Crude Oil Supplies Continue to Grow While Natural Gas Demands Increase

Crude Oil Supplies Continue to Grow While Natural Gas Demands Increase
Crude Oil Supplies Continue to Grow While Natural Gas Demands Increase
Crude oil demand continues to wane while production continues to increase pushing prices to recent lows. Crude oil is down on Tuesday morning by another 20 cents trading at 93.48 while brent crude fell below the 108 level to trade at 107.96 off by 25 cents. The spread continues to widen moving towards the $15 differential. The US dollar has eased over the past two days, but does not seem to be helping support oil prices as the global glut continues to deepen. Crude oil prices fell on Monday as investors awaited the meet between Iran and western nations starting Nov 20 on a possible deal on the nuclear program. Over the weekend, US President Obama said that he would support an easing of sanctions against Iran as a first step in improving the relations with the West and opening Iran’s nuclear projects to inspection. All indications are that we should see the first steps completed at this week’s meeting. This would open Iran oil to the global marketplace increasing international supplies and would weigh heavily on brent oil prices.

Also, Saudi crude production rose close to 10 million bpd, the highest average level sustained over a four-month period. Rising production from Saudi Arabia amid the shale gas boom and soaring inventories in US have put additional pressure on crude prices, ignoring the supply disruptions from Libya. Russia expects its 2014 oil output, the world’s largest, to meet or slightly exceed the 520 million tons forecast this year, Anatoly Yanovsky, deputy minister at the Russian Ministry of Energy, told Reuters on Monday.

Nymex crude oil prices declined around 0.9 percent yesterday on the back of estimates of decline in demand for fuel after statement from Federal Reserve Bank of New York President William C. Dudley added to speculation that the central bank will reduce stimulus. Further, mixed market sentiments exerted downside pressure on prices. The American Petroleum Institute is scheduled to release its weekly inventories later today and US crude oil inventories are expected to increase by 0.1 million barrels for the week ending on 15th November 2013. Gasoline stocks are expected to gain by 0.2 million barrels and distillate inventories are expected to slip by 0.4 million barrels for the same week. Traders will wait for Wednesday official inventory release from the EIA but any climb in stocks will weigh heavily on prices.

Natural gas continued to climb this morning making a surprise chart upwards over the past few days. Natural gas is trading at 3.621 as cold weather continues across the US, signs of an early winter increasing heating days for the year. U.S. natural gas futures ended lower on Monday as profit booking emerged at resistance levels. Prices are expected to remain in range today. 

The EIA, OPEC, Obama And Iran All In Play

The EIA, OPEC, Obama And Iran All In Play
The EIA, OPEC, Obama And Iran All In Play
Crude oil declined as the markets opened for a new week, dropping 21 cents to trade at 94.28 while Brent oil only gave up 7 cents to trade at 108.30. The spread widened to $14.00 well passed its average gap of $12.00 indicating that WTI crude oil might be getting ready to climb. “The Brent premium could easily continue to grow because of the North American supply picture,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “I would hate to stand in front of a runaway train, which is what the WTI-Brent spread is right now.” WTI crude oil prices dipped around 0.8 percent in the last week on the back of rising trend in API and US crude oil inventories. In the U.S., the world’s biggest oil consumer, crude stockpiles rose to 388.1 million barrels in the seven days ended Nov. 8 as output surged to the highest rate since January 1989, the Energy Information Administration said last week. The EIA is the Energy Department’s statistical arm. The EIA expectations that US to be world’s biggest crude oil producer by 2015 exerted downside pressure on prices. Additionally, a surprising decline in GDP data from Eurozone led to estimates of decline in demand for fuel acted as a negative factor.

 At the end of the week statement from Federal Reserve nominee Janet Yellen to continue with stimulus measures until improvement is seen in US economy coupled with weaker DX cushioned sharp downside in prices. Crude oil prices touched a weekly low of $92.51.

News from OPEC in the Joint Organizations Data Initiative (JODI), data published over the weekend showed that Saudi Arabia exported the most oil in last eight years. Saudi Arabia produced around 10.12 million barrels in October as against 7.84 million barrels in September increasing the global supplied and weighing on Brent oil prices.

Brent oil rose 3.2 percent this week after a meeting between Iran and Western Allies concluded last weekend in Geneva without coming to an agreement on the nation’s nuclear program, tempering projections of a resolution to the dispute that has cut Iranian oil exports. The talks with the five permanent members of the UN Security Council and Germany will resume Nov. 20.  Brent oil is more sensitive to potential changes in Middle East output than WTI because Europe depends more on the region’s production. President Barack Obama commented at a White House news conference that he supports giving Iran “modest” relief on sanctions in exchange for progress on nuclear talks and urged Congress to hold off on imposing more economic penalties.

Natural gas is trading at 3.681 adding 33 points this morning as the US turns cold over the weekend, increasing residential demand for heating. On a weekly basis, Nymex natural gas prices gained around 0.4 percent on the back of forecast for cooler winter weather conditions. Also a less than expected rise in inventories supported an upside in prices.  Additionally, weakness in the US dollar index acted as a positive factor. Gas prices touched a weekly high of $3.667 and closed at $3.534 in last trade of the week.

Base Metal, Precious Metals and Industrial Metals React To Janet Yellen

Base Metal, Precious Metals and Industrial Metals React To Janet Yellen
Base Metal, Precious Metals and Industrial Metals React To Janet Yellen

Base metals continue to trade with a negative bias. Silver and copper have rebounded from recent lows this morning after taking major tumbles this week. Silver has added 356 points to trade at 20.789 well below its have range at $22.00 while copper rebounded adding 20 points to trade at 3.179 below its near term trading range at 3.25. Industrial metals have been steadily falling on worries from China and the possibility of tapering of asset purchases by the US FOMC in December.

Copper tumbled to its lowest level in 90 days after a Federal Reserve official raised the prospect of a retreat from monetary stimulus next month. Uncertainties about policy reforms in China and weak eurozone factory output also weighed on the metal. Copper prices fell on Wednesday as disappointment from the Chinese Communist Party meet and looming market surplus weighed on prices. Eurozone industrial production fell by 0.5% from growth of 1% in the previous month, which also hurt base metals prices. Base metals are expected to move down as investors are likely to remain cautious ahead of Yellen’s testimony and Eurozone GDP data today.

Copper on the London Metal Exchange closed down 2 percent at $6,980 a ton, after touching a low of $6,956, the weakest since Aug. 7. Copper extended losses from the previous session when it broke through its 100-day moving average of $7,118. The move lower sent the market crashing through the floor of a $7,000 to $7,420 range it had held since early August.

Gold saw a mini rally in the Asian session this morning gaining $15.50 as traders took advantage of the lower US dollar and cheap prices to buy up the shiny metal. Gold prices fell on Wednesday as gains in US equities dented gold’s safe haven appeal. However, a weaker dollar after the Fed Chairman nominee Janet Yellen supported Fed’s stimulus program and said that the economy and the labor market were performing far short of their potential while inflation remained low limited the downside in prices. Yellen is likely to testify before the Senate Banking Committee today. Gold prices are expected to remain in range today as investors are likely to remain cautious ahead of Yellen’s testimony which would give cues on the Fed’s future course of monetary policy.

The other factor pushing up gold is demand from China, where volumes on the Shanghai exchange were near a month’s high on Wednesday. A bearish factor could be paring of holdings in gold in exchange-traded funds. SPDR Trust, the world’s biggest gold exchange-traded funds, reported that the holdings fell to 865.71 tons.

After a fairly muted response at the beginning of the week, platinum prices were boosted by South African supply concerns before better-than-expected US economic data towards the end of the week acted to dampen prospects for platinum. Platinum has climbed $10.95 this morning to trade at 1443.70. A wage-related strike called by the National Union of Mineworkers (NUM) at Northam Platinum saw 7,000 workers down tools at the company’s Zondereinde operations over the weekend. Initially this seemed to have little impact as the platinum price started the week at $1455, lower than it had ended the previous week. Palladium gained $4.80 as auto sales were once again climbing in the US. Palladium proved more resilient, shrugging off news that US car and light-truck sales in October declined to the lowest annualized rate since April.

The International Energy Agency Issues An Interesting Report For Crude Oil & The US

The International Energy Agency Issues An Interesting Report For Crude Oil & The US
The International Energy Agency Issues An Interesting Report For Crude Oil & The US
Crude oil remains well below its recent trading ranges but within the predicted EIA price range prior to the tensions in the Middle East. During the late summer, the EIA issued a forecast for crude oil to trade for the balance of the year (average) in the 94.00 price range. This became distorted after the Egyptian political turmoil followed by strikes in Libya and then chemical weapons in Syria. Crude oil has now returned to the forecast trading range and is expected to hold at this range for the balance of the year. Crude oil is trading at 93.10 this morning up a few cents as the US dollar eased. The official EIA government data might show crude stocks rising by under a million barrels for the week ended 9th November. US crude inventories are expected to rise to 386.2 million barrels according to a survey by Bloomberg. Product-related stocks, gasoline inventories are seen falling by 900,000 barrels whereas distillate supplies are seen dropping by nearly a million barrels. This week’s EIA inventory report usually due on Wednesday has been delayed by one day as Monday was a legal holiday in the US. Traders will have to wait until Thursday to get the official data.  

The International Energy Agency said that America will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next two decades, amid booming output from shale formations. Crude prices will advance to $128 a barrel by 2035 with a 16 percent increase in consumption supporting the development of so-called tight oil in the U.S. and a tripling in output from Brazil, the IEA said today in its annual World Energy Outlook. The role of the Organization of Petroleum Exporting Countries will recover in the middle of the next decade as other nations struggle to repeat North America’s success with exploiting shale deposits, the agency predicted.

News yesterday showed that OPEC increased its global demand forecast by 34,000 barrels a day and projected that global demand for OPEC crude will decline by 300,000 barrels a day next year. OPEC appeared to backpedal from previous skepticism over the significance of the rise in oil production from shale, the Paris-based International Energy Agency dismissed speculation that unconventional resources could weaken OPEC’s role in supplying oil over the long term. Brent oil eased by 5 cents to trade at 105.77 after breaking above the 106 level.

Natural gas prices eased by 5 points after a strong rally on Tuesday pushed prices close to 3.70. Natural gas is trading at 3.636 this morning. Natural gas ended higher for a sixth straight session on Tuesday, as investors focused on the mostly colder shift in the temperature outlook for the next two weeks and shrugged off the brief warm-up expected later in the week. The United States is likely to export 10-15 billion cubic meters (bcm) of liquefied natural gas (LNG) per year to Europe from 2020, although it will ship much more to Asian markets, a report by Wood Mackenzie showed. Future demand for US NG continues to rise as the DOE slowly approves new projects and global demand for the cheap energy product increases. Traders can expect prices to remain higher for the day on account of expectations of colder weather in the eastern US next week.

Prepare For a New Surge in Gold Prices on 2014

2013 has been a rather bad year for gold prices, with the precious metal losing $200 in April alone, following a suspicious dip. Even though a correction occurred soon after, overall, gold is trading at less than $1300 per ounce, almost $500 short of the values of 2012. After the optimists were proven wrong by the market and those who expected gold to surge above $2000 this year were disappointed, there are finally some good reasons to be confident in a new gold prices surge next year.

Potential Gold Drivers For 2014

Mining companies are trying to increase their output but just as some people fear that the so-called “peak oil” has been hit, there are some who worry that gold miners are becoming unprofitable. The truth is that if the gold price stays below $1250 for too long, mining companies can no longer afford to extract the precious metal. As a result, many of them will go bust and as they close down some of their operations, it is only fair to expect that demand will surpass the offer in 2014.

Speaking of which, the Chinese are purchasing gold at the same accelerated pace they did one year ago and it is most unlikely for the communist government to change its attitude in 2014. The bottom line is that with China being one of the biggest gold buyer in the world, the demand for the precious metal will remain the same while mining companies would have a hard time to provide. The Chinese are purchasing gold companies at a frantic pace and as they lose confidence in fiat currency, they will be willing to buy gold even if the prices spike.

Japan and India to Play a Big Part

When trying to determine whether gold prices will surge in 2014, analysts instinctively look at the current major buyers but tend to overlook potential customers. India for instance is purchasing much more gold than it did one year ago and even though the amounts are yet to reach the same levels as those recorded in China, this is a change to take seriously. The import tax on gold is higher than anywhere else, but the Indians are undeterred by the obstacle and purchase gold whenever they can lay their hands on it.

The fiscal policy in Japan has changed dramatically since Shinzo Abe became prime minister and inflation has crossed the 2% threshold. With Bank of Japan planning on printing more currency, the elderly citizens are concerned about the prospect of seeing their reserves losing their worth. Private and government pensions are at the highest levels ever and many of the retirees regard gold as a smart hedge against inflation.

Metals Traders Waiting For Chinese Leaders Reforms

Metals Traders Waiting For Chinese Leaders Reforms
Metals Traders Waiting For Chinese Leaders Reforms
After taking a major tumble on Friday, gold remains directionless adding just 0.15% in the Asian session to trade at 1286.50 falling steadily at the end of the week after the US nonfarm payroll report showed that the US had created in excess of 200k jobs against a forecast of 120k, this was followed by a revision of the previous jobs added upwards. Earlier in the week, US data showed that its GDP was much stronger than forecast printing at 2.8% while expected to only grow by 2%. This raised the possibility that the US Federal Reserve might move up its timetable to being tapering their asset purchases.

On the other side, unemployment ticked up a drop, which is the gauge that the FOMC has set for changing its policy. Despite the stronger than expected job growth, the unemployment rate ticked up to 7.3 percent in October from 7.2 percent in September. The modest increase by the unemployment rate, which matched economist estimates, largely reflected the way furloughed federal workers were counted in the household survey.

The major event from last week was the ECB’s decision to reduce its cash rate to its lowest level of 0.25%; this news pulled down precious metals prices and rallied the US dollar against the Euro. This week traders will be closely watching U.S industrial production, German GDP for the third quarter, China’s new loans, U.S federal budget balance, Yellen testifies, ECOFIN summit, and U.S. jobless claims. The price of gold decreased by 2.19% last week; moreover, the average price reached $1,306.70 which was 2.24% below last week’s average rate. Gold ended the week at $1,284.50. Gold holdings of SPDR gold trust ETF rose for the first week in the past ten consecutive weeks.  Nonetheless, during the month, the ETF’s gold holdings decreased by 0.41%. The ETF was also down by 35.71% for the year (up-to-date). Current gold holdings are at 868.418 tons. If the ETF’s gold holdings continue to pick up, this may signal the demand for gold as an investment is picking up.

Strong Chinese industrial production and export data has helped lift market sentiment, but the euro remained under pressure as looming deflation fears in the eurozone saw the ECB cut rates to a record low 0.25 percent last week. Inflation remains below expectations in the US, Japan and the Eurozone, which is pressurizing the prices of gold, which is a hedge against inflation.

Silver and copper are trading in the green this morning, silver is holding at 21.362 up by 45 points and copper is at 3.262 adding 4 points. Platinum and palladium are both in the red, fighting the trends. Platinum is trading at 1443.85 while platinum is down 2.50 at 756.50. Copper prices rose on Friday on optimism over positive Chinese trade data. However, a stronger dollar after US jobs report limited the upside in prices. China’s inflation climbed to 3.2%, raising fears of another tightening the central bank to curb credit supply and control inflation. However, Chinese factory output rose by 10.3% while fixed asset investment also rose to 20.1%. Base metals are expected to remain in range as investors would await the announcement of reforms at the Chinese Communist Party meet ending on November 12 to gauge the growth expectations for China. Tomorrow will be a big day for metals and commodities.

Is the Twitter IPO Euphoria Sustainable?

On Thursday, Twitter opened up higher than its $26 IPO price on huge speculative demand. The shares opened at $45.10 on the New York Stock Exchange, under the ticker TWTR. Speculators chased the market to a high of $50.09 before settling at $44.90, up 73%. The strong finish puts the stock’s capitalization at more than $31 billion. This is lower than Facebook’s $120 billion value, but above the valuation of LinkedIn’s $26 billion.

Now that the euphoria of the IPO is over, investors will have to decide the value of the company’s long-term opportunities. The service is already a popular global media tool, but investors will have to decide if its growth can be sustainable given the stiff competition it faces from Facebook and LinkedIn. Because of these doubts, sellers may take this market back to its original IPO price of $26 before reassessing its future prospects.

The key to success of this stock will be how fast it can turn its business model into a viable money-making venture. Patient investors and those in for the long haul are likely to back away from this stock until it comes down to a value area. This often happens with popular IPO stocks which have been pumped up by excessive speculative demand.

Although the service has huge brand recognition, it has yet to turn a profit. It lost $67 million in 2010, $164 million in 2011 and $79 million in 2012. It has also continued to bleed cash in 2013. Its ad revenue may be increasing, but it is still well behind Facebook in this category. This stock had to retreat after its IPO and didn’t reach a bottom or exceed its IPO price until it began making money from its mobile advertising.

The question that long-term investors have to ask themselves is does this company have long-term growth potential. Some reports suggest Twitter is adding new users at a slower pace. In addition, although revenue is rising, it is doing so at a slower rate. If this trend continues then the stock may have to wallow at prices below current levels before it finally rights the ship. This is no guarantee either since there have been social media darlings in the past like MySpace which never lived up to its initial hype.

If the stock is overvalued, smart money will take care of that situation over the long-run. Speculators may try to hold this market above the $26 IPO price over the short-run, but eventually the market will begin to trade off the key fundamentals and this may set up the stock for a correction back to a more suitable value area. 

Silver & Copper Climb On US GDP And Chinese Exports

Silver & Copper Climb On US GDP And Chinese Exports
Silver & Copper Climb On US GDP And Chinese Exports

remains in a fairly tight range in the low 1315.00 price range. In the Friday morning Asian session, the shiny metal eased by 1.60 to trade at 1316.20. The US dollar continues to climb trading at 80.96 after stronger US data helped start the rally. Traders will be closely watching today’s nonfarm payroll report for hints of what the next Federal Reserve’s move might be.

Traders have a handful of data to digest ahead of today’s events. Traders will be very busy later today looking at US data on Nonfarm Payrolls, Personal Spending, Private Nonfarm Payroll, and Unemployment Rate.Traders are shifting through yesterday and this morning’s data which include Chinese exports increased higher than projected in October while import gains accelerated. Exports rose 5.6% in October year-on-year basis, the General Administration of Customs said on Friday. Imports rose 7.6%, leaving a trade excess of $31.1 billion, the highest in 2013.

US Advance GDP gained 2.8 percent in the September quarter as against a gain of 2.5 percent in the prior quarter. Unemployment Claims declined to 336,000 in the week ended November 1 from 340,000 in the prior week. Advance GDP Price Index rose 1.9 percent in the quarter ended September as compared to a gain of 0.6 percent in the previous quarter.

The European Central Bank (ECB) reduced interest rates to the lowest on Thursday to support the economy. The interest rate on the main refinancing operations of the Euro system will be decreased by 25 basis points to 0.25%, starting from the operation to be settled on 13 November 2013. The interest rate on the marginal lending facility will be decreased by 25 basis points to 0.75%, with effect from 13 November 2013. The interest rate on the deposit facility will remain unchanged at 0.00%, the bank said in a release.

Silver climbed by 38 points to trade at 21.695 and copper climbed 11 points to trade at 3.253 after higher Chinese export numbers buoyed the demand for industrial metals. Copper prices gained around 0.2 percent taking cues from favorable US GDP data coupled with expectations of positive economic data from China. Further, decline in inventories by 0.4 percent to 467,025 tonnes supported an upside. From the intra-day perspective, trades can expect base metals prices to trade on a mixed note on the back of favorable GDP data from the US. Further, rise in China’s imports by 7.6 percent shows expansion in the world’s largest metal user which will support an upside in prices. However, sharp upside will be capped or reversal can be seen as a result of weak market sentiments coupled with stronger DX.

Copper Takes A Big Fall While Gold Remains Flat

Copper Takes A Big Fall While Gold Remains Flat
Copper Takes A Big Fall While Gold Remains Flat

Gold is trading at 1316.20 down by $1.60 in the Asian session while the US dollar holds completely flat. Silver eased by 33 points as Chinese economic worries continue to weigh on the metals markets. After six days of a losing streak, gold rebounded on short covering. Earlier, the yellow metal declined on speculation that recent upbeat economic figures from the US will force the Federal Reserve to pare stimulus measures. Yesterday, an economic release from the world’s largest economy showed that the service sector in the region expanded faster than previously anticipated. On the other hand, the dollar index continued to trade near multi week highs. While the market mood was rather mixed-up owing to uncertainty lingering in the market over the future of the Fed massive bond buying program, investors’ attention has now essentially shifted towards a slew of economic releases scheduled for the latter half of this week. These key releases include the ECB rate announcement and US GDP on Thursday, Chinese trade balance and US nonfarm payrolls on Friday as well as Chinese inflation and industrial production data on Saturday, which will spur wide swings in the market.

The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent gain in the previous period, shows a Bloomberg survey before today’s report. Economists predict data Nov. 8 will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month. The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent gain in the previous period, shows a Bloomberg survey before today’s report. Economists predict data Nov. 8 will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month. Gold fell to $1,305.98 on Nov. 5, the lowest since Oct. 17, after the Institute for Supply Management’s U.S. non-manufacturing index rose. The central bank won’t reduce stimulus until March, according to the median estimate of economists in a Bloomberg survey Oct. 17-18.

Copper gained by 5 points to trade at 3.247 remaining well below its 3.36-3.30 range. Copper climbed after touching  the lowest price in almost a month before the release of U.S. data that may help investors gauge when the Federal Reserve will begin tapering bond purchases and ahead of Chinese trade figures. China, the world’s largest copper user, is scheduled to announce its October trade balance tomorrow, followed by inflation and industrial production data on Nov. 9. Chinese Communist Party leaders will meet for four days starting Nov. 9 to discuss policies. Data firm Markit said its October composite purchasing managers index for the euro area slipped to 51.9 from 52.2 in September, but was revised up slightly from an earlier reading. Readings above 50 indicate expansion. In addition, the services PMI for the eurozone fell to 51.6 in October from September’s 52.2, but topped expectations of 50.9. And UK industrial production for September rose 0.9 per cent on the month versus expectations of a 0.5 per cent increase. The positive data limited the metal losses on Wednesday. Platinum climbed this morning to 1466.55 while palladium dipped by $2.10 to 762.80

Daily commentary – European and US stock markets

Daily commentary – European and US stock markets
Daily commentary – European and US stock markets

 European markets

European indices opened higher on Wednesday, supported by upbeat quarterly earnings, as they rebound from yesterday’s session. Among the high flyers this morning were ING Groep NV, whose shares were up by 4.93%, following strong net income results which surpassed projections. German semiconductor manufacturer Infineon Technologies AG was leading the earnings on the DAX30, gaining 1.41% at the time of writing. Meanwhile, French multinational company Alstom SA, which is a big player on the power generation and the rail transport markets, was the top performer in the CAC40, climbing by 4.04%. At the time of writing, France’s CAC40 was up by 0.77% to 4,286.38, Germany’s DAX30 was gaining 0.36% to 9,041.23, while the UK’s FTSE100 was increasing by 0.09% to 6,752.62.

 cac40

US markets

During yesterday’s session the major US indices fell after “enjoying” two consecutive days of growth. Investors will be fully focused on the highly anticipated news on the US GDP and employment rate, due for release in the next two days.

Economic data from the US is closely followed by market makers as the results give a clear sign whether the Fed will reduce or keep its stimulus programme. That is why upbeat figures do not always create the expected positive effect on the markets. The $85billion-per-month asset-purchase programme will continue until the US economy shows that it is strong enough to grow without additional help.

The broad S&P500 lost 0.3% of its value, closing at 1,762.97, with eight out of the ten industries declining: while  both telecommunications and energy companies sank by more than 0.8%. During the session, the benchmark reached a daily peak at 1,771, or just 5 points below a new record.

The Dow Industrial fell by 20.90 points, or 0.1%, to 15,618.22, with the worst performers being Verizon Communications Inc., which erased 1.9% off its value, and AT&T, going down 2.5%.

Meanwhile, the technological Nasdaq100 took an opposite chart direction and ended gaining 4.08 points, or 0.12%, to 3,388.82. 

s&p500

The US earnings season is already drawing to an end and so far 404 S&P500 companies have published their results, with 75% of them exceeding profits forecasts. Among corporations that experienced a serious decline in share prices in Q3 so far is Delphi Automotive Plc., which lost 5.2% to $55.01 per share. Tenet Healthcare Corp. also wiped 8.8% off its value, reaching $44 per share and reporting the biggest decline in the S&P500 as its Q3 report missed experts’ expectations.

 

Looking further in the day, some of the companies that are due to publish their financial results are Whole Foods Market Inc., Activision Blizzard Inc., Qualcomm Inc., and Time Warner Inc., which is the only one to release its quarterly earnings before the start of the US session today. Analysts have forecasted a net income of $835.2 million, with an expected revenue of $6.94 billion compared to actual results from last year: $838 million net income and 6.84 billion revenue.

On the economic calendar scene, there is not much happening today, however, investors are strongly focused on the European Central Bank interest rate decision due tomorrow and the US Non-farm payrolls set for Friday.

 

Source: dfmarkets.co.uk

 

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Chinese Housing Worries Weighs Heavily On Copper and Metals

Chinese Housing Worries Weighs Heavily On Copper and Metals
Chinese Housing Worries Weighs Heavily On Copper and Metals
Gold traded in the green in Monday adding just a few dollars but remains directionless. This morning gold climbed 60 cents to trade at 1315.30. U.S. reports that may show slower economic growth and a smaller increase in employment, hurting expectations that the Federal Reserve will move to pare stimulus. Bullion is heading for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. The Institute for Supply Management’s U.S. non-manufacturing index due today probably fell to a four-month low, while payrolls may have posted a smaller gain last month than in September. The Fed last week maintained its $85 billion in monthly bond purchases.

It seems the tone and the thoughts of many Fed members have changed dramatically over the last weeks. Just two months ago it seems most Fed members were pushing for tapering before the September meeting as markets expected the FOMC to announce the beginning of a reduction program, but the Fed held rates and policy surprising the markets. At the last meeting just a few days ago, the FOMC was stuck in a hard place after data was delayed due to the government shutdown and debt ceiling problems. Many traders were starting to think that the Fed would introduce tapering at its December meeting, which now seems unlikely. Most Fed members are saying that the Fed probably will not begin tapering until 2014. Three Fed officials who vote on policy this year — Governor Jerome Powell, Boston Fed President Eric Rosengren and James Bullard of the St. Louis Fed — signaled yesterday that the Fed may push on with stimulus for some time.

Trades will be closely watching the nonfarm payroll report due this coming Friday. Payrolls rose by 120,000 workers last month after a 148,000 gain in September, Labor Department figures may show Nov. 8, based on a separate poll. A Nov. 7 report will show U.S. gross domestic product grew at a 2 percent annualized rate in the third quarter, down from 2.5 percent in the previous three months, according to the median estimate in another survey. This week traders will also see the European Central Bank meeting here low inflation data has pushed Mr. Draghi into a corner and now traders are expecting some assistance from the ECB.

Silver eased by 12 points to trade at 21.668 but remains well within its recent trading range as copper recovered a few points this morning to trade at 3.266 after taking a major fall on Monday. This morning Chinese HSBC services PMI reported better than the previous month. As the US dollar regained its momentum after the FOMC meeting pressure continued to mount pressurizing metals. Copper dropped the most in more than a week in New York as U.S. factory orders rose less than forecast in September, adding to concern that demand for the metal may slow.

The 1.7 percent gain in bookings trailed the 1.8 percent median increase in a Bloomberg survey of economists. Orders for non-defense capital goods excluding aircraft, a measure of future business investment, fell 1.3 percent. Concern about China’s housing market also weighed on prices. An editorial published by China Securities Journal said the Asian nation’s real-estate bubble poses a “danger” to the economy and called for property controls and reform of land and tax policies. The Copper Development Association says construction generates about 40 percent of demand for the metal, used in pipes and wiring.

Precious Metals Flat As Industrial Metals Tumble

Precious Metals Flat As Industrial Metals Tumble
Precious Metals Flat As Industrial Metals Tumble
Gold remained flat in Monday’s Asian session, trading at 1313.20 after taking a substantial tumble last week. Silver is ignoring cues the indecision of precious metal traders to tumble 122 points to trade at 21.715, while copper gave up 21 points to trade at 3.279. The strong recovery of the US dollar is weighing heavily on the metals family this morning. The greenback has climbed by 4 pips this morning to trade at 80.85 followings its strong climb from a low on October 25 of 79.06.

Last week’s FOMC meeting ended with no change in policy, but based on the wording of the statement some analysts have speculated the Fed may taper QE3 in December. Last week, gold and silver tumbled down, while USD appreciated against leading currencies.  The price of gold plummeted by 2.89% last week; further, the average price reached $1,336.64 which was 0.16% below last week’s average. Gold ended the previous week at $1,352.30.

The price of silver also tumbled down by 3.42%; moreover, the average weekly rate was $22.32, which was 1.23% below last week’s rate.

On this week’s agenda traders will see the results of the U.S non-farm payroll report, U.S GDP for Q3, ECB rate decision, Canada and Australia employment reports, U.S factory orders, Bernanke’s speech, German factory orders, U.S non-manufacturing PMI report, RBA and BOE rate decisions along with Australia’s retail sales. The upcoming U.S data including non-farm payroll report, non-manufacturing PMI, factory orders and GDP for the third quarter could offer some additional information regarding the progress of the U.S economy including labor, manufacturing and non- manufacturing markets. These reports could also affect December’s FOMC meeting isn’t regarding maintaining or not the Fed’s bond purchase program at $85 billion a month.

Production is poised to top demand for everything from coffee to zinc as ample rains this year boosted global crops and demand waned for metals, grains and energy. U.S. crude inventories climbed to the highest since June, data from the Energy Information Administration showed Oct. 30. Commodity returns will be “mostly flat” in the next 12 months, and there are “significant downside opportunities” in gold, copper and soybeans, Goldman Sachs Group Inc. said Oct. 18.

Industrial metals were trading firm at LME following stronger-than-expected manufacturing data from world’s second largest economy China amid easing uncertainty over QE tapering. Industrial metals prices dipped to its lowest level in nearly two weeks yesterday as persistent concerns about credit tightening in top metals consumer China offset upbeat manufacturing growth there. Copper is expected to end the year 8 percent lower, and tumble further in 2014 as demand struggles against strong supply growth from new and existing mines, a Reuter’s poll showed. 

The New Month Sees Gold, Silver & Copper Trading In The Green

The New Month Sees Gold, Silver & Copper Trading In The Green
The New Month Sees Gold, Silver & Copper Trading In The Green
Gold recovered about $2.00 this morning in the Asian session, after its huge tumble yesterday. Gold is trading at 1325.40 well below the 1350 range from earlier in the week. Even since the conclusion of the 2 day meeting of the US FOMC, and its positive outlook of the current economic situation gold lost ground. The metal is headed for a 2 percent weekly drop – its first in three weeks – as bullish sentiment from expectations that the Federal Reserve will keep its stimulus dissipated.  Markets fear an improving economy could prompt the U.S. central bank to cut back bullion-friendly stimulus measures. The metal had gained ground over the past two weeks, hitting a five-week high on Tuesday in anticipation of the Fed’s decision. But it fell after the US central bank did not sound quite as alarmed about the state of the economy as some had anticipated, although it kept its $85 billion-a-month stimulus plan intact.

The demand for physical gold on Dhanteras, the second day of the Diwali festival, considered auspicious to buy the yellow metal, is likely to stay muted this year. While domestic gold prices are trading at levels similar to the last festive season, bullion traders say demand is likely to be “dismal”. According to Bombay Bullion Association (BBA) estimates, demand for gold coins and jewelry declined by 75% and 60% respectively in the two weeks leading to Dhanteras, compared with the same period last year. India’s bullion industry is shrinking, squeezed by government rules meant to curb a surge in gold imports, with banks and others opting to redeploy personnel for now but possibly facing big job cuts in coming months.

The volume of gold transferred between accounts held by bullion clearers fell 16.3 percent in September to an average 18.5 million ounces a day, its lowest since August 2012, the London Bullion Market Association

Gold is heading for its first yearly decline in 13 years as some investors lost faith in bullion as a store of value and the U.S. Federal Reserve indicated that it will reduce monetary stimulus. The precious metal rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system to boost the economy. Consumption in India, which imports almost all the bullion it uses, accounted for 20 percent of global demand in 2012, the World Gold Council says.

Silver followed cues from gold on Thursday taking a huge tumble, to trade below the $22 price level and is recovering a bit this morning adding 25 points to trade at 21.892. Copper edged higher back above the 3.30 level adding 8 points to trade at 3.307 after strong Chinese PMI data releases. The official Purchasing Managers’ Index (PMI) rose to 51.4 in October from 51.1 in September and was above analyst expectations for a reading of 51.2. It remained comfortably above the 50-mark that divides expansion from contraction. SBC meanwhile said that the final reading of its China October PMI was 50.9, unchanged from a flash estimate released last week. On this measure, the Chinese manufacturing sector grew at its fastest pace in seven months, lifted by new orders.

 

Global Stock Exchanges Pay Little Attention To FOMC Statement

Global Stock Exchanges Pay Little Attention To FOMC Statement
Global Stock Exchanges Pay Little Attention To FOMC Statement
Stock exchanges around the globe had little response to the FOMC decision and statement, or better put moved on after being assured that Mr Bernanke and associates did not do anything unexpected. They did exactly as expected. They held rates and policy and kept their financial assessment pretty much the same but toned it down a bit assuring markets that the US economy had passed the through the recent political storm with little damage. Reserve officials ended their policy meeting with their signature easy-money program intact and no clear signal about whether they would begin pulling it back at their December meeting or continue it into 2014 during a leadership transition at the central bank.

In the six weeks since the Fed last meeting in September, the US has been rocked by fiscal brinkmanship that led to a government shutdown that delayed crucial economic data and raised worries that the Treasury Department could miss some bond payments. Fed officials stuck to their assessment of the slow-growing economy following that political storm and decided to keep their $85 billion-a-month bond-buying program in place for now. The decision left investors uncertain about when officials will begin paring the purchases that have been an important driver of asset prices and interest rates.

Inflation is well below the Fed’s 2% target. The Cleveland Fed tracks inflation expectations, and they have also been consistently weak for some time. For some Fed officials, low inflation argues for more aggressive central bank action, given that the Fed is supposed to prevent inflation from ranging too far below or above its 2% target. On the bubble issue, some other Fed officials worry about that possibility but most of them don’t currently see a level of excess that threatens broader financial stability. Some have said the rise in rates seen since the late spring helped to flush out whatever froth and complacency that might have been building earlier this year.

The Fed statement came after European markets had closed for the day. The Stoxx 600 closed little changed at 320.80, having hit a five-year high of 322.90 earlier in the session. Germany’s DAX shed 0.1%, while London’s FTSE 100 was broadly flat. US markets had a bit of reaction but not drastically after trading on a positive note most of the week. The Dow Jones backed away from a fresh record set in the previous session. The index closed down 61.59 points at 15,618.76 points. The Dow was up as much as 41 points before the Fed released its statement.  Stocks have rallied this year, with the 24 per cent gain in the S&P 500 fuelled, in part, by the Fed’s easy-money policies.  The S&P 500 index gave up 8.64 points, or 0.49 per cent, to close at 1,763.31 points. In the previous session, the S&P 500 rose 0.6 per cent to a third-straight record high and seventh record in nine sessions. The Nasdaq fell 21.72 points, or 0.55 per cent, to 3,930.62 points. 

This morning Asian markets are trading in the red. The Bank of Japan closed their meeting with no changes to rates or policy. With no positive catalysts from the Fed overnight, most regional markets dropped Thursday. The Nikkei fell 0.4%, as the yen strengthened a touch in Asia recently at ¥98.38 to the dollar. Australia’s markets climbed by 0.3%, and South Korea’s Kospi gave up 0.7%. In China, Hong Kong’s Hang Seng dipped 0.6%, and the Shanghai Composite fell 0.8%. The global earnings season progressed, with markets reacting to results in Australia, Japan and China and of course the US where Facebook was a major winner yesterday.

 

 

 

Daily commentary – European and US stock markets

Daily commentary – European and US stock markets
Daily commentary – European and US stock markets
European markets

European stocks opened higher this morning, supported by better-than-expected quarterly results of several companies. The UK’s FTSE100 was up 0.64% to 6,818.83, France’s CAC40 rose 0.74% to 4,309.28, while Germany’s DAX30 climbed 0.50% to 9,050.59 at the time of writing. Several companies’ quarterly reports beat analysts’ expectations and in turn their share prices increased, starting with Europe’s largest carmaker Volkswagen, whose shares rose by 4% to €181.80. UK clothing retailer Next Plc. was also rising strongly by about 5% at the time of writing, to 5,460.91p. One of the top CAC40 gainers was French electricity provider Electricite de France SA (EDF), whose shares were climbing by 0.98% €26.2050 at the time of writing.

 dax30

US markets

Major US indices advanced in the latest session, despite a bit disappointing macroeconomic data. The S&P500 managed to reach a new record, strengthening its good performance in recent days. As the highly-anticipated Fed meeting started yesterday, investors turned their attention on its outcome which is due to be announced today.

Meanwhile, some important economic results were announced, which revealed that the Retail Sales for September fell to -0.1%, opposite experts’ expectations for a 0.1% rise. Another report showed the Producer Price Index dropping to -0.1% and 0.3%, MoM and YoY, respectively. US Consumer Confidence for October also registered a drop, falling sharply from 80.2 the previous month to 71.2 points.

 

The S&P500 gained 0.6%, or 9.84 points, to end at 1,771.95, marking its 33rd record closing this year. The best performing industry within the benchmark was the telecommunications sector while the utility sector was the worst performer.

The Nasdaq100 rose by 0.3%, or 12.21 points, to close at 3,952.34, with trading being halted for about an hour because of an error.

 nasdaq100

The Dow rose by 0.7%, advancing by 111.42 points to a fresh historical peak at 15,680.35, with 24 of the 30 companies within the benchmark recording increases. One of the highest earners was IBM Corp, whose shares climbed by 2.7%. Pfizer Inc. shares also registered a rise, adding 1.7% to reach $31.26 per share as the pharmaceutical company reported better quarterly earnings, compared to analysts’ expectations.

On the losing side of the charts was Caterpillar Inc. whose shares declined by 0.3%.

Looking further in the day, the Fed is due to announce its interest rate decision along with its outlook on tapering the asset-buying programme. Other news include the Reserve Bank of New Zealand interest rate decision and Japan’s JMMA Manufacturing Purchasing Manager Index (Oct).

 

Source: dfmarkets.co.uk

 

Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions.

Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.

 

Oil Inventories Continue To Climb As Prices Drop

Oil Inventories Continue To Climb As Prices Drop
Oil Inventories Continue To Climb As Prices Drop
The US Energy Department (EIA) is scheduled to release its weekly inventories report early in the North American session and US crude oil inventories are expected to rise by 2.2 million barrels for the week ending on 25th October 2013. Gasoline stocks are expected to drop by 0.1 million barrels whereas distillate inventories are expected to plunge by 0.3 million barrels for the same period. Crude oil continued to ease this morning giving up 49 cents to trade at 97.71 as weak US data is reducing demand for oil consumption and increased production continue to push up stocks. Yesterday the American Petroleum Institute (API) report showed that US crude oil inventories increased more than expected by 5.9 million barrels to 381.30 million barrels for the week ending on 25th October 2013. Gasoline inventories rose by 740,000 million barrels to 222.10 million barrels and whereas distillate inventories fell by 2.7 million barrels to 122.50 million barrels for the same week. Crude oil inventories will be released in the early morning but markets will remain focused on the Federal Reserve statement and their assessment of the US economy. A dovish statement could weigh heavily on the demand and price of crude oil. Brent oil is trading at 108.78 slightly in the red but is being well supported by a jump in industrial production in Japan. The impact of the ongoing FOMC meeting in the US is visible in the global market. This morning Asian markets are robustly up while the Forex US dollar has appreciated against most of its rivals. The euro has shred its previous gain and at present trading at $1.3740. Likewise, the U.K. currency, the Japanese yen and many others are also in the negative territory. News released yesterday from the US indicated that the country’s lawmakers are considering new sanctions against Iran which could slash the OPEC oil member’s exports by 50% over the next year. Analysts primarily attributed the rally in Brent crude futures to reports of plunging Libyan production stemming from political instability and labor strikes at that country’s oil export terminals. The latest concerns stemmed from a labor protest at El Sharara field although observers expect that protest to end soon.

Two of the most volatile oil producers—Libya and Iraq—experienced serious unrest over the weekend. In Iraq, multiple bombing attacks targeted commercial areas, killing dozens of people, authorities said. Meanwhile, Goldman Sachs maintained its near-term Brent price forecast of $110, saying any additional disruptions in Libya could drive prices higher. Exports from Libya have been hit drastically due to protests by workers at the ports. However, Libya’s Prime Minister expects one of the ports with capacity of 1, 10,000 bpd to reopen next week, easing supply concerns from the OPEC region. Crude oil prices are expected to go down as expectations of higher inventories and easing supply worries from Libya can hurt prices.

Natural gas futures ended lower on Tuesday 3.65 but eased again this morning to 3.63 on mild weather forecasts for the week. Prices are expected to move down further today. Front-month gas futures on the New York Mercantile Exchange ended down 0.87 percent per million British thermal units. Natural gas remains in the headlines with new projects and increase demand for exports as it is steadily cutting into coal usage, but increased demand remains years ahead as the DOE withheld approval on projects for a long time, and has just recently approved the projects to begin terminals and export functions. Natural gas is quickly becoming the number favored energy product.

 

Chinese Gold Consumption and Production Increasing

Chinese Gold Consumption and Production Increasing
Chinese Gold Consumption and Production Increasing
A recent study released this week reported a big surprise. The buying of luxury goods this year is expected to top last year’s sales, with growth in the Americas overtaking that of China, a worldwide study revealed yesterday. In a reversal of the trend in recent years, spending on luxuries in the Americas is expected to grow four per cent this year, as opposed to 2.5 per cent for China. Ironically, one of the factors driving sales growth in the Americas is tourist spending from the increasing number of Chinese visiting cities like Los Angeles and Las Vegas. Regardless of how you move the data around, the fact remains that the Chinese are driving high end luxury good sales at home and abroad. This supports the recent news that China is surpassing India as the largest purchaser of gold. While industrial demand increases but the demand for private consumption is exceeding expectations. Gold consumption in China, the world’s largest user after India, jumped 54 percent in the first half of 2013, putting the country on track to become the top bullion consumer at a time when demand is contracting elsewhere.

Consumption reached 706.36 metric tons in the first six months, the China Gold Association said in an e-mailed report. Gold-bar purchases surged 87 percent to 278.81 tons, while jewelry gained 44 percent to 383.86 tons, it said. Demand accelerated from growth of 26 percent in the first quarter, according to data from the association, which is funded by miners, refiners, retailers and jewelry makers.

Gold is trading at 1355.20 up a few dollars in the Asian session but has remained directionless ahead of the US FOMC two day meeting commencing today. Gold is heading for its worst year in three decades as some investors lost faith in the metal as a store of value and amid speculation the U.S. Federal Reserve will curb debt-buying. India doubled a tax on inbound shipments and curbed financing to tackle a surge in demand after the metal entered a bear market in April. China is the world’s largest gold producer. Gold is now a short term investment vehicle and less a long term holding as demonstrated by the continued decline in EFT holdings. The weak US dollar is helping to support prices which climbed from below the 1300 price level to the 1350 price in just two days last week and will most likely decline after the FOMC meeting. Silver followed cues from gold to trade at 22.55 but remains in a tight range in the 22.50 level. Copper is trading at 3.262 down by 4 pips this morning; the current price is below its longer term range close to 3.30. Copper fell for the first time in four days before U.S. data forecast to show consumer confidence fell to a five-month low and retail sales stalled as the Federal Reserve starts a two-day meeting today. The Conference Board’s index of U.S. consumer confidence probably declined to 75 this month, the weakest since May, from 79.7 a month earlier, according to a survey. Economists in a separate poll predict the Commerce Department to report today no change in retail sales in September, the worst reading in six months.

 

Precious Metals & Industrial Metals Trading In The Green

Precious Metals & Industrial Metals Trading In The Green
Precious Metals & Industrial Metals Trading In The Green

Gold is trading in the green this morning holding near a 4 week high at 1336.00 as silver really shines adding 106 points to trade at 22.723 after the release of stronger than expected Chinese manufacturing data. Traders are beginning to pay very close attention to the Federal Reserve with the FOMC meeting next week. Gold has often tracked shifting expectations as to whether the US central bank would start reining in nearly five years of super-easy dollars, a measure which had sparked fears of inflation and encouraged investors to buy the precious metal. Prices sank to a near three-year low around $1,180 in late June on worries over the Fed’s plan to wind down the stimulus. Odds makers have put the possibility of tapering at this meeting close to 0, with poor jobs data and the government shutdown effects remaining unknown. The prospect of the Fed staying the course on its easy-money policies through year’s end sent the Dow Jones to a one-month high, market participants said. The blue-chip index gained 75.46 points, or 0.49%, to 15467.66 and is once again nearing record territory, and the S&P 500 finished at a fresh record close, up 10.01 points, or 0.57%, at 1754.67. Treasury yields sank to a three-month low on the report. The yield on the 10-year Treasury, which moves in the opposite direction of the price, fell to 2.512%.

HSBC’s China manufacturing purchasing managers’ index showed activity in the nation’s manufacturing sector expanded more than expected in October, rising to a seven-month high. The initial October reading for China’s manufacturing activity came out at 50.9, compared with a final reading of 50.2 in September. The score was a seven-month high; above the 50 mark that separates expansion and contraction in factory activity. Copper made an amazing turnaround this morning after the data release adding 12 points to trade at 3.278 after suffering a huge drop on Wednesday. Copper futures sank 2% as concerns about the stability of China’s financial system sparked worries over the country’s future demand for copper. China’s short-term interest rates jumped to levels not seen since July as some companies tapped money markets to fund deadline tax payments and as worries spread about bad debts in the banking system, analysts at Scotiabank said in a note.

Adding to the tension, while China’s central bank refrained from removing liquidity from the domestic money market on Tuesday, authorities also avoided pumping liquidity into the system in recent days. The lack of open market activity is a sign of concern that tighter liquidity will hamper growth in the world’s second-largest economy, analysts said. China is the world’s largest copper consumer, accounting for about 40% of global copper demand, and fears of slower economic growth there contributed to a 16% drop in copper prices during the first half of 2013.

The weaker US dollar is also helping the metals markets to trade on a positive note this morning. Palladium rose by 1.50 to trade at 747.00 while Platinum added 9.30 to reach 1443.60.

Daily commentary – European and US stock markets

 

Daily commentary - European and US markets
Daily commentary – European and US markets

 

European markets

 European indices opened mostly lower on Wednesday, ending their longest stretch of gains in more than 3 years. At the time of writing the German DAX30 was down 0.43% to 8,907.99, France’s CAC30 was falling by 0.68% to 4,266.88, while the UK’s FTSE100 was losing 0.42% to 6,670.96. Among the bad performers this morning is French-Italian chip maker STMicroelectronicsNV, whose shares were down 6.62% to €5.95 after disappointing third-quarter results. Another company on the losing end is French multinational telecommunications corporation Orange S.A., whose shares were down 2.5% to €10.39.

 cac40

US markets

Wall Street ended the session with increases, with the S&P500 reaching a fresh record-high, after the US Department of Labor published its much-anticipated and shutdown-delayed results on the unemployment rate and Non-Farms Payrolls. Disappointing data increased speculations that the Fed will continue with its stimulus measures, maintaining the current pace of $85 billion–a-month asset-buying. The report revealed 148K news jobs were created, well below analysts’ forecast for a 180K rise. However, the same report also showed the unemployment rate dropping to 7.2% from 7.3% for the previous month, thus reaching its lowest level since 2008.

The US labour market strength will depend largely on how quickly the world’s biggest economy will recover the losses caused by the partial government shutdown. The lengthy disputes over the budget will affect the fourth quarter growth and will likely press the Fed to postpone the reduction of the asset-buying programme. Analysts commented that it is unlikely for the Fed to cut the QE earlier than March 2014.

The technological Nasdaq closed with a modest gain of 9.52 points, or 0.2% higher at 3,929.57, after having a highly volatile trading day which saw the benchmark erasing most of its gains, after two of its major companies, one being Netflix Inc., reported steep declines.

The S&P500 climbed 0.6% to 1,754.67, marking a new intraday peak, with 9 of its 10 groups increasing their value. So far, on an annual basis, the benchmark has gained 23% and needs only 0.5% more in order to register its biggest yearly profit since 2003.

sandp500

The Dow added 75.46 points, or 0.5%, to 15,467.66, marking its highest closing level for this month.

The earnings season is in its peak, and so far 138 companies have published their financial statements, with 72% of them reporting better than expected profits, while 52% have exceeded analysts’ sales forecasts.

Among the wining companies during yesterday’s trading was VMware Inc., whose shares increased by 2.8% to $85 per share, supported by a strong earnings report, which revealed a 14% rise in profits to $1.29 billion.

Meanwhile, Netflix Inc. shares were subjected to big sell-offs at the end of the session, after analysts questioned the company’s earnings figures for Q3. Following these speculations, its shares plummeted by 9.2% to $322.52, erasing earlier gains of 9.6%, which were boosted by their financial report.

 

Looking further in the day, the economic calendar has to offer the US Import and Export Price Indexes (YoY and MoM) along with the country’s Housing Price Index for August, the Preliminary release of the Eurozone Consumer Confidence for October, and the New Zealand Trade Balance for September.

Outside the economic calendar, some major companies are due to publish their financial results today. These include Boeing Co., Caterpillar Inc., US Airways Group Inc., WellPoint Inc., and  AT&T Inc. The first four of them will reveal their results before the opening bell, while AT&T will publish them after the end of the regular US session.

 

Source: dfmarkets.co.uk

 

Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions.

Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.

 

Gold – Silver & Copper Rally After Lackluster US Jobs Data

Gold - Silver & Copper Rally After Lackluster US Jobs Data
Gold - Silver & Copper Rally After Lackluster US Jobs Data
Gold and silver are trading in the red this morning after a strong gain on Tuesday after the release of a dismal jobs report in the US. Gold ended the day at 1342 and silver was up at 22.79. Precious metals responded to the weak US dollar and hopes of continued Federal Reserve asset purchases. Gold is down just 3.40 in this morning’s trade as investor’s book profits on the strong climb yesterday. The US nonfarm Employment Change declined by 45,000 to 148,000 in September as against a rise of 193,000 in August. Unemployment Rate fell to 7.2 percent in September from rise of 7.3 percent a month ago. Average Hourly Earnings were at 0.1 percent in last month as compared to 0.3 percent in August. Treasury International Capital (TIC) Long-Term Purchases slipped to $8.9 billion in August with respect to $31 billion in prior month.

 The US Dollar Index (DX) declined around 0.6 percent yesterday on the back of decline in US non-farm employment data. This factor led to expectations of delay in QE tapering program by the Federal Reserve which exerted downside pressure on the currency. Further, rise in risk appetite in market sentiments led to fall in demand for the low yielding currency. The labor market scenario in US is still above the Fed’s target of 6.5 percent and will continue with its loose monetary policy stance which acted as a negative factor. The DX touched an intra-day low of 79.24 and closed at 79.29 on Tuesday. The dollar index continues to ease this morning down by 9 points to trade at 79.21.

Speculators can expert precious metals to trade on a higher note on the back of upbeat global market sentiments coupled with weakness in the DX. Further, a rise in SPDR Gold holdings of 0.8 percent in yesterday’s trade will support an upside in prices. It is the first time in recent days that money managers and funds have increased their holding in precious metals.

Copper rose on Tuesday as the dollar fell and after the first U.S. jobs report in nearly two months suggested the economy had lost steam, supporting expectations that the Federal Reserve will delay a decision to taper its bond-buying program. Copper eased a bit to correct by 27 points to trade at 3.309. The dollar fell across the board after the disappointing jobs data. This helped copper because a weaker U.S. currency makes it less expensive for foreign investors to buy dollar-priced commodities, thus supporting prices. Copper prices are expected to move down as rising home prices in China is likely to prompt the central bank to control inflation and curb credit supply, which can hurt growth and dampen the demand for industrial metals. Japan’s output of rolled copper product rose to 68,037 tons in September on a seasonally adjusted basis, up 4.5 percent from a year earlier, preliminary data showed on Wednesday.