by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.30%
U.S. stocks were higher after the close on Friday, as gains in the Financials, Basic Materials and Oil & Gas sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 1.30% to hit a new all time high, while the S&P 500 index climbed 1.13%, and the NASDAQ Composite index gained 0.98%.
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The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc (NYSE:GS), which rose 3.61% or 12.94 points to trade at 371.88 at the close. Meanwhile, JPMorgan Chase & Co (NYSE:JPM) added 3.22% or 4.86 points to end at 155.80 and The Travelers Companies Inc (NYSE:TRV) was up 3.19% or 4.74 points to 153.26 in late trade.
The worst performers of the session were Salesforce.com Inc (NYSE:CRM), which fell 0.31% or 0.75 points to trade at 245.05 at the close. Merck & Company Inc (NYSE:MRK) declined 0.17% or 0.13 points to end at 77.99 and Procter & Gamble Company (NYSE:PG) was up 0.04% or 0.05 points to 137.03.
The top performers on the S&P 500 were Macy’s Inc (NYSE:M) which rose 6.81% to 18.66, Nordstrom Inc (NYSE:JWN) which was up 6.66% to settle at 36.01 and Discover Financial Services (NYSE:DFS) which gained 6.19% to close at 122.40.
The worst performers were Biogen Inc (NASDAQ:BIIB) which was down 2.99% to 358.02 in late trade, ResMed Inc (NYSE:RMD) which lost 1.23% to settle at 247.65 and Baxter International Inc (NYSE:BAX) which was down 1.12% to 80.42 at the close.
The top performers on the NASDAQ Composite were SGOCO Group Ltd (NASDAQ:SGOC) which rose 279.07% to 9.780, Stampscom Inc (NASDAQ:STMP) which was up 63.95% to settle at 324.17 and Tempest Therapeutics Inc (NASDAQ:TPST) which gained 49.38% to close at 15.6700.
The worst performers were Nova Lifestyle I (NASDAQ:NVFY) which was down 27.69% to 4.700 in late trade, Sigilon Therapeutics Inc (NASDAQ:SGTX) which lost 25.65% to settle at 6.87 and Alterity Therapeutics Ltd (NASDAQ:ATHE) which was down 18.32% to 1.6500 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2559 to 622 and 109 ended unchanged; on the Nasdaq Stock Exchange, 2690 rose and 764 declined, while 143 ended unchanged.
Shares in SGOCO Group Ltd (NASDAQ:SGOC) rose to 5-year highs; gaining 279.07% or 7.200 to 9.780. Shares in Stampscom Inc (NASDAQ:STMP) rose to all time highs; gaining 63.95% or 126.45 to 324.17. Shares in Sigilon Therapeutics Inc (NASDAQ:SGTX) fell to all time lows; losing 25.65% or 2.37 to 6.87.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 14.84% to 16.18.
Gold Futures for August delivery was up 0.47% or 8.45 to $1808.65 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in August rose 2.37% or 1.73 to hit $74.67 a barrel, while the September Brent oil contract rose 2.02% or 1.50 to trade at $75.62 a barrel.
EUR/USD was up 0.32% to 1.1880, while USD/JPY rose 0.31% to 110.12.
The US Dollar Index Futures was down 0.33% at 92.102.
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The dollar is winning over some of its detractors who have been pushed off the bearish bandwagon after the Federal Reserve’s hawkish tilt started the countdown on policy tightening much earlier than expected.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.29% to 92.37.
The dollar has racked up gains since hitting a bottom in May, but for many, this run higher would turn out to be nothing more than relief rally, and losses would soon follow in the second half of the year as the downtrend resumes.
The dollar has racked up gains since hitting a bottom in May, but for many, this run higher would turn out to be nothing more than relief rally, and losses would soon follow in the second half of the year as the downtrend resumes.
The crux of the bearish bet centered around the Federal Reserve’s ultra loose monetary policy staying intact, while the European and global economy continued to recover. Unfortunately, caught wind of the faster pace of inflation, and made a hawkish pivot that has rocked the short dollar bet.
ING on Thursday slashed its outlook on the EUR/USD to $1.23 from $1.28, conceding that its bet on weaker dollar into the back of the year was unlikely to take shape.
“On the assumption that the Fed starts formally tightening in 3Q22, it would be no surprise to see a bearish flattening of the US yield curve – preparing for the Fed to apply the monetary brakes – from 2Q22 onwards,” ING said in a note. “That is when we would expect the dollar to embark on a broad rally.”
For the months, the Federal Reserve shrugged off the turn up in the pace of inflation as transitory, and said it would let it run above target for some time under its new average inflation targeting regime. But the central bank’s resolve to persist with this regime change was tested when inflation hit the highest levels in years.
“What has changed is that the Fed looks less committed to Average Inflation Targeting and more towards a conventional lift-off in rates which could come as early as autumn 2022,” ING said in a note. “This assumes the Fed starts tapering shortly after the August Jackson Hole gathering – a tapering process that could last until spring/summer ’22.”
The Fed’s worries over inflation were a hot topic in their June meeting.
“Although they generally saw the risks to the outlook for economic activity as broadly balanced, a substantial majority of participants judged that the risks to their inflation projections were tilted to the upside because of concerns that supply disruptions and labor shortages might linger for longer and might have larger or more persistent effects on prices and wages than they currently assumed,” the Fed’s minutes showed.
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Gold posted a third straight weekly gain on Friday, returning to crucial $1,800 support. But outlook for the yellow metal’s fans remained muddy, with no certainty on how long it will take for the much-touted U.S. inflation to accelerate its gains.
Front-month gold futures on New York’s Comex settled at $1,810.60, up $10.40, or 1.5% on the day.
The benchmark gold futures has gained around $40, or 2.3%, since its last negative weekly close four weeks ago, when it also tumbled to a two-month low of $1,761.20.
Gold’s rise on Friday was fueled by a weaker dollar. Both the U.S. currency and yields work in contrary mode to the precious metal.
“Gold is tentatively stabilizing above the psychological $1,800 level and that could open the door for a stronger rebound next week,” said Ed Moya, head of U.S. research at online broker OANDA.
Yet, there was no certainty about how much impact current inflationary trends in the United States will have on gold, which is generally branded as a hedge against rising pressure prices, Moya said.
“Investors will closely await Tuesday’s inflation report and kickoff to earnings season,” he said, referring to the June update for the Consumer Price Index, which hit a 13-year high of 5% in the 12 months to May.
Conviction has become a rare commodity in gold as the average long investor tried to stay true to the yellow metal through its travails of the past six months.
Since January, gold has been on a tough ride that actually began in August last year – when it came off record highs above $2,000 and meandered for a few months before stumbling into a systemic decay from November, when the first breakthroughs in COVID-19 vaccine efficiencies were announced. At one point, gold raked a near 11-month bottom at under $1,674.
After appearing to break that dark spell with a bounce back to $1,905 in May, gold saw a new round of short-selling that took it back to $1,800 levels before talk of monetary tightening by the Federal Reserve knocked it even lower to mid-$1,700 levels.
For the record, the Fed has indicated that it expects two hikes before 2023 that will bring interest rates within a range of 0.5% to 0.75% from a current pandemic-era super-low of zero to 0.25%. It has not set a timetable for the tapering or complete freeze of the $120 billion in bonds and other assets it has been buying since March 2020 to support the economy through the Covid crisis.
That hasn’t, however, stopped senior bankers on the central bank’s all-important FOMC, or Federal Open Market Committee, from commenting on the likelihood of a taper or rate hike in their public speeches. Typically, each hawkish speech on a taper or rate hike by a Fed official ends up hammering gold more than than a dovish comment would lift it.
Also, amazingly lost in the whole transition is gold’s position as a hedge against inflation despite trillions of dollars of government spending since the outbreak of the pandemic.
The Fed’s preferred inflation gauge, the Personal Consumption Expenditure Index, meanwhile, grew by a multi-year high of 3.4 percent in the 12 months to May.
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Crude oil prices climbed higher Friday, helped by signs of strong demand in the world’s largest consumer even amid concerns about the spread of the delta variant of the Covid-19 virus.
By 9:45 AM ET (1345 GMT), U.S. crude futures traded 1.6% higher at $74.07 a barrel, while the Brent contract rose 1.3% to $75.05.
U.S. Gasoline RBOB Futures were up 1.5% at $2.2895 a gallon.
Helping the tone Friday was the announcement late Thursday from the U.S. Energy Information Administration that the country’s crude inventories fell by just under 7 million barrels last week, while fuel demand soared to 10 million barrels a day in the week ahead of the July 4 national holiday.
This highlighted the recovery in consumption in America, the world’s largest user of petroleum, that’s underpinned this year’s crude rally.
Additionally, oil demand in India, the world’s third largest consumer, recovered significantly in June, according to official data, although it was still 7.6% below the levels seen in June 2019.
That said, the two benchmark crude contracts are on course to post declines of approaching 2% this week, the first weekly decline since mid-May. This follows growing concerns over the ability of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, to keep its discipline after failing to agree to a production deal earlier this week due to a fight over market share.
“In the absence of an agreement, we think members will increase output and we’ll see the breakdown of a broader deal, which would suggest weaker prices in the longer run,” said ING analyst Warren Patterson, in a note.
Prices have also been pressured by the further spread of the Covid-19 virus, in particular the highly-transmissible delta variant, and the impact this could have on the global recovery.
Japan has declared a state of emergency around its capital Tokyo, meaning no spectators at the upcoming Olympic Games, while a number of southeast Asian countries are struggling with record high caseloads and deaths. But cases are also growing in the countries with highly vaccinated populations, including the U.K. and the U.S.
Later Friday will see the weekly release of the Baker Hughes total of working U.S. oil rigs as well as the CFTC crude oil net speculative positions.
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- US gasoline stocks move sharply lower as demand hits all-time high (Hellenic Shipping News)
Natural Gas (Hellenic Shipping News)
China to use more natural gas in energy mix to 2035 – CNPC
China National Petroleum Corp (CNPC) expects China to cut its coal use to 44% of energy consumption by 2030 and 8% by 2060 as the country aims to use more natural gas to achieve its climate change goals.
China, the world’s biggest coal consumer, is expected to increase the use of natural gas in its primary energy mix to 12% in 2030 from 8.7% in 2020, said Zhu Xingshan, senior director, Planning Department CNPC at a conference on Thursday.
He added that the share of natural gas in energy consumption is expected to increase “significantly” from 2030 to 2035.
China, the world’s largest energy consumer and biggest emitter of climate warming greenhouse gases, has vowed to bring its total carbon emissions to a peak before 2030 and to be carbon neutral by 2060.
Natural gas is expected to be a key bridge fuel over the next two decades, CNPC has said.
The energy giant expects coal to make up 44%, petroleum at 18%, natural gas at 12% and non-fossil fuel to make up 26% of the total energy mix in 2030.
The estimates for 2060 were coal at 8%, petroleum at 6%, natural gas at 11% and non-fossil fuel at 75% of the total energy mix.
China lowered the share of coal use in its primary energy mix to 56.8% in 2020, from around 68% at the beginning of the previous decade and expects this share to fall to below 56% in 2021.
Source: Reuters (Reporting by Emily Chow; Writing by Shivani Singh; Editing by Stephen Coates)
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- Gas infrastructure across Europe leaking planet-warming methane (Hellenic Shipping News)
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