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 Financials, Basic Materials and Industrials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average added 1.03%, while the S&P 500 index climbed 0.66%, and the NASDAQ Composite index climbed 0.46%.
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The best performers of the session on the Dow Jones Industrial Average were WaltDisney Company (NYSE:DIS), which rose 11.54% or 13.46 points to trade at 130.06 at the close. Meanwhile, Dow Inc (NYSE:DOW) added 6.21% or 3.41 points to end at 58.30 and JPMorgan Chase & Co (NYSE:JPM) was up 4.69% or 4.98 points to 111.21 in late trade.
The worst performers of the session were UnitedHealth Group Incorporated (NYSE:UNH), which fell 5.18% or 12.20 points to trade at 223.22 at the close.Chevron Corp (NYSE:CVX) declined 4.94% or 6.23 points to end at 119.76 and PfizerInc (NYSE:PFE) was down 1.32% or 0.56 points to 41.71.
The top performers on the S&P 500 were Anadarko Petroleum Corp (NYSE:APC) which rose 32.01% to 61.78, Pacific Gas & Electric Co (NYSE:PCG) which was up 20.65% to settle at 23.08 and Walt Disney Company (NYSE:DIS) which gained 11.54% to close at 130.06.
The worst performers were Anthem Inc (NYSE:ANTM) which was down 8.48% to 252.85 in late trade, National Oilwell Varco Inc (NYSE:NOV) which lost 8.39% to settle at 26.87 and UnitedHealth Group Incorporated (NYSE:UNH) which was down 5.18% to 223.22 at the close.
The top performers on the NASDAQ Composite were Taronis Technologies Inc (NASDAQ:TRNX) which rose 47.46% to 0.990, Histogenics Corp (NASDAQ:HSGX) which was up 33.53% to settle at 0.228 and Reebonz Holding Ltd (NASDAQ:RBZ) which gained 32.99% to close at 11.49.
The worst performers were TRACON Pharmaceuticals Inc (NASDAQ:TCON) which was down 49.05% to 0.6623 in late trade, Bridgeline Digital Inc (NASDAQ:BLIN) which lost 20.92% to settle at 0.1890 and Future Fintech Group Inc (NASDAQ:FTFT) which was down 20.00% to 1.6400 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1882 to 1092 and 104 ended unchanged; on the Nasdaq Stock Exchange, 1426 rose and 1202 declined, while 81 ended unchanged.
Shares in Walt Disney Company (NYSE:DIS) rose to all time highs; up 11.54% or 13.46 to 130.06. Shares in UnitedHealth Group Incorporated (NYSE:UNH) fell to 52-week lows; down 5.18% or 12.20 to 223.22. Shares in Walt Disney Company (NYSE:DIS) rose to all time highs; rising 11.54% or 13.46 to 130.06. Shares in UnitedHealth Group Incorporated (NYSE:UNH) fell to 52-week lows; losing 5.18% or 12.20 to 223.22.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 7.76% to 12.01 a new 6-months low.
Gold Futures for June delivery was up 0.03% or 0.35 to $1293.65 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in May rose 0.35% or 0.22 to hit $63.80 a barrel, while the June Brent oil contract rose 0.97% or 0.69 to trade at $71.52 a barrel.
EUR/USD was up 0.49% to 1.1305, while USD/JPY rose 0.34% to 112.03.
The US Dollar Index Futures was down 0.26% at 96.560.
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The U.S. dollar looks set to snap a three-week winning streak as downbeat consumer sentiment data did little to help the greenback offset losses against the euro and sterling.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.25% to 96.57.
The Michigan consumer sentiment index fell to a reading of 96.9, well below expectations for a reading of 98.1, following two-straight months that saw gains above expectations, according to economist forecasts compiled by Investing.com.
The data is unlikely to prompt the Federal Reserve to divert from its wait-and-see approach to monetary policy.
“These numbers won’t alter the FOMC’s view that a patient approach is warranted,” Action Economics said.
A rise in the pound and euro also stifled the dollar’s attempt at clawing back losses.
GBP/USD rose 0.20% to $1.3080 on reports of progress on talks between U.K. Prime Minister Theresa May and opposition leader Jeremy Corbyn. The pound was also given a second wind on expectations that holding a second referendum on Brexit may be put to a vote in parliament.
This comes just days the EU granted a delay to Brexit until October 31 to allow ample time for May to hash out a deal that lawmakers are willing to back.
EUR/USD climbed 0.43% to $1.1298 and USD/JPY rose 0.34% to $112.03, with the latter pair boosted by a fall in the yen as risk appetite returned on Wall Street following mostly upbeat earnings from major banks.
USD/CAD fell 0.41% C$1.3329 as rising oil prices propped up the loonie.
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Gold and the dollar are offsetting each other’s strength as neither seem to have an overwhelming edge now.
Prices for bullion and gold futures diverged in a rare performance on Friday as investors tried to discern direction for the yellow metal amid conflicting data and fundamentals.
Spot gold, reflective of trades in bullion, was down $1.20, or 0.1%, at $1,291.52 an ounce by 1:50 PM ET (17:50 GMT).
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled the official session up $1.90, or 0.1%, at $1,295.20 per ounce and finished the week basically flat.
The divergence came as the U.S. dollar index, which measures the greenback against six rival currencies, fell 0.23% to 96.58. The yield on the 10-Year Treasury, meanwhile, advanced 4.5 basis points to 2.55%.
Key stock indexes on Wall Street rose on runaway first-quarter earnings for JPMorgan Chase (NYSE:JPM) and a multibillion-dollar energy takeover by Chevron(NYSE:CVX). Chevron announced a deal to buy Anadarko Petroleum (NYSE:APC) for $65 in cash and stock. That spurred confidence that the equities rally could go further despite a slowing economy.
The dollar and stocks are key contrarian trades to gold.
Capital Economics analysts said in a note:
“Given the marked decline we expect in U.S. equities this year, we suspect that safe-haven assets will soon surge. We think gold investment should be strong, particularly in the form of exchange-traded fund buying. As a result, we expect the price of gold to rally to $1,400 per ounce by end-2019.”
Yet, Chris Gaffney, president of world markets at TIAA Bank, told Reuters that the outlook for inflation was tame:
“The (U.S.-China) trade situation is getting resolved, and Brexit looks like it’s going to be pushed down the road. So right now investors don’t have any incentive to buy gold.”
Palladium rose after a two-day slide to remain the world’s priciest traded metal.
Spot palladium was up $6.20, or 0.5%, at $1,375.80 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 less than $100-an-ounce lately.
Trades in other Comex metals as of 1:50 PM ET (17:50 GMT):
Palladium futures up $17.95, or 1.3%, at $1,350 per ounce.
Platinum futures up $4, or 0.5%, at $899.30 per ounce.
Silver futures up 10 cents, or 0.7%, at $14.97 per ounce.
Copper futures up 6 cents, or 2.1%, at $2.95 per pound.
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The $65 level for WTI seems to be on its way. But ahead of that, the oil rig count has to be supportive.
Crude futures rose again on Friday, finishing up for a sixth-straight week, as threats of a wipeout in Libyan crude supply bolstered an already squeezed market.
New York-traded West Texas Intermediatecrude settled up 31 cents, or 0.5%, at $63.89 per barrel. It hit a session high of $64.65 in a fresh attempt by long-oil hedge funds toward the $65 target.
London-traded Brent, the global benchmark for oil, settled up 72 cents, or 1%, to $71.55. It matched a November high of $71.78 on Wednesday.
For the week, WTI rose about 1% and Brent gained nearly 2%. Year-to-date, U.S. crude is up 41% while U.K. benchmark shows a 32% rise.
The U.S. oil rig count, published by industry firm Baker Hughes, rose by two units this week after last week’s 15-rig climb. Oil bulls need to ensure that the rig count doesn’t go ramping up to preserve the market’s bullish underpinnings.
The rig count is a lagging indicator, with additional production showing up with a five-to-six week latency after new drilling is reported. Still, it is an important gauge to market participants trying to determine if U.S. output is on the rise. Just last week, the U.S. Energy Information Administration estimatedin its weekly supply-demand report that production had reached a new high of 12.2 million barrels per day.
Some analysts also wondered if the Libyan conflict was being overplayed.
Reports on Friday suggested that renegade Libyan general Khalifa Haftar had vowed to wipe out the North African country’s oil production if he gained control of the capital, Tripoli. But after an early blitzkrieg, the warlord’s advances seem to have slowed. Olivier Jakob at PetroMatrix in Zug, Switzerland, said:
“Crude oil production has not been affected so far, and, if we cannot reduce the Libyan risk to zero, we go into this weekend with a lower risk premium for Libya than a week ago.”
Russian President Vladimir Putin’s remarks this week that Moscow was against “uncontrollable oil price increases” was also a red flag to Jakob.
OPEC, Russia and other non-member producers are reducing output by 1.2 million bpd from Jan. 1 for six months. The producers are due to meet on June 25-26 to decide whether to extend the pact.
Kirill Dmitriev, the Russian sovereign wealth fund chief who engineered the cooperation with OPEC, indicated this week that he wanted Moscow to pump more, although the Saudis, who virtually run OPEC, would like the curbs to remain. Russia’s breakeven price for oil is around $42 per barrel, while the Saudis need the market to be at around $84 to fund their national budget.
But Putin, who’s Russia’s ultimate dealmaker, said he wasn’t decided yet on how Moscow’s cooperation with OPEC should go.
Putin aside, U.S. President Donald Trump is also against high oil prices, which he fears will hurt his 2020 reelection campaign. Jacob said:
“We tend to focus on Trump’s reaction to gasoline prices, but the Russian government is also continuously worried about the street discontent factor that comes with rising gasoline prices.
“We think that the Russian comments of this week are a sign that we are starting to approach this zone of divergence of interest (with Saudi Arabia), which will make it difficult to maintain the OPEC+ agreement above current prices.”
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Natural Gas (ETF Daily News)
The U.S. set a record for natural gas consumption in 2018, with demand jumping 10 percent to 81.2 billion cubic feet per day. The electric power sector was the leading demand driver, consuming 29.1 Bcf/d in 2018. Electric power alone accounted for 35 percent of total U.S. consumption. Commercial and industrial sector natural gas consumption also hit record highs last year.
While natural gas consumption is far from clean energy, it’s a much cleaner alternative to coal. Natural gas continues to displace coal as a source of electric power in the U.S.
The country added 14,500 megawatts of net natural gas capacity in 2018, while 13,000 MW of coal-fired capacity was taken offline.
LNG Vs. CNG
Natural gas used as fuel comes in two forms. Compressed natural gas (CNG) is gas stored under high pressure and typically delivered via pipeline. Since CNG is less dense than air, it tends to dissipate in the event of a leak, providing a safety advantage over gasoline.
Liquid natural gas (LNG) is gas stored at extremely cold temperatures and delivered via vehicles. LNG is extremely energy-dense compared to other petroleum fuels, providing an advantage for industries and nations that can afford it.
The nation of Bahrain in the Persian Gulf is set to open an LNG import terminal with an LNG floating storage unit starting in May. The terminal will reportedly have a capacity of 800 million cubic feet per day.
Despite the booming demand for natural gas, U.S. gas prices are down about 2.1 percent from a year ago.
New sources of natural gas are coming online every day. In February, Exxon Mobil Corporation XOM 0.95% made the third-largest natural gas discovery in the past three years off the coast of Cyprus in the Mediterranean Sea. Exxon estimates the discovery at between 5 trillion and 8 trillion cubic feet of gas.
In the U.S. Permian Basin, oil producers are burning off enough waste natural gas to power the entire state of Texas. Oil producers use a process called “flaring” to burn off natural gas that is difficult to capture and store. In the fourth quarter of 2018, Permian producers burned off a record 533 million cubic feet per day.
Price Outlook
Looking ahead, Tudor, Pickering, Holt & Co analysts say weak global pricing, particularly in Asia, is working against natural gas investors at the moment:
“If pricing remains weak there is potential for extended maintenance to occur over the summer and/or a delayed ramp up of new projects scheduled to come online. With LNG shouldering the bulk of U.S. demand growth this year, softness in the global market could prove to be a headwind for U.S. gas pricing.”
With headwinds ahead for the industry, the US NAT GAS FD L/UT LTD PARTN INT UNG 0.51% could be under pressure in coming months. The UNG fund is already down 3.9 percent year to date.
The United States Natural Gas Fund L.P. (UNG) was trading at $23.39 per share on Friday afternoon, down $0.14 (-0.59%). Year-to-date, UNG has gained 0.30%, versus a 9.07% rise in the benchmark S&P 500 index during the same period.
UNG currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #52 of 108 ETFs in the Commodity ETFs category.
This article is brought to you courtesy of Benzinga.
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