Written by Investing.com Staff, Investing.com
Stocks – Market Ends Lower as Energy Stocks Sink
Stocks on Wall Street ended lower as another tumble in oil prices weighed on energy stocks.
The Dow fell 0.73%, while the broader S&P 500 index lost 0.66%. The tech-heavy Nasdaq composite was down 0.48%.
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Crude oil prices fell more than 6% as concerns persisted about a supply glut. Dow components Exxon Mobil (NYSE:XOM) fell 2.7% and Chevron (NYSE:CVX) slumped 3.3%.
The energy sector has lost 16.5% since the beginning of October, making it the worst performing S&P sector during the period and putting it on pace for its biggest two-month drop since September 2011. Neil Massa, senior equity trader at Manulife Asset Management in Boston, said:
“If we get clarity on any of these – oil prices, trade war with China and the Federal Reserve’s rate of monetary policy tightening – we could go a long way towards making investors comfortable in investing in the market.”
Meanwhile, retail stocks were in focus with Black Friday sales underway. Discounts will continue through to Cyber Monday as investors will look to see if the companies can overcome an underwhelming retail earnings season.
Walmart (NYSE:WMT) was up more than 1%, but Amazon.com (NASDAQ:AMZN) dropped 1%.
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Mexico stocks lower at close of trade; S&P/BMV IPC down 0.41%
Canada stocks lower at close of trade; S&P/TSX Composite down 0.66%
After Hours Gainers / Losers (Seeking Alpha)
The dollar was set to record a weekly gain against its rivals Friday on the back of a sharp downtick in the euro with signs of weaker eurozone economic growth.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.25% to 96.82.
Business growth in the eurozone slowed this month, as a slowing global economy and an ongoing United States-led trade war weighed, a survey showed on Friday.
Sentiment on eurozone growth was further soiled by data showing German private-sector growth slowed to its lowest level in nearly four years, pressuring the euro sharply lower as the single currency remained on track to end the week lower.
The disappointing batch of data from the bloc will likely fuel concerns from European Central Bank policymakers, who are expected wind down their €2.6 trillion asset purchase program at the end of the year.
EUR/USD fell 0.60% to $1.1335.
GBP/USD fell 0.51% to $1.2811 ahead of last-ditch talks between UK Prime Minister Theresa May and lawmakers in Brussels including President Jean Claude Junker on Saturday as both sides attempt to finalize a Brexit deal.
USD/CAD rose 0.14% to C$1.3210 after a plunge in oil prices to a more than a one-year low offset gains in the loonie, which had followed upbeat Canada inflation data.
USD/JPY fell 0.09% to Y112.86 as the selloff on Wall Street drew support for safe-haven yen, limiting gains in the pair.
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Gold is continuing its delicate dance in the $1,200 territory as an immediate lack of major directional events, barring next week’s Fed diary, keeps bullion fans within their comfort zone.
A stronger dollar post-Thanksgiving led to light selling pressure in the yellow metal, with many traders still away from their desks during the abbreviated session after Thursday’s break.
The dollar index, a contrarian bet to gold, was up 0.2% by 12:58 PM ET (17:58 GMT). George Gero, precious metals analyst at RBC Wealth Management in New York, said:
“We have a short week, a short day today and more shorts in the market. But we have (Fed Chief Jerome) Powell next week, and that could provide some big direction for gold.”
Powell is due to speak on Wednesday about “The Federal Reserve’s Framework for Monitoring Financial Stability” at the New York Economic Club. The central bank will also be issuing minutes of its Nov. 7-8 meeting later that day.
The Federal Reserve is widely expected to raise U.S. interest rates for a fourth time this year at its December meeting and both events on Wednesday are expected to be scrutinized closely by investors for cues on gold market direction.
COMEX gold futures for December delivery was down $4.70, or 0.4%, at $1,223.30 per troy ounce, after a session high at $1,220.70.
Among other precious metals on COMEX, silver fell 1.8% to $14.49 per ounce.
Palladium tumbled 2.4 % to $1,106.40 per ounce, while sister metal platinum fell 0.7% to $844.60.
In base metals, COMEX copper fell 1.2% to $2.76 per pound.
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The bull trap was set even before the turkey was laid out.
The thin post-Thanksgiving holiday volume provided the perfect market condition for oil bears to lure in longs and hammer prices down 8% after the dead-cat bounce of 2% Wednesday. Oil bears also came precariously close on Friday to their long-time target: breaking the $50 support for West Texas Intermediate. They could achieve that as early as next week, barring a flip in sentiment. The $60 support for Brent, meanwhile, was shattered.
WTI Poised For Biggest Monthly Loss Since 2008
U.S. WTI settled down $4.21, or 7.7%, at $50.42 per barrel after hitting a 13-month low of $50.16, just cents away from breaking the $50 support.
WTI settled up 2.2% on Wednesday despite data showing a ninth-weekly (and outsized) build in U.S. crude stockpiles, giving some traders the sense that a bull trap was being set. But it has now lost 35% from a four-year high of nearly $77 hit in October and is poised to end November down 23%, the biggest monthly loss since October 2008.
U.K. Brent, the global benchmark for oil, fell $3.38, or 5.4%, to $59.22 per barrel by 2:24 PM ET (19:24 GMT), breaking below its $60 support the first time since July 2017. Brent rose 1.2% on Wednesday. But it is now down 32% from a four-year high of nearly $87 reached in October.
Helping the sinking sentiment, of course, was the notion that President Donald Trump would successfully prevent OPEC from slashing production when the cartel meets in Vienna on Dec. 6, by using his “no-sanctions trump card” for Saudi Arabia, which has admitted a premeditated murder of journalist Jamal Khashoggi, but denies any involvement by Crown Prince Mohammed bin Salman. Scott Shelton, energy broker at ICAP (LON:NXGN) in Durham, N.C., said:
“The Saudi’s are talking with a much softer tone on oil prices and adding to the theory that the U.S. has been able to strike a deal to be lenient on them after the Khashoggi killing if they agree to keep prices lower. I must admit that I thought that this concept was just plain silly, and more likely to be in an episode of ‘Homeland’ on Showtime, but the concept continues to gain strength in the market as the market apparently requires a large cut in production.”
On Wednesday Trump tweeted: “Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!”
Reuters oil markets’ columnist John Kemp said the Saudis and OPEC seem to have pushed into a corner by the president to do his bidding. Kemp wrote in a commentary on Thursday:
“Trump has in effect agreed to overlook the killing of journalist Jamal Khashoggi in return for Saudi Arabia’s help to contain oil prices and for its assistance in other areas. The United States and Britain have seized on the vulnerability of the kingdom and its de facto ruler Crown Prince Mohamed bin Salman to push harder for a partial ceasefire in Yemen and improve relations with Qatar. The kingdom will also come under heightened pressure to deliver on promises of increased arms purchases and overseas investment as well as reconstruction aid in Yemen.”
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Natural Gas (FXEmpire)
Natural gas markets continue to be very volatile, after seeing so much in the way of gains over the last couple of weeks. We are going to finish the week with a less than impressive bullish tone, and I think it’s only a matter of time before we see this market completely rollover. This is because the five dollars level above looks to be massive resistance, and it of course will have a certain amount of psychological importance to it as well. This is a market that has gotten way ahead of itself, and although the winter looks to be colder in the United States than originally thought, the reality is that given enough time the drillers will refill supplies, so I suspect by the time we start to trade Spring contracts, this market will fall rather drastically.
In the meantime, I believe that we are going to see a bit of consolidation between the four dollars level on the bottom and the five dollars level on the time, so the candle stick for the week makes quite a bit of sense. The crude oil markets have collapsed, and that of course is bullish for natural gas as it should have traders looking for energy plays.
At this point, I feel much more comfortable shorting this market than buying it, simply because we have gotten far too ahead of itself. If we did break the five dollars level, that would be an extraordinarily bullish sign, but that’s not what I’m looking to see happen, and I believe that it is only a matter time before that level proves to be too much for the market to handle.
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