Global Economic Daily - 08/08/2024

NEWS AND MARKET COMMENTARY Global Equities

·   Asia-Pacific Markets Extend Gains; China’s Exports Miss Expectations, Imports Pick Up in July

·   Europe Stocks Close With Strongest Gains for Nine Months as Global Rebound Continues

Global Fixed Income

·   Stocks Swoon After Weak $42 Billion Treasury Sale

·   10-Year Treasury Yield Rises to 3.94%, Back to Friday’s Levels

Currencies

·   US Dollar Sees Interest Rate Differential Widen in its Favor After Dovish BoJ Comments

·   EUR/USD Forecast: The Bullish Bias Persists Above the 200-Day SMA

Energy

·   American Shale Consolidation Continues With Rumors of Another Sale

·   Crude Oil Continues to Build a Basing Pattern

Metals

·   Gold Price Forecast: Risk of Lower Prices Remains

·   Silver Continues to Sit at the 200-Day EMA

Global Politics/News

·   US 30-Year Mortgage Rate Drops on Weak Jobs Data, Fed-Rate Cut Signals

·   Putin Accuses Ukraine of a ‘Large-Scale Provocation’ With its Raid in Southwestern Russia

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

Financial

Closing Commentary

Quote of the Day: Never find fault with the absent. – Alexander Pope

Equities: Stocks closed lower on Wednesday as the market's attempt to fully recover from Monday's sell-off failed. The Dow Jones Industrial Average fell 234.21 points to 38,763.45. The S&P 500 declined 40.53 points and ended at 5,199.50, while the Nasdaq 100 dropped 210.55 points to close at 16,195.81. At session highs, the Dow surged 480.30 points, while the S&P 500 jumped 1.73%. The tech-heavy Nasdaq was up more than 2% at one point. The benchmark 10-year Treasury yield continued its climb and rose about six basis points to 3.95%. This marked a return to its level prior to the weak jobs numbers on Friday that raised concerns of an economic downturn. On Tuesday, the S&P 500 and the Nasdaq each advanced 1%, while the 30-stock Dow added nearly 300 points on Tuesday. On Monday, the Dow and the broad-market S&P 500 posted their worst session since 2022, fueled by recession worries and the unwinding of the yen carry trade. TECHNICAL OUTLOOK – Both the Dow and S&P are way below the 14, 21 day moving average.

Crude Oil: Oil prices gained more than 2% on Wednesday, bouncing back from multi-month lows, after data showed a bigger-than-expected draw in U.S. crude stockpiles, even as worries about weak oil demand in China persisted. U.S. crude stocks fell for a sixth week in a row, dropping by 3.7 million barrels to 429.3 million barrels last week, government data showed. Industry data from the American Petroleum Institute on Tuesday had shown an unexpected build in crude and gasoline inventories. On Monday, Brent slumped to its lowest since early January and WTI touched its lowest since February, as a global stock market rout deepened on concerns about a potential recession in the U.S. after weak jobs data. Lower production at Libya's 300,000 barrel-per-day Sharara oilfield is also adding to concerns about supply shortages. Libya's National Oil Corp declared force majeure in its Sharara oilfield from Aug. 7, the company said on Wednesday. NOC had said on Tuesday it would start to gradually decrease production at the field due to protests. Tensions in the Middle East continued to stoke supply concerns. The Middle East is bracing for a possible new wave of attacks by Iran and its allies following last week's killing of senior members of militant groups Hamas and Hezbollah, with concern rising that the conflict in Gaza is turning into a wider Middle East war. Iran-aligned Houthi militants on Wednesday targeted a container ship in the Red Sea and two U.S. destroyers in the adjacent Gulf of Aden. Attacks on vessels passing through the region have forced tankers to choose longer alternate routes. Supporting the bearish demand view, Chinese trade data showed that July daily crude oil imports fell to the lowest level since September 2022. China is the world's largest crude importer. TECHNICAL OUTLOOK – The Crude is below the 14, 21 day moving average.

Metals: Gold prices are up just a bit and silver prices are modestly weaker in midday U.S. trading Wednesday. The marketplace has calmed down at mid-week, which has allowed the two precious metals markets to pause, awaiting fresh fundamental developments to drive daily price action. Technically, December gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. September silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $39.355. The next downside price objective for the bears is closing prices below solid support at $26.00. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is now below.

DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

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