Global Economic Daily - 10/09/2024
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Closing Commentary
Quote of the Day: Zeal will do more than knowledge. – William Hazlitt
Equities: Stocks rebounded on Tuesday following a losing session on Wall Street, as oil prices eased and investors assessed ongoing tensions in the Middle East. The S&P 500 gained 55.19 points to settle at 5,751.13, and the Nasdaq 100 rose 307.04 points to finish at 20,107.78. The Dow Jones Industrial Average added 126.13 points to end at 42,080.37. The start of the new trading month has ushered in a bout of volatility as fears mount of an escalation conflict in the Middle East. Rising bond yields have also weighed on the market, with the rate on the 10-year Treasury topping 4%. The market rallied slightly to end last week after a blockbuster jobs report, and the Dow notched a new all-time closing high. However, enthusiasm faded this week as investors reasoned that the Federal Reserve may not be as aggressive with future rate cuts given the labor market’s strength. Short-term economic data has further signaled a resilient economy, boosting fears that the central bank may “drag their feet” on interest rate cuts from here. TECHNICAL OUTLOOK – The Dow and S&P are above the 14, 21 day moving average.
Metals: Gold and silver prices are sharply lower and hit three-week lows in late-morning U.S. trading Tuesday, on news reports that the Hezbollah group based in Lebanon wants to discuss a ceasefire with Israel. Israel is presently conducting major military operations against the group in Lebanon. Market participants are deeming today’s news as a potential de-escalation of the Middle East tensions that have been elevated for weeks. The Hezbollah news sunk the crude oil market, with Nymex crude down around $3.75 a barrel at $73.50 after hitting a 3.5-month high overnight. The U.S. dollar index has moved above unchanged today and is trading at its daily high, while U.S. Treasury yields have up-ticked lately—both bearish “outside-market” elements for the precious metals markets. The 10-year note yield is presently at 4.028%. The highly anticipated economic briefing by China’s National Development and Reform Commission Tuesday underwhelmed markets, offering little in the way of new stimulus measures. That news prompted sell-offs in the Chinese stock indexes, with the Hang Seng index dropping almost 10% and it’s biggest one-day loss in nearly two years. Technically, December gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,708.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,572.50. December silver futures bulls have the overall near-term technical advantage but are now fading. A seven-week-old uptrend on the daily bar chart is in serious jeopardy and bulls need to show fresh power soon to keep it alive. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $33.50. The next downside price objective for the bears is closing prices below solid support at $29.00. TECHNICAL OUTLOOK – Gold and silver are below the 14, 21 day moving average.
DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
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