Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.52%
U.S. stocks were higher after the close on Thursday, as gains in the Oil & Gas, Technology and Financials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 0.52%, while the S&P 500 index climbed 1.18%, and the NASDAQ Composite index climbed 1.76%.
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The best performers of the session on the Dow Jones Industrial Average were Salesforce.com Inc (NYSE:CRM), which rose 3.28% or 6.95 points to trade at 218.82 at the close. Meanwhile, Microsoft Corporation (NASDAQ:MSFT) added 2.80% or 6.61 points to end at 242.38 and Visa Inc Class A (NYSE:V) was up 2.44% or 5.17 points to 216.90 in late trade.
The worst performers of the session were UnitedHealth Group Incorporated (NYSE:UNH), which fell 1.32% or 4.91 points to trade at 367.16 at the close. Johnson & Johnson (NYSE:JNJ) declined 0.94% or 1.54 points to end at 162.81 and Procter & Gamble Company (NYSE:PG) was down 0.88% or 1.19 points to 134.24.
The top performers on the S&P 500 were Diamondback Energy Inc (NASDAQ:FANG) which rose 10.48% to 81.19, Marathon Oil Corporation (NYSE:MRO) which was up 10.35% to settle at 11.79 and Cimarex Energy Co (NYSE:XEC) which gained 8.42% to close at 64.39.
The worst performers were CarMax Inc (NYSE:KMX) which was down 7.07% to 123.28 in late trade, PVH Corp (NYSE:PVH) which lost 4.50% to settle at 100.94 and Capri Holdings Ltd (NYSE:CPRI) which was down 3.33% to 49.30 at the close.
The top performers on the NASDAQ Composite were Uxin Ltd (NASDAQ:UXIN) which rose 69.23% to 1.980, Applied Molecular Transport Inc (NASDAQ:AMTI) which was up 45.13% to settle at 63.87 and Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPB) which gained 34.14% to close at 51.00.
The worst performers were AzurRx BioPharma Inc (NASDAQ:AZRX) which was down 23.88% to 1.020 in late trade, Recon Technology Ltd (NASDAQ:RCON) which lost 20.52% to settle at 5.150 and Akumin Inc (NASDAQ:AKU) which was down 17.57% to 3.05 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2465 to 633 and 63 ended unchanged; on the Nasdaq Stock Exchange, 2377 rose and 834 declined, while 67 ended unchanged.
Shares in Uxin Ltd (NASDAQ:UXIN) rose to 52-week highs; gaining 69.23% or 0.810 to 1.980.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 10.67% to 17.33 a new 52-week low.
Gold Futures for June delivery was up 0.85% or 14.60 to $1730.20 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in May rose 3.62% or 2.14 to hit $61.30 a barrel, while the June Brent oil contract rose 3.06% or 1.92 to trade at $64.66 a barrel.
EUR/USD was up 0.38% to 1.1772, while USD/JPY fell 0.08% to 110.61.
The US Dollar Index Futures was down 0.31% at 92.948.
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The dollar remained strong in early European trading Thursday, near multi-month highs amid expectations of strong U.S. economic growth, helped by more fiscal stimulus and an accelerating vaccine rollout.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% at 93.312, having hit a five-month high of 93.472 earlier.
USD/JPY rose 0.1% to 110.78, having risen to as high as 110.97, its highest level in a year. GBP/USD was down 0.1% at 1.3759, while the risk-sensitive AUD/USD fell 0.7% to 0.7544.
U.S. President Joe Biden unveiled his long awaited $2 trillion-plus infrastructure rebuilding plan on Wednesday, injecting more funds into the U.S. economy after his recently approved $1.9 trillion coronavirus relief package.
This comes with the U.S. economy already showing signs of a strong recovery as its aggressive vaccination program results in large parts of the country reopening.
The ADP report on Wednesday showed U.S. private payrolls increased by 517,000 jobs last month, a precursor to Friday’s official employment report which is expected to show another increase of around 650,000 payrolls in March.
A survey by the Institute for Supply Management on Thursday is expected to show a further improvement in the manufacturing activity.
This increased optimism in the U.S. dollar is best reflected against the euro, with EUR/USD down 0.1% at 1.1723, not far off the near five-month low of 1.170 after ECB President Christine Lagarde’s dovish interview on Wednesday.
Large parts of Europe are struggling with a third wave of the Covid-19 virus, shutting down much of the region, resulting in Germany’s retail sales dropping 9.0% on the year in February.
“The environment is clearly supportive for USD, particularly when Europe continues to battle with the third Covid wave,” said analysts at ING, in a note.
But “USD upside in Q2 should be more limited and European FX should eventually see some reversal,” ING added, as Europe’s vaccination process gathers pace while the American infrastructure spending is accompanied by around $1.8 trillion worth of tax hikes.
Elsewhere, USD/CNY rose 0.3% to 6.5715, after China released a disappointing Caixin Manufacturing PMI earlier in the day, reading 50.6 for March, the lowest level since April 2020, and a drop from February’s 50.9.
These findings contrast with those in an official survey, released Wednesday, which showed manufacturing activity grew at a stronger pace.
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Gold brushed highs of just above $1,730 an ounce on Thursday as U.S. Treasury yields and the dollar continued their retreat from recent highs.
Gold’s rally for a second straight day helped it rebound from its wrecking losses in two earlier sessions that dealt a severe setback to longs eyeing a return to $1,800 pricing.
In Thursday’s trade, benchmark gold futures on New York’s Comex settled up $12.80, or 0.8%, at $1,728.40 an ounce, after a session high at $1,731.05.
With Monday’s 1.8% jump, Comex gold has virtually recovered what it lost in the first two sessions of the week that hurtled the market to the $1,600 territory it had not visited since March 12. For the week, Comex gold was down just 0.2%.
The spot price of gold not far from the spot contract in futures. At 2:28 PM ET (18:28 GMT), spot gold was up $42.33, or 2.5%, to trade at $1,727.59, catching up with its lag to the futures market in recent days. Moves in spot gold are integral to fund managers who sometimes rely more on it than futures for direction.
The Dollar Index, which pits the greenback against six major currencies, slipped below the key bullish level of 93. Yields on the U.S. 10-year Treasury note also retreated to 1.68% from the week’s highs of 1.77%.
“Gold has a bottom in place,” said Ed Moya, U.S. markets analyst at online broker OANDA. “When the weaker dollar trade returns, this will likely coincide with a string of surging pricing pressures in the U.S. The consensus on Wall Street is still that inflation won’t materialize, but the risks are growing that it could.”
Gold had one of its best runs ever in mid-2020 when it rose from March lows of under $1,500 to reach a record high of nearly $2,100 by August, responding to inflationary concerns sparked by the first U.S. fiscal relief of $3 trillion approved for the coronavirus pandemic.
Breakthroughs in vaccine development since November, along with optimism of economic recovery, forced gold to close 2020 trading at just below $1,900.
Since the start of this year, the rut in the yellow metal has worsened despite the Biden administration issuing another Covid-19 relief of $1.9 trillion. The White House also unveiled on Wednesday President Joe Biden’s separate infrastructure spending plan for some $2 trillion.
In spite of the dollar debasement expected from all these relief measures, the greenback has rallied so far at the expense of gold, which strayed near bear market territory at least twice this month when it lost 20% from its August record highs.
Both the dollar and bond yields have surged this year on the argument that U.S. economic recovery from the pandemic could exceed expectations, leading to spiraling inflation as the Federal Reserve insists on keeping interest rates at near zero.
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Crude prices swung from green to red and back on Thursday before settling up more than 2% as traders bought into OPEC+’s assurances that the global oil producing alliance could manage with higher output from May, despite questionable demand.
London-traded Brent, the global benchmark for crude, settled up $1.32, or 2.1%, at $64.86 per barrel. It reached as high as $64.95 earlier, from a session low of $62.45.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled up $2.29, or 3.9%, at $61.45. WTI’s intraday high was $61.58 versus a low of $58.88.
Members of the 23-nation OPEC+, meeting via a two-day video hook-up, agreed to raise output by 350,000 barrels per day in May and June, and 400,000 bpd in July.
Saudi Arabia was initially reported to be considering another 250,000 barrels per day of cuts in May, and 250,000 bpd in June, to provide continued support to the market. It terminated that idea after reaching a consensus with the other producers that an output hike may not be a bad thing after all, especially if demand for crude spiked in the coming months, allowing the kingdom greater market share.
Since OPEC+ production cuts began a year ago, the Saudis have single-handedly led the reductions, conceivably allowing U.S. crude producers, who aren’t a part of the alliance, to grow their oil exports at the expense of the kingdom.
After weeks of remaining trapped at around 2.5 million bpd, U.S. crude exports jumped last week to 3.2 million bpd, data showed.
U.S. oil production also rose last week to 11.1 million barrels daily, suggesting that American energy firms were responding positively to crude prices trading at $60 per barrel or more. A daily production of 11 million barrels or lower had been the norm for the United States over the past few months.
The rise in U.S. crude production has been in tandem with the increase in the US oil rig count, as drillers put more rigs to work to extract additional supply. As of Friday, the rig count, which is a measure for future production, stood at 337. That was up 193, or 80%, from an August record low of 244.
Iran, which officially remains under Trump-era sanctions banning exports of its oil, has also been shipping with immunity to China since President Joe Biden came into office in January, those with knowledge of the matter say.
While Iran is a founding member of the original OPEC cartel, it has never contributed a single barrel to the production cuts of the past year due to the Trump sanctions. Its stepped up exports to China could thus be depriving other producers trying to legitimately grow their oil sales.
“If anything, the Biden administration could move soon to do a deal with the Iranians that would officially remove the sanctions on them, and it might be prudent for the Saudis to try and increase their market share ahead of that,” said Tariq Zahir, crude trader at New York macro fund Tyche Capital Advisors.
Saudi Oil Minister Abdulaziz bin Salman seemed to acknowledge the weight of Iran’s role in the matter when he told reporters after the OPEC+ meeting that once Iran returns to pre-sanctions output, “we may remove the limit” on production.
Goldman Sachs (NYSE:GS) global head of commodities research Jeff Currie, meanwhile, predicted that Brent will hit $80 a barrel by the third quarter. Such lofty projections have often led to a crash instead.
Whatever the case, the diverse factors in play sent oil prices all over the place on Thursday, with the market rallying more than $2 a barrel, after dropping nearly $1 earlier.
Since April last year, OPEC+ – made up of the 13-member Saudi-led OPEC, or Organization of the Petroleum Exporting Countries, and 10 non-OPEC nations steered by Russia – has withheld at least 7.0 million barrels per day of supply from the market.
Those cuts helped WTI rise from a little under $36 per barrel on Oct. 30 to just below $68 by March 8. Brent went from beneath $38 to just above $71 in that same stretch. But over the past fortnight, the two benchmarks have lost about 10% from those highs.
Russian Deputy Prime Minister Alexander Novak told the OPEC+ meeting that global oil demand was anticipated around 5.0- 5.5 million bpd this year.
But while the alliance’s production cuts had slashed much of the Covid-19 related oil glut seen from March 2020, oil stocks remained above the 2015-2019 level, an OPEC+ document circulated at the meeting said.
The rollout of coronavirus vaccines and supply curbs had underpinned the oil rally of the past four months. But that’s fraying now on concerns that near-term consumption was at risk, particularly in Europe where France has announced a new month-long lockdown.
Mohammad Barkindo, secretary-general of the Organization of Petroleum Exporting Countries, pointed this week to the market’s recent volatility as “a reminder of the fragility facing economies and oil demand.”
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Natural Gas (Hellenic Shipping News)
Regional US inventories have been strengthening, with the deficit narrowing to the five-year average as US gas demand has remained muted with above-average temperatures across the country, in addition to dry production remaining resilient after rebounding from the winter storm freeze-offs seen just a few weeks ago.
Midwest and Midcontinent
Total Midcontinent demand has been trending lower year on year with warmer temperatures. Demand so far this March has averaged 17.03 Bcf/d, 16% below last year, while temperatures have averaged 7 degrees above normal, according to S&P Global Platts Analytics. Both power and residential demand have seen declines year on year with power falling 1.3 Bcf/d and heating 1.9 Bcf/d, currently sitting about 2 Bcf/d below the three-year average.
Adding to this bearish sentiment, SCOOP/STACK production has fully recovered from freeze-offs in February and has exceeded pre-cold snap output. Before the winter storm SCOOP/STACK production was 3.6 Bcf/d before dropping to a three-year low then recovering to its current average of 3.7 Bcf/d, Platts Analytics recorded. Modeled production in the Midcon Producing has increased above January and February averages, sitting at 8.57 Bcf/d and 3% above the five-year average.
Storage in the Midcon Producing moved below last year levels last month but has since flipped to a surplus with stronger production and weaker demand. Midcon Producing storage has reached 142 Bcf as of March 24, about 20 Bcf above levels at this time last year and 7% above the five-year average, Platts Analytics data showed. However, Upper Midwest storage sits at a 46 Bcf deficit to last year while remaining 17% above the five-year average.
Spot prices in the Midcontinent have lowered since the beginning of March as Chicago city-gates moved down 17.5 cents to $2.47/MMBtu in March 23 trading. Natural Gas Pipeline-Midcontinent Pool also fell 26 cents over the same period to $2.26/MMBtu.
Northeast
Total residential-commercial demand in the Northeast has seen significant declines as temperatures are expected to sit roughly 14 degrees F above average over the next few days, with heating demand falling to 6 Bcf/d March 25, down by more than 50% from one week prior.
While total gas demand remains muted in the Northeast, dry gas production has jumped above 33 Bcf/d this week, adding additional pressure to gas prices in the region.
Algonquin city-gates was trading 24 cents lower in ICE preliminary trading on March 24 to $1.91/MMBtu, the lowest level seen this year-to-date.
According to S&P Global Platts Analytics, Northeast demand is forecast to stay below 20 Bcf/d through the balance of March, averaging 18.3 Bcf/d, roughly 6.5 Bcf/d weaker than average demand observed this month, which should help slow withdrawals from depleted inventories in the final days of the withdrawal season.
Dominion inventories are currently at a 200 MMcf/d surplus to the five-year average while Columbia Gas inventories sit at a 14 Bcf deficit to the five-year average.
Texas and Southeast
Power demand for Texas and the Southeast has averaged 11.05 Bcf/d so far this month. This level was nearly 2.25 Bcf lower than what power demand was at this time last year, according to Platts Analytics. Power demand has averaged 12.46 Bcf/d year-to-date, 8% lower than what demand averaged in 2020.
Also adding downward pressure to gas demand, wind generation has averaged nearly 40% of the supply stack in ERCOT this month, 11% higher than levels that the market saw in February, according to Platts Analytics.
The cash price for Houston Ship Channel increased 1 cent on the day at $2.39/MMBtu. This level was 3 cents lower than what HSC has averaged so far this month.
As the region has faced lower demand, total Southeast and Texas storage inventories have grown nearly 40 Bcf this month, pushing over 580 Bcf to start the week of March 22, according to Platts Analytics.
At current levels, inventories are 130 Bcf lower year on year but only 65 Bcf below the five-year average, considerably closing the 144 Bcf deficit to the five-year seen in mid-February, according to Platts Analytics.
West
The storage surplus in the Mountain region has increased from 3.5% for the week ended March 5 to 6.5% for the week ended March 12. Gas production in the Rockies recovered quickly from mid-February levels, even as regional gas demand trails year-ago levels.
In contrast to the other regions, the Pacific region’s storage surplus to the five-year average has shrank further over the last several weeks, falling to a year-to-date low of 7% for the week ended March 12 from 9.9% for the week ended Feb. 26. The continued storage depletion can partly be explained by weaker hydropower generation in the Northwest, which has created room for additional gas-fired power generation, according to data published by the Bonneville Power Administration, or BPA. Hydropower generation in the BPA footprint has averaged 174 MWh/d for March, substantially lower than the 218 MWh/d averaged in February and 239 MWh/d averaged in January.
Source: Platts
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