Global Economic Daily - 19/08/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Stocks See Best Week in ’24 as Buyers Race Back In
• Europe Stocks Close Higher to Round Off Winning Week; Sterling Gains After Slew of UK Data

Global Fixed Income

• Treasury Yields Fall as Investors Digest Economic Data
• Treasury Yields Snapshot: August 16, 2024

Currencies

• US Dollar Declines Below 103.00 as Fed Sets to Cut Interest Rates in September
• EUR/USD Moves Higher to Near 1.1000 as US Dollar Remains Inside Woods

Energy

• S. Oil and Gas Rig Count Falls for Second Week
• Crude Oil Continues to See Range Playing Out

Metals

• Gold Price Forecast: New Highs and Future Projections
• Silver Continues to Threaten the Same Level

Global Politics/News

• Retail Earnings, Fed Chair Powell’s Speech
• Ukrainian Forces Left a Path of Destruction on Their March to the Russian Town of Sudzha

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: The question isn’t who is going to let me; it’s who is going to stop me. – Ayn Rand

Equities: U.S. stocks rose on Friday as investors closed out the best week of 2024, part of a market comeback from a violent rout to begin August. The S&P 500 added 11.03 points to 5,554.25, while the Nasdaq 100 gained 18.38 points to 19,508.52 on Friday. The Dow Jones Industrial Average rose 96 points to 40,659.76. For the week, the S&P 500 added nearly 3.9%, its best week since November 2023. The Nasdaq gained 5.2%, while the 30-stock Dow advanced 2.9% on the week. Following the comeback this week, the S&P 500 is now just 2% away from its mid-July record high. Data this week helped assuage a jittery market. Retail sales data released Thursday came in much stronger than economists expected, while weekly jobless claims fell. Both offered evidence that recession fears, which helped spark a global sell-off earlier this month, were overblown. Inflation readings released earlier this week also bolstered hopes that a soft landing scenario was still possible. The Dow dropped 1,000 points and the S&P 500 had its worst day since 2022 on Aug. 5 as investors feared the Federal Reserve was too late to cut interest rates and the economy was slipping into a recession. A hedge fund currency trade unwind added to the market volatility. But investors stepped in to buy since then, with the S&P 500 gaining for seven days in a row as economic reports quelled recession concerns. The Nasdaq posted its best week since November 2023. On Friday, consumer sentiment rose more than expected, according to the latest University of Michigan survey. TECHNICAL OUTLOOK – Both the Dow and S&P are above the 14, 21 day moving average.

Crude Oil: Oil prices settled down nearly 2% on Friday, little changed on the week with Brent crude below $80 a barrel, as investors tempered expectations of demand growth from top oil importer China. Oil futures rallied at the start of the week as traders braced for retaliation by Iran against Israel over the slaying of a Hamas leader in Tehran last month. But some of that risk was priced out because Iran has not struck yet, analysts at Commerzbank Research wrote on Friday. A fresh round of Gaza ceasefire talks began on Thursday in Qatar. It has been paused until next week, with involved parties sending mixed signals on progress. A string of data releases from the U.S. kept a floor under oil prices: retail sales beat analysts' expectations, and fewer Americans filed new jobless claims last week, sparking renewed optimism around economic growth in the biggest oil market. Oil prices could lack direction until the U.S. Federal Reserve decides whether to cut interest rates at its September meeting. TECHNICAL OUTLOOK – The Crude is back below the 14, 21 day moving average.

Metals: Gold prices are solidly up in early U.S. trading Friday, as the chart-based speculators are featured buying as the yellow metal prices are not far below record highs. Two key “outside markets” are also friendly for the precious metals today as the U.S. dollar index is weaker and bond yields have down-ticked. Technically, December gold bulls have the solid 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 $2,400.00. September silver futures bears have the overall near-term technical advantage. However, a nearly three-month-old downtrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $29.355. The next downside price objective for the bears is closing prices below solid support at the August low of $26.505. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is still below.

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

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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