Written by Investing.com Staff, Investing.com
U.S. stocks mixed at close of trade; Dow Jones Industrial Average up 0.41%
U.S. stocks were mixed after the close on Friday, as gains in the Basic Materials, Financials and Oil & Gas sectors led shares higher while losses in the Consumer Goods, Consumer Services and Technology sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average rose 0.41% to hit a new all time high, while the S&P 500 index climbed 0.17%, and the NASDAQ Composite index fell 0.40%.
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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 3.52% or 13.52 points to trade at 397.82 at the close. Meanwhile, JPMorgan Chase & Co (NYSE:JPM) added 2.84% or 4.35 points to end at 157.50 and Dow Inc (NYSE:DOW) was up 1.64% or 1.00 points to 62.00 in late trade.
The worst performers of the session were Amgen Inc (NASDAQ:AMGN), which fell 1.63% or 3.81 points to trade at 230.18 at the close. Home Depot Inc (NYSE:HD) declined 0.99% or 3.31 points to end at 329.80 and Procter & Gamble Company (NYSE:PG) was down 0.81% or 1.15 points to 141.35.
The top performers on the S&P 500 were Corteva Inc (NYSE:CTVA) which rose 7.96% to 44.74, Macy’s Inc (NYSE:M) which was up 6.24% to settle at 18.56 and DXC Technology Co (NYSE:DXC) which gained 6.09% to close at 41.08.
The worst performers were Expedia Inc (NASDAQ:EXPE) which was down 7.93% to 148.88 in late trade, Flowserve Corporation (NYSE:FLS) which lost 6.27% to settle at 40.20 and Illumina Inc (NASDAQ:ILMN) which was down 3.74% to 496.38 at the close.
The top performers on the NASDAQ Composite were Kaixin Auto Holdings (NASDAQ:KXIN) which rose 87.43% to 3.130, Sphere 3D Corp (NASDAQ:ANY) which was up 40.41% to settle at 4.830 and Westport Fuel Systems Inc (NASDAQ:WPRT) which gained 28.39% to close at 5.020.
The worst performers were Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) which was down 28.14% to 27.25 in late trade, icad inc (NASDAQ:ICAD) which lost 23.70% to settle at 11.75 and Y mAbs Therapeutics (NASDAQ:YMAB) which was down 21.58% to 29.26 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1886 to 1268 and 132 ended unchanged; on the Nasdaq Stock Exchange, 1820 rose and 1669 declined, while 153 ended unchanged.
Shares in Goldman Sachs Group Inc (NYSE:GS) rose to all time highs; rising 3.52% or 13.52 to 397.82. Shares in Sphere 3D Corp (NASDAQ:ANY) rose to 52-week highs; up 40.41% or 1.390 to 4.830.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 6.54% to 16.15 a new 1-month low.
Gold Futures for December delivery was down 2.57% or 46.45 to $1762.45 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in September fell 1.42% or 0.98 to hit $68.11 a barrel, while the October Brent oil contract fell 1.09% or 0.78 to trade at $70.51 a barrel.
EUR/USD was down 0.60% to 1.1761, while USD/JPY rose 0.46% to 110.25.
The US Dollar Index Futures was up 0.57% at 92.782.
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The dollar jumped Friday, underpinned by move higher in U.S. Treasury yields after a better-than-expected monthly jobs report stoked expectations the Federal Reserve will begin to tighten policy sooner rather than later.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.59% to 91.69, as U.S. bond yields gained, with the 10-yield rate trending close to 1.3%.
“[W]e continue to see the risks skewed towards earlier Federal Reserve stimulus withdrawal with a QE tapering announcement before year end and the first interest rate hikes coming next year,” ING said in a note following a better-than-expected U.S. jobs report released Friday.
The U.S. economy created 943,000 jobs in July, above forecasts for a gain of 870,000, while the unemployment rate fell to 5.4% from 5.9%.
Average hourly earnings rose to 4% to from 3.7% as employers were forced to hike wages to attract new workers amid dearth in labor supply. The trend of rising wages is expected to continue, and could keep inflation higher for longer.
If the Fed fails to act quell inflation, then it runs the risk of policy misstep.
“The recovery in employment is getting to a place where the Fed needs to seriously consider tapering its asset purchases to avoid an unnecessary overshoot on inflation,” The economy has become more resilient through outbreaks. That ups the risk of a misstep and the need for the Fed to extinguish unwanted inflation, something it has not had to do in decades.
The dollar has been raking up gains after bottoming in May, but there are some signs that investors are pausing their bullish bets on the greenback.
Speculators’ net long positions on the dollar were cut in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.
The value of the net long dollar position was $2.11 billion for the week ended Aug. 3, compared with a net long bets of $2.99 billion for the prior week.
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Gold had its worst day and week in almost two months, crumbling to $1,750 lows, as the dollar sprung back from a recent spate of selling amid a resilient U.S. jobs report that again raised questions about the stimulus provided by the Federal Reserve to markets and the economy.
“It’s the vengeful dollar,” said Philip Streible, precious metals strategist for Blueline Futures in Chicago. “DX is coming back in a way that’s delivering an excruciating blow to most commodities today.”
DX, the trading symbol for the Dollar Index, was up 0.6% at 92.81 by 1:30 PM ET (17:30 GMT) as gold futures on New York’s Comex settled. It hit a near two-week high at 92.85 earlier, after tumbling to a one-month low of 91.82 earlier in the week.
Gold’s front-month futures on Comex settled down $43.40, or 2.5%, at $1,763.10 an ounce. For the week, it fell 3%.
A hedge against economic and political troubles as well as inflation, gold got a break just last week when Federal Reserve Chair Jerome Powell said the central bank wasn’t ready to raise U.S. interest rates yet as it was still focused on supporting a nation recovering from the coronavirus pandemic.
Powell also refused to go near any talk of when the Fed might consider tapering the combined $120 billion the Fed was plonking each month into Treasury bonds and agency mortgage‑backed securities.
Getting toward the Fed’s twin mandates of maximum employment for Americans and sustainable inflation were the goals, he reasoned.
The Fed’s lower-for-longer rates and indefinite stimulus for now might, however, be debated again after the U.S. July jobs report issued on Friday cited the creation of 943,000 new jobs that brought unemployment down to 5.4%. Economists tracked by Investing.com had projected just 870,000 new jobs for July, and a jobless rate of 5.7%.
Since January, gold has been on a tough ride that 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 and forth between $1,700 and $1,800.
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Oil posted its worst weekly loss in nine months as a soaring dollar on Friday hobbled any attempt by crude prices to rebound on Mideast tensions, after a week of negative news on Covid.
New York-traded U.S. West Texas Intermediate crude, the benchmark for U.S. oil, settled Friday’s trade down 81 cents, or 1.2%, at $68.28 per barrel. For the week, WTI lost 7.7%, its most since the 10% drop during the week to Oct. 23, 2020.
London-traded Brent, the global benchmark for oil, was down 85 cents, or 1.2%, at $70.44 per barrel by 2:55 PM ET (18:55 GMT). Brent lost almost 8% for the week, also its biggest weekly decline in nine months.
Oil and most other commodities tumbled as the dollar sprung back from a recent spate of selling as a resilient U.S. jobs report for July raised questions about the continuance of the stimulus provided by the Federal Reserve to markets and the economy. Since the COVID outbreak of March 2020, the Fed has been buying Treasuries and other assets to the monthly tune of $120 billion to support the U.S. recovery from the pandemic.
“A stronger dollar will likely prove to be a big drag over crude prices in the short-term,” said Ed Moya, who heads research for the Americas at New York-based broker OANDA.
Crude prices were down for the first three days of the week amid a global surge in coronavirus cases from the Delta variant that cast a pall over the outlook for oil demand.
In the United States, the world’s biggest oil consumer, Covid cases hit a six-month high with more than 100,000 infections reported earlier this week, according to a Reuters tally.
Crude prices did manage to catch a break on Thursday on Mideast tensions as Israeli jets struck purported rocket launch sites in Lebanon in response to an earlier attack, allegedly by Tehran. That was before the dollar’s rebound on Friday, which put paid to any further rebound in oil.
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IHS Markit: Natural Gas Is Crucial In Energy Transition
Natural gas could become a pillar of emissions reduction both in the near and long term, IHS Markit said in a new study this week.
While many analysts and net-zero advocates have started to question the role of natural gas in global emissions reductions, IHS Markit has a different view.
According to the study, ‘A Sustainable Flame: The Role of Gas in Net Zero,’ natural gas could support in the short term early action of switching from the more polluting coal and oil. More importantly, in the longer term, gas infrastructure could act as a “pre-build” for carrying low-carbon fuels.
“The inherent versatility of gas infrastructure – particularly its ability to be converted to carry low-carbon fuels in the future – creates an opportunity for gas to be a “second pillar of decarbonization” over the long-term,” IHS Markit said in a press release.
In the long term, gas could be used in many sectors – including power generation, steel production, trucks, hydrogen production, and ammonia production – to cut emission intensity, the analytics firm said.
While costs would vary widely, many of the proposed uses of natural gas could be viable with a carbon price between $40 and $60 per ton, which would be close to levels already found in some markets today, according to IHS Markit.
“Repurposing infrastructure has technical challenges but the costs, while significant, are still lower than building entirely new facilities,” said Shankari Srinivasan, vice president, global and renewable gas at IHS Markit.
“Renewable capacity will continue to grow, electrification will broaden its reach and improvements in battery storage will make a decarbonized grid more reliable,” Michael Stoppard, chief strategist, global gas, IHS Markit, said.
“But the transition to a low-carbon gas supply will also be needed to serve the sectors beyond the reach of electrification and wires,” Stoppard added.
By Charles Kennedy for Oilprice.com
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Analysis-Winter is coming: temperature extremes fuel global gas rally (Reuters)
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