at $55.49 a barrel.

However, price gains were tempered as U.S. oil drillers added 29 rigs by the end of last week taking the total to 551, compared to 510 a year ago, as drilling activity in shale formations continues to grow again with higher oil prices.

Since crude prices first topped $50 a barrel in May drillers have added a total of 235 oil rigs, with almost two-thirds in the Permian basin, the nation's biggest shale oil formation located in west Texas and eastern New Mexico. Other supply responses are coming from OPEC members Libya, Iran and Nigeria which are exempt from the cvuts.

Libya's National Oil Corporation (NOC) said its output now stands at 722,000 bpd, resuming its rise from levels below 400,000 barrels a day late in December after warring factions allowed oil fields to resume output and ports to load supplies.

Natural Gas (Thursday Report)

U.S. natural gas futures reversed losses on Thursday morning to bounce off a more than one-week low after data showed that natural gas supplies in storage in the U.S. fell more than expected last week.

Natural gas for February delivery on the New York Mercantile Exchange tacked on 2.7 cents, or 1%, to $3.333 per million British thermal units by 10:35AM ET (15:35GMT).

Futures were at around $3.298 prior to the release of the supply data after falling to a session low of $3.257 earlier, a level not seen since January 11.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. declined by 243 billion cubic feet in the week ended January 13, exceeding market expectations for a drop of 231 billion cubic feet.

That compared with a withdrawal of 151 billion cubic feet in the preceding week, 178 billion a year earlier and a five-year average drop of 170 billion cubic feet.

Total natural gas in storage currently stands at 2.917 trillion cubic feet, according to the U.S. Energy Information Administration, 12.9% lower than levels at this time a year ago and around 2.6% below the five-year average for this time of year.

Meanwhile, weather forecasts for the end of January turned warmer, which should dampen demand for the heating fuel.

Weather models initially predicted colder temperatures throughout most parts of the U.S. during the period.

Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.

Prices typically rise during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating.

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