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posted on 05 January 2018

Investing.com Weekly Wrap Up 05January 2018

Written by , Investing.com

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.88%

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

At the close in NYSE, the Dow Jones Industrial Average added 0.88% to hit a new all time high, while the S&P 500 index gained 0.70%, and the NASDAQ Composite index climbed 0.83%.


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The best performers of the session on the Dow Jones Industrial Average were Boeing Co(NYSE:BA), which rose 4.10% or 12.17 points to trade at 308.84 at the close. Meanwhile,Visa Inc (NYSE:V) added 2.39% or 2.78 points to end at 118.86 and UnitedHealth Group Incorporated (NYSE:UNH) was up 1.91% or 4.28 points to 228.73 in late trade.

The worst performers of the session were JPMorgan Chase & Co (NYSE:JPM), which fell 0.64% or 0.70 points to trade at 108.34 at the close. Walt Disney Company (NYSE:DIS) declined 0.54% or 0.61 points to end at 111.62 and Goldman Sachs Group Inc (NYSE:GS) was down 0.51% or 1.31 points to 255.52.

The top performers on the S&P 500 were Western Union Company (NYSE:WU) which rose 5.91% to 20.60, Xilinx Inc (NASDAQ:XLNX) which was up 5.19% to settle at 74.15 andElectronic Arts Inc (NASDAQ:EA) which gained 4.85% to close at 112.39.

The worst performers were Range Resources Corporation (NYSE:RRC) which was down 3.68% to 16.76 in late trade, Johnson Controls International PLC (NYSE:JCI) which lost 3.59% to settle at 38.42 and Scana Corporation (NYSE:SCG) which was down 2.83% to 45.02 at the close.

The top performers on the NASDAQ Composite were Cytori Therapeutics Inc (NASDAQ:CYTX) which rose 73.75% to 0.4700, Tigenix NV (NASDAQ:TIG) which was up 72.00% to settle at 40.73 and My Size Inc (NASDAQ:MYSZ) which gained 68.15% to close at 1.66.

The worst performers were Ohr Pharmaceuticals Inc (NASDAQ:OHRP) which was down 81.34% to 0.377 in late trade, Chinanet Online Holdings Inc (NASDAQ:CNET) which lost 38.97% to settle at 5.7000 and Kala Pharmaceuticals Inc (NASDAQ:KALA) which was down 29.28% to 12.26 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 1836 to 1255 and 126 ended unchanged; on the Nasdaq Stock Exchange, 1445 rose and 1081 declined, while 120 ended unchanged.

Shares in Boeing Co (NYSE:BA) rose to all time highs; rising 4.10% or 12.17 to 308.84. Shares in Visa Inc (NYSE:V) rose to all time highs; gaining 2.39% or 2.78 to 118.86. Shares in UnitedHealth Group Incorporated (NYSE:UNH) rose to all time highs; gaining 1.91% or 4.28 to 228.73. Shares in Ohr Pharmaceuticals Inc (NASDAQ:OHRP) fell to all time lows; falling 81.34% or 1.643 to 0.377. Shares in Tigenix NV (NASDAQ:TIG) rose to all time highs; up 72.00% or 17.05 to 40.73. Shares in Kala Pharmaceuticals Inc (NASDAQ:KALA) fell to all time lows; falling 29.28% or 5.08 to 12.26.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 0.33% to 9.19.

Gold Futures for February delivery was down 0.02% or 0.20 to $1321.40 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in February fell 0.73% or 0.45 to hit $61.56 a barrel, while the March Brent oil contract fell 0.51% or 0.35 to trade at $67.72 a barrel.

EUR/USD was down 0.25% to 1.2037, while USD/JPY rose 0.29% to 113.08.

The US Dollar Index Futures was up 0.13% at 91.72.

See also:

Forex

The dollar turned positive against a basket of major currencies shrugging off weaker-than-expected payrolls data but gains were capped by a surge in the Canadian dollar amid bullish employment data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.13% to 91.71.

The dollar held gains despite falling expectations for a more rapid pace of US rate hikes after the economy created fewer jobs than expected.

The Labor Departed reported the US economy created just 148,000 jobs in December, below the 190,000 jobs expected by economists, while wage growth, was in line with expectations, rising 0.3%.

The subdued jobs report reduced investor expectations for a more aggressive path to higher interest rates, said TD Securities, as the Federal Reserve would likely need to see more “convincing evidence" of inflationary pressures prior to raising rates in March.

Other market participants, however, downplayed the impact of the report. Pantheon chief economists Ian Shepherdson left his rate hike expectations unchanged and expects a hike in March followed by further rate hikes at the end of each quarter this year. Shepherdson noted that the three-month moving average payroll is 203,000, which is “more than enough" to keep the labor market tightening.

A sharp uptick in the Canadian dollar weighed on upside momentum in the greenback amid a bullish labor market report which added to growing expectations that the Bank of Canada may raise its bench rate at its upcoming meeting later in January.

USD/CAD fell 0.69% to C$1.2403.

The euro pared recent gains against the greenback but steadied at a three-year high, while GBP/USD tacked on 0.11% to $1.3563.

USD/JPY gained 0.40% to Y113.21.

Commitments of Traders

Euro net longs are at an all-time hgh; S&P 500 net longs are at a 4-month high. Bullishness increased for gold, silver and copper.

Note: This data is for the week ending on Tuesday 02 January so the last three days of trading are not reflected.

cot.2018.jan.05

Gold

Gold prices traded flat shrugging off the prospect of global monetary policy tightening, while a subdued US jobs data limited losses.

Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $0.20, or 0.02%, to $1,321.80 a troy ounce.

The Labor Departed reported the US economy created just 148,000 jobs in December, below the 190,000 jobs expected by economists, while wage growth, was in line with expectations, rising 0.3%.

The subdued jobs report reduced investor expectations for a more aggressive path to higher interest rates, said TD Securities, as the Federal Reserve would likely need to see more “convincing evidence" of inflationary pressures prior to raising rates in March.

Jim Vogel, strategist at FTN , however, said that the jobs report does little to change the Federal Reserve’s trajectory for rate increases in 2018, as the trend of job creation remained solid after the economy created more than 200,000 jobs in November and October.

Gold prices have remained steady in recent weeks despite investor expectations for tightening global monetary as both the Bank of England and Bank of Canada are expected to follow the Fed's lead and raise rates this year.

The Bank of Canada could raise rates as soon as the end of the January, CIBC’s Nick Exarhos said, as Friday’s bullish labor market report strengthened the central bank’s case to raise rates.

Nomura’s George Buckley - who correctly predicted that the Bank of England would hike interest rates in November - said recently that there is room for more rate hikes, estimating the central would raise rates four times by the end of 2019 to curb inflation, which is running well above target.

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.

In other precious metal trade, silver futures fell 0.06% to $17.28 a troy ounce, while platinum futures gained 0.49% to $975. Platinum futures have made a bold start to the year on fears that rising demand for the autocatalyst metal would further tighten supplies.

Copper fell 0.98% to 3.23, while natural gas fell 3.33% to $2.78. The fall in natural gas comes amid data Thursday showing natural gas storage fell by 206 billion cubic feet, missing expectations for a draw of 219.43 billion cubic feet.

Oil

Oil had its strongest opening week for any year since 2013 as refiners and exporters whittled away at crude inventories tucked away in U.S. storage tanks.

Futures rose 1.7 percent this week in New York. The pull on oil stockpiles in the world’s biggest economy accelerated to 7.42 million barrels last week, a level last seen in early August. U.S. inventories are shrinking at a time when OPEC and allies producers including Russia are working to trim a global glut that triggered the 2014 market crash.

“We have supportive elements in the market that didn’t exist before," said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. With supplies declining and a healthy global economy, “all the pieces are in place."

Oil in New York has reached a level where profits are high enough to encourage a further expansion in U.S. drilling, compounding speculation that Organization of Petroleum Exporting Countries’ effort to tame the oversupply may prove self-defeating.

West Texas Intermediate crude for February delivery fell 57 cents to settle at $61.44 a barrel on the New York Mercantile Exchange. The contract’s Thursday settlement at $62.01 was the highest close since December 2014.

See also: Saudi Aramco Cuts Oil Pricing to U.S. Amid Record-Low Supply

Brent for March settlement lost 45 cents to close at $67.62 on the London-based ICE Futures Europe exchange.

U.S. oil output rose to 9.78 million barrels a day last week, near a record high, according to the Energy Information Administration. Gasoline inventories jumped by 4.81 million barrels and distillates increased by 8.9 million. Ric Spooner, a Sydney-based analyst at CMC Markets, said:

“There’s been a one-way, very steep and uninterrupted rally off the last minor low in mid-December near $56, so it won’t be surprising to see a pause here. Prices are getting into shale oil country and the market may wait for evidence as to whether producers are increasing output or not."’

Oil-market news:

  • Supplies at Cushing, Oklahoma, the delivery point for WTI, fell to the lowest since February 2015.
  • While WTI has surged, further gains may waver near $62.50 a barrel, just as they did in May and June of 2015, according to Spooner at CMC Markets. Technical guides are also showing the potential for a retreat with relative strength index indicating futures are likely overbought.
  • CME Group Inc. (NASDAQ:CME) cut the margin requirement for the WTI front-month contract to $1,950 from $2,100, according to its website.

Natural Gas (Thursday Report)

U.S. natural gas futures turned around and registered losses in North American trade on Thursday, after data showed that natural gas supplies in storage in the U.S. declined less than expected last week.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 206 billion cubic feet in the week ended December 29, while analysts had forecast a decline of 221 billion.

After the release, natural gas for delivery in February on the New York Mercantile Exchange fell 0.3 cents, or about 0.10%, to trade at $3.003 per million British thermal units by 10:32AM ET (14:32GMT).

Futures had been rising by 2.4 cents, or about 0.8%, at $3.032 prior to the release of the supply data.

That compared with a draw of 112 billion cubic feet (bcf) in the preceding week and represented a decline of 192 billion from a year earlier and was also 192 bcf below the five-year average.

Total U.S. natural gas storage stood at 3.126 trillion cubic feet, 5.8% lower than levels at this time a year ago and also 5.8% below the five-year average for this time of year.

Natural gas started off the year above the $3.00 mark this week where it has remained despite some profit-taking in the last few of days.

A wave of freezing weather hitting the eastern United States has spiked demand as cold weather entices customers to turn up their thermostats. In fact, Bloomberg data showed that the U.S. burned record levels of natural gas just as temperatures hit all-time lows on New Year’s Day.

Adding to the supply side of the bullish equation, the severe cold is actually cutting production as water vapor in pipeline systems freezes and thus hinders the flow of gas.

However, observers remark that these shutdowns are temporary and that the bigger picture in natural gas prices reflects the belief that the solid growth in output that began in the second half of 2017 will continue, limiting the possibility of supply shortages.

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