Written by Investing.com Staff, Investing.com
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 2.84%
U.S. stocks were lower after the close on Friday, as losses in the Oil & Gas, Financials and Technology sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average lost 2.84% to hit a new 1-month low, while the S&P 500 index fell 2.42%, and the NASDAQ Composite index lost 2.59%.
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The best performers of the session on the Dow Jones Industrial Average were Cisco Systems Inc (NASDAQ:CSCO), which rose 2.41% or 1.09 points to trade at 46.31 at the close. Meanwhile, Dow Inc (NYSE:DOW) fell 0.45% or 0.18 points to end at 39.80 and Pfizer Inc (NYSE:PFE) was down 0.87% or 0.28 points to 32.04 in late trade.
The worst performers of the session were Goldman Sachs Group Inc (NYSE:GS), which fell 8.65% or 17.91 points to trade at 189.19 at the close. Nike Inc (NYSE:NKE) declined 7.62% or 7.73 points to end at 93.67 and JPMorgan Chase & Co (NYSE:JPM) was down 5.48% or 5.37 points to 92.59.
The top performers on the S&P 500 were Gap Inc (NYSE:GPS) which rose 18.80% to 12.07, NetApp Inc (NASDAQ:NTAP) which was up 5.16% to settle at 43.99 and F5 Networks Inc (NASDAQ:FFIV) which gained 3.90% to close at 140.12.
The worst performers were Arconic Inc (NYSE:ARNC) which was down 11.58% to 13.67 in late trade, Huntington Bancshares Incorporated (NASDAQ:HBAN) which lost 11.02% to settle at 8.80 and KeyCorp (NYSE:KEY) which was down 8.91% to 11.76 at the close.
The top performers on the NASDAQ Composite were Cleveland BioLabs Inc (NASDAQ:CBLI) which rose 147.67% to 4.2600, MDC Partners Inc (NASDAQ:MDCA) which was up 78.26% to settle at 2.050 and Concrete Pumping Holdings Class A (NASDAQ:BBCP) which gained 50.14% to close at 5.48.
The worst performers were Luckin Coffee (NASDAQ:LK) which was down 54.00% to 1.38 in late trade, Ideanomics Inc (NASDAQ:IDEX) which lost 40.16% to settle at 1.4600 and Seanergy Maritime Holdings Corp (NASDAQ:SHIP) which was down 39.46% to 0.1695 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2368 to 525 and 42 ended unchanged; on the Nasdaq Stock Exchange, 2144 fell and 584 advanced, while 36 ended unchanged.
Shares in Cleveland BioLabs Inc (NASDAQ:CBLI) rose to 3-years highs; gaining 147.67% or 2.5400 to 4.2600. Shares in Luckin Coffee (NASDAQ:LK) fell to all time lows; falling 54.00% or 1.62 to 1.38.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 7.79% to 34.73.
Gold Futures for August delivery was up 0.80% or 14.20 to $1784.80 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in August fell 1.34% or 0.52 to hit $38.20 a barrel, while the August Brent oil contract fell 0.78% or 0.32 to trade at $40.73 a barrel.
EUR/USD was up 0.01% to 1.1218, while USD/JPY rose 0.04% to 107.23.
The US Dollar Index Futures was up 0.07% at 97.460, but was down 0.18% for the week.
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The dollar posted a weekly loss as data showed bearish bets on the greenback surged to a more-than-two-year high.
Speculators increased their net short dollar position in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday, the largest bearish position since April 2018.
The value of the net short dollar position rose to $16.83 billion in the week ended June 23, compared with a net short of $15.69 billion the previous week, Reuters reported.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.07% to 97.09.
Rising Covid-19 infections in the U.S. and other parts of the world did little to spark investor appetite for the safe-haven greenback, and one analyst suggests that is a sign to sell into dollar strength.
The dollar may attract safe-haven demand in the wake of renewed market uncertainty, but any rebound remains a selling opportunity, according to Unicredit (MI:CRDI). Unicredit FX strategist Roberto Mialich said:
“It is true that the dollar is once again benefiting from fears of a second wave of the Covid-19 pandemic, but so far these concerns have not been sufficient to trigger an aggressive return to the greenback.”
See also:
- Forex – Dollar Maintains Strength as Virus Cases Grow
- Dollar Retreats, But Holds On To Safe-Asset Crown Over Increasing COVID-19 Numbers
Gold prices rose for a third week in a row, intensifying its target for $1,800 pricing, as investors piled into safe havens amid a new global surge in coronavirus cases.
U.S. gold futures for August delivery settled up $9.70, or 0.5%, at $1,780.30 per ounce on New York’s Comex. On Thursday, the benchmark gold futures contract spiked to $1,796.10, the highest reached on Comex since November 2011.
Spot gold, which tracks real-time trades in bullion, rose $4.32, or 0.2%, to $1,768 by 3:03 PM ET (19:03 GMT). The bullion indicator hit an intraday high of $1,779.45 in the previous session, marking a peak since October 2012.
For the week, Comex gold was up 1.7% after gains of 0.9% and 3.2% in the previous two weeks.
Analysts said the yellow metal appeared well primed to rewrite all-time highs above $1,900 set in November 2011. Ed Moya, an analyst at New York-based online trading platform OANDA, said:
“Gold prices seem destined for record-high territory as the latest spike in Covid-19 cases could result in slower economic recovery that will keep the stimulus trade going strong.”
The United States reported more than 41,000 new Covid-19 cases on Thursday, the second consecutive day with a record total, with health officials saying the true national caseload was probably 10 times the official count. These come as more than 2.4 million Americans have already been infected by the coronavirus, with a death toll breaching 123,000. A new model by the University of Washington also predicts 200,000 coronavirus deaths in the United States by Oct. 1.
Globally, India, South Korea and New Zealand have all reported higher incidences of the Covid-19 in recent weeks.
The outlook for a global economic recovery has worsened or at best stayed about the same over the past month, according to a majority of economists in Reuters polls, with the ongoing recession expected to be deeper than predicted in May.
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Oil prices fell around 3% on the week on fears of more economic disruptions as Covid-19’s rampage continues to devastate the United States and the world.
Also weighing on crude was data from earlier in the week showing the first jump in U.S. output in three months, despite demand for fuel remaining fledgling at best.
While the latest weekly reading for the U.S. oil rig count posted on Friday barely showed a change, few had doubts that the near quadrupling of crude prices since April had prompted drillers in shale patches to turn the spigots back on and restore some wells shut at the height of the pandemic.
Ed Moya, analyst at New York-based online trading platform OANDA, said:
“The oil demand recovery story has been dealt a blow with the U.S. registering the biggest-ever jump in coronavirus cases, suggesting many states may have to revisit regional lockdowns soon.
“The rapid demand rebound is not happening, but stimulus efforts, pauses in reopening of businesses and improved treatments for the virus are limiting the downward pressure on crude. States will do their best to avoid a complete reversal with reopening phases, so the economic recovery should not completely stall out.”
New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, was down 23 cents, or 0.6%, at $38.49 per barrel.
London-traded Brent, the global benchmark for oil, settled down 12 cents, or 0.3%, at $40.93.
For the week, WTI showed a decline of 3.2% while Brent was down 3%.
The United States reported more than 41,000 new cases on Thursday, the second consecutive day with a record total, with health officials saying the true national caseload was probably 10 times the official count. These come as more than 2.4 million Americans have already been infected, with the death toll breaching 123,000. A new model by the University of Washington predicts 200,000 coronavirus deaths in the U.S. by Oct. 1.
Globally, India, South Korea and New Zealand have all reported higher incidences of the Covid-19 in recent weeks.
The outlook for a global economic recovery has worsened or at best stayed about the same over the past month, according to a majority of economists in Reuters polls, with the ongoing recession expected to be deeper than predicted in May.
The U.S. Energy Information Administration, in its weekly update on Wednesday, said crude output was estimated at 11 million barrels per day for the week ended June 19, versus 10.5 million bpd in the previous week.
It was the first rise in U.S. production in 13 weeks. It comes after a 20% drop in output that followed the demand destruction for fuel caused by the coronavirus pandemic, after the record highs of 13.1 million bpd set in mid-March.
The production hike reported by the EIA for the week ended June 19 coincided with the 1.4 million-barrel build in crude stockpiles for the week, versus the 300,000 barrel rise anticipated by forecasters.
On the fuel demand side, the EIA reported a decline of nearly 1.7 million barrels in gasoline stockpiles, or about 400,000 more than expected. But to offset that, it also said distillates inventories, led by diesel, rose nearly 250,000 barrels against a forecast drop of 620,000.
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During all the chaos of the response to coronavirus, there has been one area of logic and sanity. Surprisingly enough, given its deserved reputation for massive volatility, the market in natural gas futures has resisted the temptation to follow the stock market and oil futures in overreacting massively to every bit of coronavirus-related news or data. It has, on the whole, moved logically based on long-term supply and demand factors, rather than the latest headlines.
Sure, natty (natural gas) did fall as stocks collapsed, beginning in late February, but that was a continuation of a downward trend that had started in November and that was being driven by oversupply and weak demand that had nothing to do with the pandemic. Similarly, it bottomed out in late March, at roughly the same time as stocks and oil, but the rebound in NG didn’t continue and accelerate past any logical endpoint as stocks did. There was no equivalent of insane speculation on bankrupt stocks here, and volatility has been reducing sharply for a while.
Natural gas, however, looks poised for a big move soon.
As you can see from the chart, NG has been trading in a decreasing range since that March low, forming a steep wedge pattern. A breakout from that is inevitable before long and when it comes, a big move in percentage terms looks certain.
Obviously, the most important question for traders is which side will give…will there be a breakout higher or a breakdown lower?
It is impossible to say for sure at this point, but on balance, I favor a move higher over the next few weeks.
We are poised close to the upper trend line right now, which in itself makes a break higher the more likely scenario. The fact that the lows have been achieved by sudden, short-lived moves down while the highs are more about sustained buying is also a bullish sign, but really, the technical picture isn’t the story.
From a fundamental perspective, both supply and demand are beginning to hint at a bullish environment. On the supply side, natural gas output remains elevated, but the effect of rig closures in response to the shutdown of the economy and the collapse of oil prices will be felt soon.
Demand is picking up as states reopen, but the very real risk of a second wave of coronavirus cases is tempering the market’s response. What will count though, is how those states respond should we see a spike in cases, and so far, the indication is that they won’t change course. Many have already seen an increase in cases and even deaths, but the feel that a return to some sort of normality is overdue, even if there is a price to pay.
The other big influence on demand for natural gas is the weather. I am not about to tell you that I can accurately predict something that has baffled even experts for centuries, but if there is a trend in recent patterns, it is towards the extreme. Given that, some serious heat waves that would increase electricity and therefore natural gas demand in the summer are at least possible.
So, natty shows a technical setup that could exaggerate the next move, the prospect of falling supply, and a good chance of increasing demand. That sounds like a “buy? To me, although I will be waiting for a confirmed breakout before wading in.
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