Written by Investing.com Staff, Investing.com
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.70%
U.S. stocks were lower after the close on Friday, as losses in the Financials, Oil & Gas and Industrials sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average declined 0.70%, while the S&P 500 index lost 0.50%, and the NASDAQ Composite index lost 0.17%.
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The best performers of the session on the Dow Jones Industrial Average were Nike Inc (NYSE:NKE), which rose 0.65% or 0.86 points to trade at 132.77 at the close. Meanwhile, 3M Company (NYSE:MMM) added 0.28% or 0.48 points to end at 172.09 and Chevron Corp (NYSE:CVX) was up 0.05% or 0.04 points to 85.77 in late trade.
The worst performers of the session were Boeing Co (NYSE:BA), which fell 2.93% or 6.03 points to trade at 199.64 at the close. Dow Inc (NYSE:DOW) declined 1.66% or 0.92 points to end at 54.42 and American Express Company (NYSE:AXP) was down 1.55% or 1.77 points to 112.37.
The top performers on the S&P 500 were CF Industries Holdings Inc (NYSE:CF) which rose 4.07% to 33.46, Microchip Technology Inc (NASDAQ:MCHP) which was up 3.76% to settle at 132.31 and Macerich Company (NYSE:MAC) which gained 2.93% to close at 9.48.
The worst performers were Foot Locker Inc (NYSE:FL) which was down 5.18% to 39.19 in late trade, Mylan NV (NASDAQ:VTRS) which lost 4.58% to settle at 17.28 and Carnival Corporation (NYSE:CCL) which was down 4.67% to 17.34 at the close.
The top performers on the NASDAQ Composite were Kaixin Auto Holdings (NASDAQ:KXIN) which rose 77.74% to 5.350, CUI Global Inc (NASDAQ:OEG) which was up 35.55% to settle at 1.190 and Net Element Inc (NASDAQ:NETE) which gained 31.33% to close at 12.70.
The worst performers were Tantech Holdings Ltd (NASDAQ:TANH) which was down 53.62% to 1.280 in late trade, Naked Brand Group Ltd (NASDAQ:NAKD) which lost 39.29% to settle at 0.175 and Nano Dimension Ltd (NASDAQ:NNDM) which was down 24.91% to 4.400 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1654 to 1245 and 100 ended unchanged; on the Nasdaq Stock Exchange, 1451 fell and 1324 advanced, while 75 ended unchanged.
Shares in Microchip Technology Inc (NASDAQ:MCHP) rose to all time highs; rising 3.76% or 4.80 to 132.31. Shares in Nike Inc (NYSE:NKE) rose to all time highs; up 0.65% or 0.86 to 132.77.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 1.56% to 22.75.
Gold Futures for December delivery was up 0.52% or 9.70 to $1871.20 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January rose 1.15% or 0.48 to hit $42.38 a barrel, while the January Brent oil contract rose 1.83% or 0.81 to trade at $45.01 a barrel.
EUR/USD was down 0.11% to 1.1860, while USD/JPY rose 0.10% to 103.83.
The US Dollar Index Futures was up 0.09% at 92.370.
The dollar edged higher in early European trade Friday, in tight ranges as traders digest a potential rift between U.S. Treasury Secretary Steven Mnuchin and the Federal Reserve.
At 3 AM ET (0800 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% at 92.325, just above the month’s low of 92.129. The dollar has lost ground against riskier currencies for over a week as drug manufacturers continue to report progress towards a Covid-19 vaccine.
EUR/USD dropped 0.1% to 1.1870, USD/JPY rose 0.1% to 103.86, while the risk sensitive AUD/USD fell 0.1% to 0.7286.
The dollar has had a couple of competing influences overnight, resulting in traders taking a cautious stance.
U.S. Treasury Secretary Steven Mnuchin called an end to some of the Federal Reserve’s pandemic lending, as he asked for $455 billion allocated to the Treasury under the CARES Act to be re-appropriated for other spending. The central bank openly disagreed with the move.
This was the first sign of a rift between these two essential bodies and sparked concern from some investors who had counted on central bank support, helping the safe-haven dollar.
This move overturned the earlier weakness in the greenback after earlier reports that U.S. Senate Republican and Democrat leaders had agreed to resume negotiations on another coronavirus stimulus package.
Weekly initial claims numbers had risen on Thursday for the first time in five weeks as the restrictions caused by the surge in Covid-19 cases halted the recovery in the employment market.
California ordered a curfew placed on all indoor social gatherings and non-essential outside activities, while the country’s top public health agency pleaded with Americans not to travel for Thanksgiving.
Elsewhere, GBP/USD rose 0.1% to 1.3270 after U.K. retail sales rose 1.2% in October, and were 5.8% higher than a year earlier, bucking forecasts for growth to slow to 4.2% as consumers started their Christmas shopping early.
However, news about a potential trade deal between the U.K. and the European Union continues to be the main driver for sterling, meaning moves on economic data tend to be limited. Analysts at ING said in a research note:
“Some EU countries have reportedly urged the European Commission to report its no-deal Brexit plans, which are adding some doubts about the effective state of any advances in the negotiations. These days will be crucial for Brexit, and we might expect a large move in GBP at any time now.”
See also:
- Pound Jumps as Brexit Deal Nears Landing (Wednesday)
Gold was up on Friday morning in Asia as the U.S. sent out contrary COVID-19 relief signals.
Gold futures inched up 0.08% to $1,863 by 11:53 PM ET (3:53 AM GMT).
Investors in gold were left uncertain as to which way to turn on Friday morning in Asia. Overnight, the U.S. has made two conflicting moves regarding the future of its COVID-19 stimulus path. On the one hand, Treasury Secretary Steven Mnuchin has asked the Federal Reserve to return funds for a general loan system that it is administering to support various organizations during the pandemic. And on the other, Senate Republican Majority Leader Mitch McConnell has agreed to restart talks with Democrats on a new COVID-19 stimulus package.
Mnuchin has sent a letter to the Fed requesting that $455 billion be returned to government coffers, the Fed is currently using the funds to run a loan scheme that supports business, non-profits, and local government through the COVID-19 crisis. The scheme is widely considered successful in staving off some of the worst effects of the coronavirus pandemic.
The U.S. Federal Reserve responded that it
“would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
Usually, this would be a negative for gold, as removal of stimulus should strengthen the dollar. However, over the same brief period, Republican heavyweight McConnell has said that his party is prepared to return to previously abandoned discussions with the Democrats on a new COVID-19 relief package. The talks have been deadlocked for months, and there has seemed to be no agreement in sight.
The news of the resumption of the meetings is a positive for gold, as a stimulus package would have the effect of weakening the greenback and making it cheaper for holders of other currencies to buy the precious metal.
The slight positive trend for gold comes as the dollar crept down earlier in the session and global markets are also mixed, with little movement overall.
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Crude oil prices rose Friday marking a third-straight week of gains as investors weighed up positive Covid-19 vaccine news against the prospect of further lockdowns souring demand.
On the New York Mercantile Exchange crude futures for December rose 41 cents to settled at $42.15 a barrel, while London’s Intercontinental Exchange (NYSE:ICE), Brent gained 59 cents to settle at $44.79 a barrel.
The number of oil rigs operating in the US rose by fell to 231, the first decline in ten weeks, from 236 last week, according to data from energy services firm Baker Hughes.
The fall in oil rigs counts, which often serve as an indicator of future production and demand, comes as oil and gas producers seek to steady output following a pandemic-fueled halt in the second quarter, when oil prices briefly turned negative.
Signs of falling activity, however, were shrugged off as investors bet that a sooner rather than later rollout of a vaccine will speed the reopening of the global economy, ushering in a wave of demand from hard-hit sectors such as air travel.
The ongoing winning streak comes just days after Energy Information Administration (EIA) reported that U.S. stockpiles of crude rose less than expected last week, though gasoline supplies jumped.
Inventories of U.S. crude rose by 0.8 million barrels for the week ended Nov. 13, compared with expectations for a rise of 1.65 million barrels. Gasoline inventories – one of the products that crude is refined into – rose by 2.6 million barrels, confounding expectations for a build of about 0.1 million barrels.
The weakness in fuel demand was attributed to further lockdowns in the U.S. amid soaring Covid-19 cases. Yet, some expect downside in crude prices from lockdowns will likely be temporary amid the ongoing rebalancing of demand and supply in oil markets. Goldman Sachs (NYSE:GS) said earlier this week:
“Any tactical downside in crude will likely be temporary, in our view, pushing back our $65/bbl Brent target into late 2021. We expect the winter Covid wave to delay, but not derail, the oil market rebalancing, with normalized OECD stocks, OPEC+ spare capacity returning to 1Q20 levels, and finally, shale production growth all occurring by 4Q21.”
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Natural Gas (Hellenic Shipping News)
US natural gas stocks posted a sizable injection last week at a time when the Lower 48 traditionally switches to net draws, while the remaining NYMEX Henry Hub winter strip tumbled 18 cents following the report.
Storage inventories increased by 31 Bcf to 3.958 Tcf for the week ended Nov. 13, the US Energy Information Administration reported the morning of Nov. 19.
The injection proved much more than an S&P Global Platts’ survey of analysts calling for a 22 Bcf build. Responses to the survey ranged for an addition of 11 Bcf to 30 Bcf. The build was very bearish compared to the 66 Bcf draw reported during the same week last year as well as the five-year average withdrawal of 24 Bcf, according to EIA data. It also marked the second-consecutive week the EIA number surpassed market expectations.
US supply and demand balances were considerably looser, featuring demand losses of 4.0 Bcf/d week over week, according to S&P Global Platts Analytics. Weaker consumption was the result of very mild temperatures driving residential and commercial space heating down by 4.7 Bcf/d. The soft demand resulted in some temporary production curtailments in the Northeast, as cash prices traded below $1.00/MMBtu.
Storage volumes now stand 293 Bcf, or 8%, more than the year-ago level of 3.665 Tcf and 231 Bcf, or 6.2%, more than the five-year average of 3.727 Tcf. The injection season has now extended one week further than usual.
The NYMEX Henry Hub December contract tumbled 14 cents to $2.574/MMBtu in trading following the release of the weekly storage report at 10:30 am ET. The remaining winter strip, January through March, lost 14 cents to average $2.67/MMBtu, a decline of more than 40 cents from one week prior.
Natural gas prices saw immense selling pressure this week, with winter 2020-21 prices off more than 30% relative to its year-to-date high established late last month. The sizeable declines have been driven by very mild realized and expected temperatures, with weather models forecasting mild temperatures to persist into December, according to Platts Analytics. Further stoking bearish sentiment is production, which in recent days has eclipsed 90 Bcf/d for the first time since the spring. Higher output is largely the result of Northeast and Haynesville producers ramping up production ahead of the winter.
Platts Analytics’ supply and demand model currently forecasts a 27 Bcf withdrawal for the week-ending Nov. 20, which would grow the surplus versus the five-year average by 10 Bcf as the heating season kicks off one week later than normal. Cooler, but still milder-than-normal temperatures, has boosted residential and commercial demand by 9.7 Bcf/d week over week.
Source: Platts
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