Global Economic Daily - 16/02/2024
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Closing Commentary
Quote of the Day: Too often we… enjoy the comfort of opinion without the discomfort of thought. – John F. Kennedy
Equities: Stocks rose on Thursday. The S&P 500 closed at a new record high, as all three major indexes ended Thursday’s trading session in positive territory, after clawing back the steep losses suffered earlier in the week. This marks the 11th record high that the 500-stock benchmark has cinched so far this year. The broad stock index climbed settling at 5,029.73, while the Nasdaq 100 added 38.09 to close at 17,845.72. The Dow Jones Industrial Average traded 348.85 points higher to end at 38,773.12. Investors have spent the week assessing where things stand in the U.S. economy, but a slew of indicators have given mixed signals so far. Fresh data from Thursday morning revealed that retail sales dropped 0.8% in January. That’s much more than the 0.3% decline expected by economists, according to Dow Jones. This raised some concern about the strength of the U.S. consumer under the weight of sticky inflation and high interest rates, and sent Treasury yields down. Stocks seesawed this week after a hotter-than-expected inflation print sent the market reeling on Tuesday, with the Dow posting its biggest one-day loss since March 2023. The 30-stock index is now 0.26% higher for the week, while the S&P 500 is set to close the week with a 0.06% gain. The Nasdaq, however, is on pace to lose 0.53%. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
Crude Oil: Oil prices rose over 1% on Thursday after U.S. retail data prompted a sell-off in the dollar, though investors eyed an International Energy Agency report that flagged slowing demand growth this year. The U.S. dollar index slid about 0.3% after data showed U.S. retail sales fell more than expected in January. Retail sales dropped 0.8% last month, the Commerce Department's Census Bureau said on Thursday. Data for December was revised lower to show sales rising 0.4% instead of 0.6%, as previously reported. The data prompted optimism around interest rate cuts from the Federal Reserve going forward, which could be positive for oil demand. Further oil price gains were limited, though, by an IEA report on Thursday which said that global oil demand is losing momentum, prompting the agency to trim its 2024 growth forecast to 1.22 million barrels per day from 1.24 million bpd. On the supply side, the IEA estimated that supply will grow by 1.7 million bpd this year, up from its previous forecast of 1.5 million bpd. Both oil benchmark contracts lost more than $1 a barrel on Wednesday, pressured by the rise in U.S. crude inventories as refining dropped to its lowest levels since December 2022. News that two major economies began recessions also weighed on prices. Britain fell into recession in the second half of 2023 when its gross domestic product contracted by 0.3% in the fourth quarter, having shrunk by 0.1% in the third quarter, official data showed. Japan unexpectedly slipped into recession at the end of last year, surrendering its title as the world's third-biggest economy to Germany. TECHNICAL OUTLOOK - The crude is above the 14, 21 day moving average.
Metals: Gold and silver prices are higher in midday U.S. trading Thursday, on corrective rebounds following recent selling pressure and after a U.S. retail sales report that was weaker than expected. Technically, April gold futures saw short covering featured after prices hit a three-month low Wednesday. The bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. March silver futures also saw short covering after prices hit a four-month low Wednesday. The silver bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.445. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. TECHNICAL OUTLOOK – Gold and silver are both 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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