Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.15%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Utilities and Healthcare sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 0.15% to hit a new 3-months high, while the S&P 500 index added 0.46%, and the NASDAQ Composite index gained 0.59%.
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The best performers of the session on the Dow Jones Industrial Average wereChevron Corp (NYSE:CVX), which rose 1.30% or 1.62 points to trade at 126.42 at the close. Meanwhile, Walgreens Boots Alliance Inc (NASDAQ:WBA) added 1.00% or 0.54 points to end at 54.69 and Home Depot Inc (NYSE:HD) was up 0.80% or 1.61 points to 202.06 in late trade.
The worst performers of the session were Dow Inc (NYSE:DOW), which fell 4.14% or 2.47 points to trade at 57.24 at the close. Boeing Co (NYSE:BA) declined 0.99% or 3.93 points to end at 391.93 and Merck & Company Inc (NYSE:MRK) was down 0.86% or 0.70 points to 81.15.
The top performers on the S&P 500 were Apache Corporation (NYSE:APA) which rose 6.59% to 35.57, Chesapeake Energy Corporation (NYSE:CHK) which was up 6.23% to settle at 3.410 and EOG Resources Inc (NYSE:EOG) which gained 5.30% to close at 98.63.
The worst performers were Signet Jewelers Ltd (NYSE:SIG) which was down 5.12% to 26.85 in late trade, Dow Inc (NYSE:DOW) which lost 4.14% to settle at 57.24 and Capri Holdings Ltd (NYSE:CPRI) which was down 2.47% to 48.09 at the close.
The top performers on the NASDAQ Composite were Vital Thera (NASDAQ:VTL) which rose 145.82% to 0.51, Silver Run Acquisition Corporation II (NASDAQ:AMR) which was up 26.42% to settle at 0.28 and RumbleON Inc (NASDAQ:RMBL) which gained 21.74% to close at 5.60.
The worst performers were LivaNova PLC (NASDAQ:LIVN) which was down 27.88% to 69.69 in late trade, Duluth Holdings Inc (NASDAQ:DLTH) which lost 25.23% to settle at 17.60 and Syros Pharmaceuticals Inc (NASDAQ:SYRS) which was down 23.28% to 7.48 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2114 to 856 and 123 ended unchanged; on the Nasdaq Stock Exchange, 1802 rose and 828 declined, while 80 ended unchanged.
Shares in LivaNova PLC (NASDAQ:LIVN) fell to 52-week lows; down 27.88% or 26.94 to 69.69.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 5.60% to 12.82 a new 6-months low.
Gold Futures for June delivery was up 0.12% or 1.50 to $1295.80 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in May rose 1.88% or 1.17 to hit $63.27 a barrel, while the June Brent oil contract rose 1.46% or 1.01 to trade at $70.41 a barrel.
EUR/USD was up 0.08% to 1.1228, while USD/JPY rose 0.05% to 111.70.
The US Dollar Index Futures was up 0.08% at 96.998.
See also:
Canada stocks higher at close of trade; S&P/TSX Composite up 0.52%
U.K. stocks higher at close of trade; Investing.com United Kingdom 100 up 0.60%
S&P posts seven-day winning streak as jobs data allay economic fears (Reuters)
The greenback remained unchanged on Friday as wage inflation in the U.S. supported the Federal Reserve’s pause on interest rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.02% to 96.947 as of 10:07 AM ET (14:07 GMT).
Nonfarm payrolls rose more than expected, but average hourly earnings grew at a slower pace than anticipated, indicating that inflation pressure has decreased. The numbers support the Fed’s decision to extend its pause on hiking rates.
Meanwhile, trade talks were in focus, as the U.S. and China conceded that progress had been made. Still, the U.S. President Donald Trump declined to announce a trade summit with Chinese leader Xi Jinping, saying it would be at least four or more weeks until a trade deal was signed.
The dollar rose against the safe-haven yen, with USD/JPY gaining 0.04% to 111.68.
Elsewhere, sterling fell even as the U.K. has asked the European Union for yet another extension until June 39. The U.K. had originally been due to leave the EU on March 29, but the deadline was pushed back to April 12 to allow the U.K. parliament more time to approve the withdrawal agreement, which it has been unable to do.
GBP/USD slumped 0.4% to 1.3026.
Elsewhere, USD/CAD rose 0.2% to 1.3381 and EUR/USD inched up 0.04% to 1.1222.
See also:
It was a good U.S. jobs number, yes. But more importantly, will it prompt the Fed to rethink its patient stance on rate hikes?
Gold prices were little changed on Friday after resurgent U.S. nonfarm payrolls datathat showed employment leaping from a 17-month low as milder weather boosted activity in sectors like construction.
Spot gold, reflective of trades in bullion, was down 56 cents at $1,291.71 an ounce by 4:18 PM ET (20:18 GMT), after hitting a session low of just under $1,285.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled the official trading session up $1.30, or 0.1%, at $1,295.60 per ounce.
Stocks on Wall Street added to gains as fears of a sharp growth slowdown in the first quarter were allayed by the March job numbers. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose for a second-straight day.
For investors in gold though, it raised the question of whether it may just be another thing to tilt the Federal Reserve, accused by some of being too dovish of late, the other way. (President Trump said Friday he thinks rates should be cut.) Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas, said:
“196,000 jobs were created in March, which should increase an already strong consumer confidence figure.”
Palladium rose after a two-day slide to remain the world’s priciest metal.
Spot palladium was up $6.95, or 0.5%, at $1,372.40 an ounce. The silvery-white auto-catalyst metal, used for purifying gasoline emissions, traded some $300 above gold early last month before cutting that premium to about less than $100 lately.
Trades in other Comex metals as of 4:18 PM ET (20:18 GMT):
Palladium futures up $13.70, or 1%, at $1,346 per ounce.
Platinum futures up $1.60, or 0.2%, at $906.10 per ounce.
Silver futuresdown 1 cent, or 0.1%, at $15.07 per ounce.
Copper futures down 2 cents, or 0.7%, at $2.89 per pound.
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There may not be too much to worry about the U.S. economy with the resurgent jobs growth in March, but oil bulls will have to keep their sights on shale output to ensure it doesn’t unravel their “Up, Up and Away!” theme for crude prices.
London-traded Brent crude, the global benchmark for oil, once again breached the $70 per barrel mark on Friday which OPEC kingpin Saudi Arabia has set as its first price target from the production cuts carried out this year. Brent reached as high as $70.47 a barrel before settling 94 cents, or 1.4%, up at $70.34.
New York-traded West Texas Intermediate crude finished the official trading session up 98 cents, or 1.6%, to $63.11 per barrel.
The price boost came as U.S. nonfarm payrolls data showed a surge in job creation last month.
But it also persisted despite the weekly U.S. rig count published by industry firm Baker Hughes showing its first surge in oil rigs in seven weeks — not good for hedge funds betting on the number to continue ticking lower. Baker Hughes reported a 15-unit climb this week to 831 rigs.
With Friday’s settlement, crude prices have rallied for a fifth straight week.
Year-to-date, WTI is up about 39% and Brent is nearly 31% higher. Outside of crude, the energy star has been gasoline, rising 49%, while heating oil, a proxy for diesel and other transportation fuels, has gained 22%. AAA’s Daily Fuel Gauge Report shows U.S. retail prices up about 20% this year with the national average at $2.727 a gallon.
Responsible for two of the biggest oil price crashes of the past five years due to its prolific output, shale had been showing signs of slowing over the past month despite the Energy Information Administration (EIA) announcing on Wednesday a new record high production of 12.2 million barrels per day in U.S. crude last week.
Weakening signs in U.S. production have been a further boon to Saudi Arabia’s strategy of bringing oil prices back from the 40% crash in the fourth quarter of 2018. Since December, the Saudis have embarked on aggressive production cuts with their allies in OPEC, as well as 10 other oil producing countries led by Russia.
President Donald Trump, who’s against any big rally in oil for fear of their impact on pump prices ahead of next year’s U.S. election, has ironically helped the Saudi campaign with his administration’s sanctions on Iranian and Venezuelan oil that have further tightened the market.
Some cheerleaders of the oil rally have suggested in recent days that investors may be having second thoughts of overextending the market after EIA data Wednesday showing a crude inventory build of 7.2 million barrels last week.
While that build came from issues at the Houston Ship Channel last month that slowed U.S. oil exports, a few analysts prodded for a closer inspection of oil’s fundamentals. Phil Flynn, senior energy analyst at the Price Futures Group brokerage in Chicago, said:
“While the fundamental picture is still very bullish, the market wants more information before they take prices to the next level.”
Petromatrix, an oil consultancy in Zug, Switzerland, said the technicals for crude also looked suspect after the race in Brent prices this week past its 200-Day Moving Average:
“We actually find the current technical action too clean and that does not play in favor of holding open interest. Money managers are holding a considerable amount of length in crude oil futures and will be disappointed if they cannot find fresh buying interest above $70 Brent.”
See also:
- Oil Prices Press Lower, Paring a Fifth-Straight Week of Gains
- U.S. crude output growth to slow as shale revolution loses momentum (Hellenic Shipping News)
Natural Gas (Hellenic Shipping News)
U.S. natural gas prices remain mired below $3 per million British thermal units despite a relatively cold winter that has left the volume of gas in storage well below normal for the time of year.
Futures prices for natural gas delivered to Henry Hub in June 2019 are just over $2.70 per million BTUs, down from $2.90 in the middle of March, and have remained well below $3 throughout the last two years.
Gas prices have remained relatively low even though a much colder winter in 2018/19 than in the previous three years pushed up consumption sharply and depleted inventories.
Working stocks in underground storage fell to 1,107 billion cubic feet by March 22, 21 percent below the year-earlier level and 33 percent under the prior five-year seasonal average.
Stocks are now at the lowest level for the time of year since 2014, despite a 13 percent increase in consumption in the last five years (“Monthly energy review”, U.S. Energy Information Administration, March 2019).
Spot prices spiked briefly in October and November, reaching more than $4.80 at one point, and again in January to $3.60, but otherwise the market has not signalled any shortage.
The combination of generally low prices with occasional spikes is the result of two trends: internationalisation of the U.S. gas market and the increasingly dominant role of gas as the marginal source of electric generation.
INTERNATIONALISATION
U.S. gas production has recently been rising at an annual rate of 13-14 percent, outstripping the increase in domestic consumption, and it hit a record of 2,755 billion cubic feet in December.
Gas production has been surging despite relatively low prices because of the remarkable productivity of new shale wells and large increases in drilling and completion efficiency.
At the same time, the country’s gas exports have accelerated and are rising at an annual rate of around 20 percent, reaching a record of 363 billion cubic feet in January.
As a result, the U.S. gas market is moving from an almost entirely closed system to one that is much more open to international trade and linked to markets overseas, with an impact on pricing behaviour.
In the past, the seasonal balancing of production and consumption was achieved almost entirely through changes in domestic inventories, but it can now be spread across a much larger international market.
Most of the time, price changes in a larger (internationalised) market can be more muted than in a smaller (purely domestic) one as there is more flexibility to meet seasonal variability in consumption.
MARGINAL GENERATION
While the market has become more internationalised, gas has also become increasingly important as the dominant source of electricity generation (tmsnrt.rs/2CPw57U).
Gas-fired power stations accounted for 34 percent of all electricity generation in 2018, up from 26 percent in 2014, the U.S. Energy Information Administration says.
More importantly, gas has become by far the most important source of marginal generation during periods of exceptionally high electricity consumption, either during the winter heating season or the summer cooling one.
In the fourth quarter of 2018, gas consumption was running at record rates for any given level of overall heating demand because of its growing role in power generation.
As gas-fired power plants have replaced older and less efficient coal-fired units, almost all the extra generation during periods of intense cold comes from gas-fired units.
The result is that gas consumption now increases significantly faster than overall heating demand during severe winter weather, with prices spiking to enforce conservation and switching to coal.
STOCKS AND PRICES
The gradual internationalisation of the U.S. gas market coupled with its growing dominance in the electricity system is changing the relationship between gas stocks and prices.
At low to moderate levels of heating demand, there is now a much lower call on gas in storage as a result of the big increase in production relative to domestic consumption (internationalisation dominates).
In effect, if temperatures track their long-term seasonal averages, withdrawals from storage now start about one week later and finish one week earlier each year, significantly reducing winter pressure on gas inventories.
But at very high levels of winter heating demand, the growing reliance on gas for power generation can still lead to a large storage drawdown (marginalisation dominates).
Most of the time, the market is now comfortable carrying lower inventories than before, even as prices remain weak.
But in periods of exceptional cold, inventory draws become much larger, the market tightens rapidly, and prices are still liable to spike.
Source: Reuters
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