Investing.com Weekly Wrap-Up 29 August 2014

U.S. stocks gain on upbeat consumer sentiment number; Dow up 0.11%

by Investing.com Staff, Investing.com

U.S. stocks dismissed escalating tensions in Ukraine and rose on Friday on the coattails of a better-than-expected consumer sentiment report.

At the close of U.S. trading, the Dow 30 rose 0.11%, the S&P 500index rose 0.33%, while the NASDAQ Composite index rose 0.50%.

The Volatility S&P 500 index, which measures the outlook for market volatility, was down 0.58% at 11.98.

The Thomson Reuters/University of Michigan revised consumer sentiment index came in at 82.5 this month, up from a preliminary reading of 79.2 and exceeding expectations for a reading of 80.1.

July’s final reading came in at 81.8, and the uptick in the final August reading bolstered stock prices by keeping expectations firm that the Federal Reserve will close stimulus programs around October and hike interest rates some time in 2015.

Separately, data revealed that the Chicago-area purchasing managers’ index rose to 64.3 in August from 52.6 in July, beating expectations for an increase to 56.0.

On a less positive note, the Bureau of Economic Analysis reported that U.S. personal spending fell 0.1% last month, confounding expectations for a 0.2% rise, after an increase of 0.4% in June, though Wall Street took the data in stride.

On Thursday, the Commerce Department reported that U.S. economy grew at a revised annualized rate of 4.2%, up from a preliminary estimate of 4.0% and better than market forecasts for a downward revision to 3.9%.

Geopolitical issues dampened spirits on Wall Street at times albeit slightly.

Reports that Russian troops have entered Ukraine to assist pro-Moscow separatists have rattled nerves due to concerns that the conflict will dampen the global economy-especially if Russia sees fresh sanctions-and drag on U.S. recovery as a consequence.

Leading Dow Jones Industrial Average performers included Microsoft Corporation (NASDAQ:MSFT), up 1.18%, Home Depot Inc (NYSE:HD), up 1.09%, and Verizon Communications Inc (NYSE:VZ), up 0.83%.

The Dow Jones Industrial Average’s worst performers included United Technologies Corporation (NYSE:UTX), down 1.02%, Visa Inc (NYSE:V), down 0.92%, and Wal-Mart Stores Inc (NYSE:WMT), down 0.49%.

European indices, meanwhile, ended the day higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.02%, France’s CAC 40 rose 0.34%, while Germany’s DAX rose 0.08%. Meanwhile, in the U.K. the FTSE 100 rose 0.20%.

Forex

he dollar traded largely higher against most major currencies on Friday after data revealed consumers in the U.S. are growing more confident, though fears the Ukraine crisis could escalate dampened the greenback’s advance at times.

In U.S. trading on Friday, EUR/USD was down 0.32% at 1.3139.

Meanwhile in Europe, preliminary data showed that euro zone consumer price index ticked down to an annualized rate of 0.3% this month from 0.4% in July, in line with expectations.

Core consumer price inflation, which excludes food, energy, alcohol, and tobacco, rose to 0.9% in August compared to a year earlier, from 0.8% in July.

Data also showed that the euro zone’s unemployment rate remained unchanged at 11.5% last month.

Earlier Friday, official data showed that German retail sales declined 1.4% in July, disappointing expectations for a 0.1% rise, after a revised 1.0% gain in June.

Geopolitical issues softened the dollar albeit slightly.

The dollar was up against the yen, with USD/JPY up 0.31% at 104.05, and up against the Swiss franc, with USD/CHF up 0.31% at 0.9180.

The greenback was down against the pound, with GBP/USD up 0.08% at 1.6600.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.10% at 1.0872, AUD/USD down 0.17% at 0.9340 and NZD/USD down 0.26% at 0.8360.

The loonie saw some support of its own after Statistics Canada said the country’s gross domestic product expanded by 0.3% in June, in line with expectations. Year-on-year, Canada’s economy grew by 3.1% in June, beating expectations for a 2.7% expansion

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% at 82.74.

Commitments of Traders data from the CFTC (Commodity Future Trading Commission) – Bearish sentiment increased for the euro and Japanese yen. Bullishness surged for the Mexican peso. The sentiment for all other currencies tracked were little changed from a week ago. All sentiment is relative to the U.S. dollar.

Gold

Escalating tensions in eastern Ukraine partially offset a fresh batch of upbeat U.S. economic indicators on Friday and brought gold prices off earlier lows.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,287.90 a troy ounce during U.S. trading, down 0.19%, up from a session low of $1,284.40 and off a high of $1,292.30.

The December contract settled up 0.55% at $1,283.00 on Thursday.

Futures were likely to find support at $1,273.40 a troy ounce, the low from Aug. 21, and resistance at $1,297.60, Thursday’s high.

Upbeat U.S. data pushed gold prices down on Friday.

Friday’s overall positive economic data coupled with upbeat reports from earlier this week reminded markets that the days of ultra-loose U.S. monetary policy that have supported gold for years are coming to a close.

Geopolitical issues cushioned gold’s losses.

Meanwhile, silver for December delivery was down 0.44% at $19.523 a troy ounce, while copper futures for December delivery were up 0.49% at $3.166 a pound.

Oil

Escalating tensions in eastern Ukraine sent oil prices rising on Friday, while upbeat U.S. consumer sentiment data boosted the commodity as well.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in October traded up 1.48% at $95.95 a barrel during U.S. trading. New York-traded oil futures hit a session low of $94.49 a barrel and a high of $95.99 a barrel.

The October contract settled up 0.71% at $94.55 a barrel on Thursday.

Nymex oil futures were likely to find support at $92.50 a barrel, Thursday’s low, and resistance at $98.45 a barrel, the high from Aug. 8.

Oil prices were up for a third consecutive session Friday on reports that Russian troops have entered Ukraine to assist pro-Moscow separatists, which sparked concerns that fresh sanctions could be slapped on Russia’s energy sector.

Upbeat U.S. data supported oil as well on Friday, though the commodity was still set to post a monthly loss due to sentiments that despite improvements taking place in the U.S. economy, the global economy is awash in crude.

Meanwhile in oil-rich Canada, the country’s gross domestic product expanded by 0.3% in June, in line with expectations. Year-on-year, Canada’s economy grew by 3.1% in June, beating expectations for a 2.7% expansion.

Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were up 0.73% at US$103.21 a barrel, while the spread between Brent oil and U.S. crude contracts stood at US$7.26 a barrel.

Natural Gas

Natural gas prices edged higher on Friday as updated weather-forecasting models called for warm temperatures for a good portion of the U.S. in the coming week, which should maintain demand for air conditioning.

On the New York Mercantile Exchange, natural gas futures for delivery in October were up 0.28% at $4.056 per million British thermal units during U.S. trading. The commodity hit a session low of $4.012, and a high of $4.067.

The October contract settled up 1.02% on Thursday to end at $4.044 per million British thermal units.

Natural gas futures were likely to find support at $3.932 per million British thermal units, Wednesday’s low, and resistance at $4.101, Thursday’s high.

Weather-forecasting models have called for above-normal temperatures to settle over the eastern U.S., though intensity of the forecasts has fluctuated at times.

By Friday ahead of a holiday weekend in the U.S., investors edged the commodity up betting that while a strong heat wave is unlikely next week or after, neither are large early September cool snaps despite falling temperatures here and there.

“As we were expecting, weather patterns have been more favorable recently, which have eased bearish headwinds. But the end of summer is upon us, and there is nothing in the weather data that suggests there will be a last gasp of intense summer heat,” Natgasweather.com reported in its Friday mid-day update.

“There will still be times where 80s to near 90F pushes into northern U.S., such as into the Midwest and Northeast, but cooler Canadian weather systems will not make It easy for any significant heat to set up for any length of time. We still expect a much more comfortable pattern to play out going into the second week of September, which will begin a string of much larger weekly builds.”

On Thursday, the U.S. Energy Information Administration reported that inventories rose 75 billion cubic feet to 2.63 trillion in the week ending Aug. 22, missing market calls for a build of 78 billion, which gave the commodity some support on Friday.