Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.25%
U.S. stocks were higher after the close on Friday, as gains in the Consumer Services, Basic Materials and Healthcare sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 0.25%, while the S&P 500 index added 0.39%, and the NASDAQ Composite index climbed 0.79%.
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The best performers of the session on the Dow Jones Industrial Average were Walt Disney Company (NYSE:DIS), which rose 2.96% or 3.14 points to trade at 109.05 at the close. Meanwhile, Home Depot Inc (NYSE:HD) added 2.07% or 4.85 points to end at 239.33 and Walmart Inc (NYSE:WMT) was up 2.04% or 2.52 points to 125.94 in late trade.
The worst performers of the session were Raytheon Technologies Corp (NYSE:RTX), which fell 2.10% or 1.13 points to trade at 52.73 at the close. Boeing Co (NYSE:BA) declined 2.06% or 2.52 points to end at 120.00 and American Express Company (NYSE:AXP) was down 1.90% or 1.59 points to 82.22.
The top performers on the S&P 500 were Royal Caribbean Cruises Ltd (NYSE:RCL) which rose 6.54% to 37.45, Gap Inc (NYSE:GPS) which was up 6.00% to settle at 7.60 and Macy’s Inc (NYSE:M) which gained 5.99% to close at 5.31.
The worst performers were Lam Research Corp (NASDAQ:LRCX) which was down 6.38% to 251.84 in late trade, VF Corporation (NYSE:VFC) which lost 6.28% to settle at 51.96 and Qualcomm Incorporated (NASDAQ:QCOM) which was down 5.13% to 75.77 at the close.
The top performers on the NASDAQ Composite were Sorrento Therape (NASDAQ:SRNE) which rose 158.02% to 6.76, Torchlight Energ (NASDAQ:TRCH) which was up 48.28% to settle at 0.4300 and Sundial Growers Inc (NASDAQ:SNDL) which gained 42.08% to close at 0.55.
The worst performers were Cassava Sciences Inc (NASDAQ:SAVA) which was down 73.86% to 2.12 in late trade, Creative Realities Inc (NASDAQ:CREX) which lost 32.79% to settle at 2.890 and Applied DNA Sciences Inc (NASDAQ:APDN) which was down 26.96% to 11.11 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1662 to 1193 and 74 ended unchanged; on the Nasdaq Stock Exchange, 1660 rose and 976 declined, while 64 ended unchanged.
Shares in Sorrento Therape (NASDAQ:SRNE) rose to 52-week highs; rising 158.02% or 4.14 to 6.76.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 2.21% to 31.89.
Gold Futures for June delivery was up 0.70% or 12.25 to $1753.15 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in June rose 7.80% or 2.15 to hit $29.71 a barrel, while the July Brent oil contract rose 5.49% or 1.71 to trade at $32.84 a barrel.
EUR/USD was up 0.15% to 1.0820, while USD/JPY fell 0.19% to 107.03.
The US Dollar Index Futures was down 0.11% at 100.398.
See also:
Stocks – Wall Street Makes Comeback, but Still Suffers Worst Week Since March
Stocks – Dow Shakes Off Retail Sales Pain as Consumer Staples Climb
Stocks – Wall Street Opens Lower on Trade Tension, Dismal Retail Numbers
Stocks – Amazon, Walmart Outperform in Premarket Despite Retail Sales Data
The U.S. dollar has given back some of its overnight gains in early European trade Friday, but remains in favor as risk aversion still dominates, amid rising Sino-U.S. tensions.
At 2:45 AM ET (0645 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 100.365, down 0.1%, having earlier Friday reached a three-week high.
EUR/USD fell 0.03% to 1.0800 ahead of a revised German GDP reading at 4 AM, while USD/JPY dropped 0.1% to 107.17.
U.S. President Donald Trump ratcheted up these tensions in an interview with Fox Business Network on Thursday, stating he was disappointed with China’s failure to contain the coronavirus, that this had cast a pall over the trade deal between the two countries. He suggested he could even cut off ties.
Analysts at Danske Bank said in a note to investors:
“It cannot be ruled out that he would pull out of the phase-one trade deal and start putting tariffs back on China. He would risk hurting the economy even further as well as jeopardize important farmer votes in key swing states if China pulls the plug on agricultural purchases. On the other hand, he could gain politically from taking a tough stance on China.”
The yuan, which is highly sensitive to relations between the world’s two biggest economies, was on the back foot and touched a one-week low of 7.1026 in onshore trade.
At 02:45 AM ET, USD/CNY traded at 7.1003, up 0.1%, as the market struggled to take a clear lead from data that showed Chinese industrial production rebounding in April but retail sales still down 7.5% on the year.
The deteriorating relationship between these two important countries is the latest potential spanner in the works of global growth, given worries about a second wave of infections and the slow reopening of economies badly hit by the social distancing measures introduced to combat the virus.
With this in mind, it may be worth keeping an eye on the Swiss franc and its relationship with the euro, with the single currency hitting an almost five-year low against the franc of 1.0510 – near the level that many deem to be the unofficial line the Swiss National Bank defends. The euro has been bumping against support at the 1.05 level for the last month.
At 02:45 AM ET, EUR/CHF traded at 1.0516, up 0.04%.
Michael Cahill, an economist at Goldman Sachs (NYSE:GS) said, reported by Bloomberg:
“Recent events in Europe have led to increased tensions along many of the same stress points that have troubled the region over the last decade, and this has put renewed appreciation pressure on the traditional safe haven currency on the continent.”
Elsewhere, the British pound remained under pressure at $1.2196, down 0.25%, after touching a five-week low of $1.2161 overnight as the British government reiterated its refusal to extend the Brexit transition deadline beyond December. The third round of talks on the post-Brexit trading relationship with the EU winds up today.
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The stream of depressing U.S. data isn’t slowing. Neither is investors’ reinforced desire to hedge against it with gold.
The yellow metal pierced the key $1,750-per-ounce mark on Friday, sending bullion prices to 7-½ year highs and U.S. gold futures to a one-month peak after more dismal data on U.S. retail sales and industrial production.
“Gold continues to rise as grim milestones are reached with U.S. economic data,” said Ed Moya, analyst at New York-based online trading platform OANDA.
“U.S. data for the month of April was disastrous, adding to fears of permanent damage to the economy. Along with escalating tensions between the U.S. and China, (these) should continue to support higher gold prices.”
Spot gold, which tracks real-time trades in bullion, rose $13.62, or 0.8%, to $1,743.62 by 2:20 PM ET (18:20 GMT). It earlier surged to $1,751.54, its highest since December 2012.
U.S. gold futures for June settled up 24.50, or 0.9%, at $1,756.30. It scaled $1,760.55 at the session highs, marking a peak since April 14.
For the week, both spot gold and futures gained nearly 3%.
U.S. data issued on Friday showed U.S. retail sales falling 16.4% and industrial production down 11.4% in April, the worst monthly performance ever for the two gauges, as the Covid-19 pandemic crippled the U.S. economy.
The U.S. economy shrank 4.8% in the first three months of 2020 for the sharpest economic decline since the Great Recession of 2007 to 2009. While nearly all 50 states in America have reopened their economies in one way or another over the past two weeks, economists warn of a sharp recession by the second quarter, meaning more bleak data to come.
White House Economic Adviser Larry Kudlow said on Friday the economy was still in a freefall mode despite many businesses having resumed operations since lockdowns imposed over the Covid-19. Kudlow told a Fox Business interview:
“We haven’t turned the corner yet on unemployment claims,” “I was looking through the continuing claims and they look a little lighter or lower than people might have thought. But they’ve been in a pretty steady downtrend for the past six or seven weeks and they’re still bad numbers and they’re still heartbreak numbers, hardship numbers The pandemic’s contraction and Q2 is going to be very difficult.”
Gold also got a shot in the arm from worsening U.S.-China relations.
In a separate interview with Fox Business broadcast on Thursday, President Donald Trump said he was very disappointed with China’s failure to contain the disease and that the pandemic had cast a pall over his January trade deal with Beijing, which he has previously hailed as a major achievement.
Trump, who seeks reelection in November and has been sharply criticized for his own handling of the pandemic, said he has no interest in speaking to his Chinese counterpart Xi Jinping to fix ties, suggesting that he might even sever relations with the world’s second-largest economy.
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President Donald Trump might very be disappointed with China these days, but it was Chinese data on Friday that helped accelerate U.S. crude oil’s run toward $30 per barrel.
West Texas Intermediate, the New York-traded benchmark for U.S. crude, settled up $1.87, or 6.8%, at $29.43 per barrel after data showed China’s industrial production rose 3.9% in April from a year ago, improving from a 1.1% fall in March.
Brent, the London-traded global benchmark for oil, rose $1.37, or 4.4%, to settle at $32.50.
WTI has been on a tear since hitting a bottom of $12.34 on Aug 28, rallying almost 140% in just over two weeks. The U.S. crude benchmark remains down 50% on the year. But Friday’s two-month high of $29.91 in WTI brought its discount versus Brent, typically at $5 per barrel, to under $3 at one point, powerfully altering the dynamics between the two benchmarks.
For the week, WTI gained 19%, extending last week’s 25% jump and the previous week’s 17% rise.
Brent saw a relatively modest climb of 5% on the week. Its gains over the past two weeks were virtually a reverse of WTI’s – 17% last week and 23% the previous week.
Much of the boom in U.S. crude of late has been due to cratering domestic production, as the coronavirus pandemic shut down wells and oil rigs across the United States at a faster rate than elsewhere in the world. Rising gasoline production has also helped as most of the 50 U.S. states have reopened from lockdowns imposed over the Covid-19.
Rising gasoline consumption has also helped as most of the 50 U.S. states have reopened from lockdowns imposed over the Covid-19.
But Friday’s run toward $30 WTI – an important psychological mark for oil bulls – – came on the back of China’s resurgent industrial production data underscoring a recovery in factory activity in the world’s largest oil importing country.
It also comes a day after President Donald Trump said he was very disappointed with China’s failure to contain the outbreak of the virus, and that he might even cut ties with the world’s second largest economy.
Moya, analyst at New York’s OANDA, said:
“WTI crude neared a two-month high as China’s industrial output rose for the first time since the coronavirus pandemic, fueling hope that crude demand will soon improve in Europe and then the U.S. China remains the template for the economic recovery for the rest of the world and (it) gave energy traders some hope that demand will begin to recover over the coming weeks.”
The march toward $30 WTI will mark a personal victory for Trump, who lobbied OPEC, Russia and other world oil producers in April to slash production and has gotten behind the U.S. energy industry to ensure its survival amid the pandemic.
See also:
- Crude Oil Higher; Chinese Industrial Production Data Helps
- Oil Mixed Again With Continuous Second Wave Fears
Natural Gas (ETF Trends)
The once beaten down natural gas sector-specific exchange traded fund has surged over the past month as U.S. crude oil producers turn off supply and investors bet on higher natgas prices.
The First Trust Natural Gas ETF (NYSEArca: FCG), which tracks natural gas exploration and production companies, was the best performing non-leveraged ETF of the past month, jumping 84.8%.
The historic fall in crude oil prices, which dipped into the negative for the first time ever, on the heels of the collapse in demand in response to the coronavirus outbreak has forced many oil producers to turn off oil wells. The shutdowns not only diminishes the supply of crude oil, but it also reduces a lot of natural gas that is extracted as a byproduct.
Further bolstering the natural gas markets, coal’s share of U.S. electricity generation has steadily declined to about a third from last year, the Wall Street Journal reports.
Both factors have helped drive interest for natural gas and its producers. For example, hedge funds and other speculators last week were net long natgas for the first time since last May, according to Commodity Futures Trading Commission data.
SunTrust Robinson Humphrey analysts upgraded their outlook for shares of seven gas producers by an average of 69%. Additionally, Tudor, Pickering, Holt & Co. recommended EQT, Cabot Oil & Gas Corp. and Tourmaline Oil Corp. to capitalize on near-term gains due to 6 billion to 7 billion cubic feet of gas per day that were cut from the market following the closure of oil wells.
Mark Unferth, a portfolio manager at Alpine Capital Research, told the WSJ, referring to companies that don’t produce much poorly priced oil and natural gas liquids:
“We think the dry gas producers are attractive. We’ve been adding to our exposure the past six weeks and overall it’s about 5% of our portfolio.”
See also:
Rising Natural Gas Prices Are a Hot Bet (The Wall Street Journal)
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Forex: Pound, Euro to Extend Weekly Losses; Virus Impact Will Continue to Dominate
Oil Mixed Again With Continuous Second Wave Fears
