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posted on 02 February 2018

Investing.com Weekly Wrap Up 02February 2018

Written by , Investing.com

U.S. stocks lower at close of trade; Dow Jones Industrial Average down 2.54%

U.S. stocks were lower after the close on Friday, as losses in the Oil & Gas, Technology and Basic Materials sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 2.54%, while the S&P 500 index lost 2.12%, and the NASDAQ Composite index lost 1.96%.


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The best performers of the session on the Dow Jones Industrial Average were PfizerInc (NYSE:PFE), which fell 0.60% or 0.22 points to trade at 36.61 at the close. Meanwhile, Nike Inc (NYSE:NKE) fell 0.64% or 0.43 points to end at 67.22 and Wal-Mart Stores Inc (NYSE:WMT) was down 0.99% or 1.04 points to 104.48 in late trade.

The worst performers of the session were Chevron Corporation (NYSE:CVX), which fell 5.57% or 6.99 points to trade at 118.58 at the close. Exxon Mobil Corporation (NYSE:XOM) declined 5.10% or 4.54 points to end at 84.53 and Goldman Sachs Group Inc (NYSE:GS) was down 4.48% or 12.19 points to 260.04.

The top performers on the S&P 500 were Mattel Inc (NASDAQ:MAT) which rose 7.90% to 16.53, Motorola Solutions Inc (NYSE:MSI) which was up 4.79% to settle at 103.87 and Charter Communications Inc (NASDAQ:CHTR) which gained 4.33% to close at 387.25.

The worst performers were Freeport-McMoran Copper & Gold Inc (NYSE:FCX) which was down 7.61% to 17.97 in late trade, Fortune Brands Home & Security Inc (NYSE:FBHS) which lost 7.05% to settle at 64.90 and Clorox Company (NYSE:CLX) which was down 6.71% to 130.91 at the close.

The top performers on the NASDAQ Composite were Akers Biosciences Inc (NASDAQ:AKER) which rose 37.12% to 0.495, Actua Corp (NASDAQ:ACTA) which was up 28.79% to settle at 0.85 and USA Truck Inc (NASDAQ:USAK) which gained 24.45% to close at 24.99.

The worst performers were Cenveo Inc (NASDAQ:CVO) which was down 66.50% to 0.472 in late trade, Impinj Inc (NASDAQ:PI) which lost 46.81% to settle at 12.16 and Aceto Corporation (NASDAQ:ACET) which was down 27.41% to 7.92 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2839 to 342 and 49 ended unchanged; on the Nasdaq Stock Exchange, 2130 fell and 420 advanced, while 109 ended unchanged.

Shares in Motorola Solutions Inc (NYSE:MSI) rose to 5-year highs; rising 4.79% or 4.75 to 103.87. Shares in Cenveo Inc (NASDAQ:CVO) fell to all time lows; losing 66.50% or 0.938 to 0.472. Shares in Actua Corp (NASDAQ:ACTA) rose to all time lows; gaining 28.79% or 0.19 to 0.85. Shares in Impinj Inc (NASDAQ:PI) fell to all time lows; falling 46.81% or 10.70 to 12.16. Shares in USA Truck Inc (NASDAQ:USAK) rose to 52-week highs; rising 24.45% or 4.91 to 24.99. Shares in Aceto Corporation (NASDAQ:ACET) fell to 5-year lows; down 27.41% or 2.99 to 7.92.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 27.39% to 17.16 a new 52-week high.

Gold Futures for April delivery was down 1.05% or 14.20 to $1333.70 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March fell 1.09% or 0.72 to hit $65.08 a barrel, while the April Brent oil contract fell 1.51% or 1.05 to trade at $68.60 a barrel.

EUR/USD was down 0.45% to 1.2458, while USD/JPY rose 0.69% to 110.17.

The US Dollar Index Futures was up 0.62% at 89.03.

See also:

Forex

The dollar rose sharply against a basket of major currencies buoyed by a bullish US jobs reported which stoked investor expectations for a faster pace of monetary policy tightening.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.66% to 88.65.

The Labor Department said Friday, U.S. non-farm payrolls rose by 200,000 jobs in January. That beat economists’ forecasts for 184,000 new jobs. While unemployed remained at unchanged on the prior month at 4.1%.

Wage growth, met expectations rising 0.3%, while wage growth in the previous month was revised upward to 0.3.

The Federal Reserve has remarked on numerous occasions its expectation that tighter labor markets would spur wage growth, leading to a faster pace of inflation. Analysts on Friday echoed the Fed’s sentiment on tighter labor markets boosting inflation, as they revised upward their forecast for both inflation and the number of rate hikes for the year.

BNP Paribas revised upward its assessment of core PCE inflation, the Fed’s preferred measure of inflation, to 2.2% from 2.0% previously, and said it expects the Fed to raise rates four times in 2018 compared to the prior estimate of just three hikes.

The dollar’s sharp rise weighed on the pound and euro - both currencies have made significant gains against the greenback in recent weeks amid investor expectations that the Bank of England and European Central Bank are poised to adopt tighter monetary policy measures.

GBP/USD fell 0.50%to $1.4132, while EUR/USD fell 0.77% $1.4158.

USD/JPY rose 0.90% Y110.39, while USD/CAD gained 0.99% to $1.2386.

Commitments of Traders

Crude oil and euro net longs are at all-time highs; Speculators are more bullish on the Canadian dollar and the Mexican peso.

Note: The data is for the week ending on Tuesday 30 January so the last three days of trading are not reflected.

cot.2018.jan.30

Gold

Gold prices fell sharply amid dollar strength following a jobs report showing the US economy created more jobs than expected in January, while signs of wage growth lifted investor expectations for a faster pace of rate hikes.

Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $9.80, or 0.73%, to $1,337.80 a troy ounce.

The Labor Department said Friday, U.S. non-farm payrolls rose by 200,000 jobs in January. That beat economists’ forecasts for 184,000 new jobs. While unemployed remained at unchanged on the prior month at 4.1%.

Wage growth met expectations rising 0.3%, and was revised upward to 0.3% for December.

Signs of faster wage growth will be welcomed by the Federal Reserve as it has long held the belief that tighter labor markets would spur wage growth, leading to a faster pace of inflation. Analysts on Friday appeared to endorse Fed’s stance on tighter labor markets boosting inflation, as they revised upward their forecast for both inflation and the number of rate hikes for the year.

BNP Paribas revised upward its assessment of core PCE inflation, the Fed’s preferred measure of inflation, to 2.2% from 2.0% previously, and said it expects the Fed to raise rates four times in 2018 compared to the prior estimate of just three hikes.

The upbeat jobs report appeared to sway some of the more dovish Fed members as Neil Kaskahi, in a CNBC interview, said ongoing wage growth may impact interest rates.

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 2.48% to $16.73 a troy ounce, while platinum futures fell 0.85% to $999.20.

Copper fell 0.65% to $3.19, while natural gas rose 0.25% to $2.86.

Oil

Crude oil prices settled lower as data pointing to signs of rising output weighed on sentiment while a rebound in the dollar added to downside momentum.

On the New York Mercantile Exchange crude futures for March delivery fell 35 cents to settle at $65.45 a barrel, while on London's Intercontinental Exchange, Brent lost 1.65% to trade at $68.50 a barrel.

The number of oil rigs operating in the US rose by six to 765, the highest level since Aug. 11, according to data from energy services firm Baker Hughes. That added to ongoing fears that rising output may weigh on oil prices as US output reached 10 million barrels per day last week, according to data from the Energy Information Administration.

Also adding to pressure on oil prices was dollar strength on nonfarm payrolls data showing wage growth improved, fueling expectation for a faster pace of rate hikes then is currently priced in with some analysts expecting the Federal Reserve’s “dot plots," to show four rate increases for this year rather than the current three rate hikes.

The weekly slump in oil comes a day after Goldman Sachs revised upward its three-, six- and twelve-month Brent oil price forecasts to $75, $82.50 and $75 a barrel respectively, from $62 previously, amid expectations for a speedy rebalance in oil markets.

The bank said it expects Brent-WTI differential for the second half of 2018 to 2019 to widen to $5.50 a barrel, citing risks of further widening this year. This, in turn, could reaffirm demand for crude oil exports, leading to tighter oil inventories.

The price difference between international benchmark Brent crude and U.S. crude narrowed to from roughly $7 in December to about $4 a barrel in January.

Natural Gas (Thursday Report)

Natural gas futures declined on Thursday, falling to the lowest levels of the session after data showed that domestic supplies in storage fell less than forecast last week.

Front-month U.S. natural gas futures sank 14.2 cents, or around 4.7%, to $2.853 per million British thermal units (btu) by 10:32AM ET (1532GMT), the weakest level since Jan. 9. Futures were at around $2.888 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. fell by 99 billion cubic feet (bcf) in the week ended Jan. 26, below forecasts for a withdrawal of 104 bcf.

That compared with a decline of 288 bcf in the preceding week, a fall of 87 bcf a year earlier and a five-year average drop of 160 bcf.

Total natural gas in storage currently stands at 2.197 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 526 bcf, or around 19.3%, lower than levels at this time a year ago and 425 bcf, or roughly 16.2%, below the five-year average for this time of year.

U.S. gas futures sank 6.3% on Wednesday, after updated weather forecasting models showed that temperatures won't be as cold as previously expected through both the upcoming six- to 10-day and eight- to 14-day periods.

Bearish speculators are betting that the mild weather will reduce winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

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