Written by Investing.com Staff, Investing.com
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 2.24%
U.S. stocks were lower after the close on Friday, as losses in the Technology, Consumer Services and Basic Materials sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average fell 2.24%, while the S&P 500 index lost 2.33%, and the NASDAQ Composite index lost 3.05%.
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The best performers of the session on the Dow Jones Industrial Average were Johnson & Johnson (NYSE:JNJ), which fell 0.33% or 0.48 points to trade at 145.43 at the close. Meanwhile, Chevron Corp (NYSE:CVX) fell 0.36% or 0.42 points to end at 115.49 and Coca-Cola Company (NYSE:KO) was down 0.59% or 0.29 points to 49.09 in late trade.
The worst performers of the session were Intel Corporation (NASDAQ:INTC), which fell 4.40% or 2.13 points to trade at 46.24 at the close. Cisco Systems Inc (NASDAQ:CSCO) declined 4.03% or 1.95 points to end at 46.44 and Microsoft Corporation (NASDAQ:MSFT) was down 4.00% or 4.37 points to 104.82.
The top performers on the S&P 500 were PPL Corporation (NYSE:PPL) which rose 2.81% to 31.09, EQT Corporation (NYSE:EQT) which was up 2.33% to settle at 18.41 and Newmont Mining Corporation (NYSE:NEM) which gained 2.24% to close at 33.39.
The worst performers were Ulta Beauty Inc (NASDAQ:ULTA) which was down 13.13% to 254.47 in late trade, Cooper Companies Inc (NYSE:COO) which lost 12.28% to settle at 243.01 and American Airlines Group (NASDAQ:AAL) which was down 9.12% to 33.57 at the close.
The top performers on the NASDAQ Composite were Domo Inc (NASDAQ:DOMO) which rose 30.52% to 20.40, Uxin Ltd (NASDAQ:UXIN) which was up 24.47% to settle at 4.68 and Cronos Group Inc (NASDAQ:CRON) which gained 21.72% to close at 12.7200.
The worst performers were Viveve Medical Inc (NASDAQ:VIVE) which was down 27.42% to 1.3500 in late trade, United Natural Foods Inc (NASDAQ:UNFI) which lost 24.58% to settle at 14.88 and Akorn Inc (NASDAQ:AKRX) which was down 23.79% to 4.26 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2094 to 956 and 101 ended unchanged; on the Nasdaq Stock Exchange, 1919 fell and 723 advanced, while 85 ended unchanged.
Shares in Viveve Medical Inc (NASDAQ:VIVE) fell to 3-years lows; down 27.42% or 0.5100 to 1.3500. Shares in United Natural Foods Inc (NASDAQ:UNFI) fell to 5-year lows; losing 24.58% or 4.85 to 14.88. Shares in Akorn Inc (NASDAQ:AKRX) fell to 5-year lows; losing 23.79% or 1.33 to 4.26.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 9.63% to 23.23 a new 1-month high.
Gold Futures for February delivery was up 0.82% or 10.15 to $1253.75 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January rose 1.63% or 0.84 to hit $52.33 a barrel, while the February Brent oil contract rose 2.28% or 1.37 to trade at $61.43 a barrel.
EUR/USD was up 0.25% to 1.1406, while USD/JPY unchanged 0.00% to 112.68.
The US Dollar Index Futures was down 0.18% at 96.585.
See also:
Mexico stocks lower at close of trade; S&P/BMV IPC down 0.34%
Canada stocks lower at close of trade; S&P/TSX Composite down 0.86%
Stocks could be set up for another violent week of selling (CNBC)
The U.S. dollar was subdued against its rivals Friday as the downbeat jobs report did little to dent expectations the Federal Reserve may rein in rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.15% to 96.62.
Nonfarm payrolls grew by 155,000 for the November, down from 237,000 in October. That missed economists’ forecast of 200,000.
The jobless rate was unchanged at 3.7%, while average hourly earnings grew 0.2%, lower than expectations for 0.3% increase.
Analysts, however, continued to tout a healthy backdrop for the labor market, blaming the weaker jobs report on the recent Hurricanes, which hurt labor demand in the housing sector. Pantheon Macroeconomics said in a note to clients:
“Overall, we see little evidence that labor demand is weakening. We think (labor) activity has been hit by the hurricanes and will rebound in the next couple of months.”
Still, the greenback struggled to advance as expectations the Fed may pause on rate hikes continued to weigh. The Wall Street Journal reported Fed officials are considering whether to signal a wait-and-see attitude after a likely rate increase at their meeting in December.
EUR/USD rose 0.25% to $1.1405, while GBP/USD fell 0.42% to $1.2732.
USD/JPY rose 0.04% as safe-haven demand supported a bid in the yen, keeping a lid on gains in the pair.
USD/CAD fell 0.61% to C$1.3302 as strong jobs data from Canada drew a bid in the loonie, though gains could be limited by dwindling expectations for a Bank of Canada rate hike.
TD Securities said. that cuts in the Canada’s energy sector outlook and slowing economic data into fourth quarter:
“have left a January Bank of Canada hike untenable. We look for hikes in March and July 2019, and we’re pushing our final hike out to January 2020.”
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The Federal Reserve had been looking a little dovish and the latest U.S. jobs numbers raised more doubts about rate hikes in 2019, taking gold to its highest prices since the summer.
Benchmark COMEX gold futures for February settled up $9, or 0.7%, at 1,252.60 per troy ounce after scaling a peak of $1,255.80, its highest since early July. For the week, the contract rose 2.2%, its best weekly advance since mid-August.
The yellow metal got its boost after a U.S. Labor Department report showed nonfarm payrolls increased by a less-than-expected 155,000 last month. The data was tepid enough to lower bets for faster future interest rate hikes without fanning fears of an economic slowdown.
The continuous slide on Wall Street, which fell more than 2% on Friday on renewed concerns over the China-U.S. trade situation added more safe-haven shine to gold, analysts said.
The dollar index, another contrarian trade to bullion, was down 0.2% to 96.54 by 3:32 PM ET (20:32 GMT).
The dollar has lost its upward momentum since the start of November on dovish signals from the Fed, which has indicated a possible pause in rate hikes after a widely-expected December increase.
Fawad Razaqzada, analyst for forex.com in London, said:
“The directional bias on the dollar has turned south as the initial speculation of three rate hikes in 2019 no longer holds. Investors are clearly worried about the possibility of an economic slowdown and, as such, have warmed to haven assets, including gold. Historically, low interest rates across developed economies had pushed investors into higher-yielding stock markets and away from government bonds. Now the reverse is happening, as central banks have started to normalize their monetary policies.”
Among other precious metals on COMEX, silver rose 1.5% to $14.72 per ounce.
Palladium jumped 2.5% to $1,170.50 per ounce, while sister metal platinum rose 0.6% to $794.60.
In base metals, COMEX copper gained by 0.3% to $2.75 per pound.
See also:
- Gold Stocks Acting As They Should During Market Stress (TalkMarkets)
Succeeding in a “most difficult” situation,” Saudi Arabia got its brethren within OPEC and non-member allies led by Russia to agree to a production cut of 1.2 million barrels per day that the market rewarded on Friday with the best weekly gain in 10 for oil.
At settlement, U.S. West Texas Intermediate crude was up $1.64, or 2.2%, at $52.61 per barrel. For the week, it gained 3.3%, the biggest advance since the week ended Sept. 23.
Brent, the global benchmark for crude, was up by $1.48, or 2.5%, at $61.54 by 2:55 PM ET (19:55 GMT), after racing to $63.70 earlier.
What wasn’t immediately clear was how Riyadh would deal with the resultant political fallout, if any, with President Donald Trump, who had been haranguing the kingdom for weeks now with tweets demanding that OPEC’s oil be kept flowing without disruption and at low prices to help the U.S. economy.
Many had expected the Saudis to play ball with the president, who had been protecting Riyadh from the threat of U.S. sanctions after the murder of the journalist Jamal Khashoggi, whom the CIA believes was killed at the urging of Saudi Crown Price Mohammed bin Salman. Saudi Energy Minister Khalid al-Falih received praise from his Russian counterpart Alexander Novak for being able “to find a solution in the most difficult situation“.
Trump hadn’t tweeted or issued any verbal response as yet on Friday to the OPEC decision, although he made a live but brief media appearance to announce his new picks for Attorney General and U.S. Ambassador to the United Nations. John Kilduff, partner at New York energy hedge fund Again Capital, said John Kilduff, partner at New York energy hedge fund Again Capital, said:
“I think he has other things on his mind and will probably tweet again depending on how much oil prices rally between now and the next few days on this production cut.”
WTI initially hit $54.22 after Iraqi Oil Minister Thamer Ghadhban announced an 800,000 bpd cut by OPEC and a 400,000 bpd reduction by the group’s allies over a six-month timeline. Cut exemptions were granted to OPEC’s most economically depressed members Venezuela and Libya, as well as Iran, which is facing U.S. sanctions on its oil exports.
Despite the rebound, WTI still remained some 30% lower than the four-year highs of nearly $77 per barrel hit in early October. Brent was off about 27% from similar peaks achieved two months back.
Analysts said any price rebound here on will not be straight-lined, but dependent on whether the producers in Friday’s deal do as pledged and not cheat by producing more. OPEC also interestingly didn’t make public any country quotas this time for production, although Russia pledged to reduce between 228,000 and 230,000 bpd.
Another major challenge to the market will be how U.S. crude output and exports — which are not part of any OPEC cuts — perform over the next six months.
The United States is already the world’s largest oil driller, with output that is expected to reach 12 million bpd in 2019, well above Saudi and Russia, the second- and third-largest producers, respectively, with production of just under 11 million barrels. The number of active U.S. rigs drilling for oil fell by 10 to 877 this week, data showed, but analysts said the number could jump again as prices rally.
U.S. crude exports hit a record 3.2 million barrels per day last week, just within two years of coming out from its self-imposed four-decade-old oil exports embargo. Weekly U.S. net imports of crude oil and petroleum products were at a negative 211,000 bpd last week, meaning that the U.S. was a net exporter of that amount.
See also:
- WTI Holds Near $50/bbl; Bounce May Very Well Be Bull Trap (DailyFx)
- U.S. oil drillers cut most rigs since May 2016: Baker Hughes (Reuters)
Natural Gas (FXEmpire)
Natural gas price moved higher on Friday, following Thursday’s drop in the wake of the EIA estimate of stockpiles. Demand in the US fell in the latest week by LNG exports continue to rise. China has now become the largest importer of natural gas, and a trade agreement would go a long way toward increasing US exports.
Technical Analysis
Natural gas prices moved higher on Friday, making a higher low and a higher high. Prices appear to be forming a bull flag pattern which his a pause that refreshes higher. Prices recaptured short term support which is the 10-day moving average near 4.46. Additional support is seen near an upward sloping trend line which comes in near 4.27. Resistance is seen near a downward sloping trend line that come in near 4.71. Short-term momentum has turned positive as fast stochastic generated a crossover buy signal.
Domestic Demand Dipped
Total U.S. consumption of natural gas fell by 1% compared with the previous report week, according to the EIA. Natural gas consumed for power generation climbed by 2% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 4%. Despite the cold front that moved through the country this week, the previous report week was also cold and actually had more population-weighted heating degree days. Natural gas exports to Mexico decreased 1%.
LNG Exports Rose
The EIA reports that LNG exports increase week over week. Eight LNG vessels with a combined LNG-carrying capacity of 27.9 Bcf departed the United States from November 29 to December 5, according to the EIA. A tanker waiting to load the first LNG produced from the new Corpus Christi liquefaction terminal in Texas has been berthed at the terminal since December 5, according to the EIA. U.S. LNG exports in November set a new record with 31 loaded cargoes exceeding the previous record set in July with 29 exported cargoes.
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