Global Economic Daily - 24/04/2024
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Closing Commentary
Quote of the Day: It is better to know some of the questions than all of the answers. – James Thurber
Equities: Stocks ripped higher for a second session on Tuesday as a strong batch of corporate earnings assuaged concerns over higher rates. The Dow Jones Industrial Average climbed 263.71 points to close at 38,503.69. The S&P 500 gained 59.95 points to finish the session at 5,070.55, while the Nasdaq 100 ticked up 260.59 points to end at 17,471.47. Roughly 20% of the S&P 500 has reported earnings through Tuesday. Of those companies, 76% have beaten analysts’ expectations. Elsewhere, Treasury yields pulled back after U.S. manufacturing data hit a four-month low. The S&P Global Flash U.S. manufacturing PMI read 49.9, down from 51.9 in March. TECHNICAL OUTLOOK - The Dow and S&P are now below the 14, 21 day moving average.
Crude Oil: Oil prices rose by more than $1 a barrel on Tuesday as the U.S. dollar index fell to its lowest level in more than a week and investors shifted their focus away from tensions in the Middle East to the state of global economies. Market participants are looking past geopolitical disruptions to focus on economic indicators and overall supply-and-demand balances. Both contracts had dropped by more than $1 a barrel early in the session on easing tensions between Israel and Iran, along with nagging concerns on demand from top oil importer China. Investors are looking to the release later this week of U.S. first-quarter gross domestic product data as well as the March figures for personal consumption expenditures, the Fed's preferred inflation gauge. U.S. crude oil inventories are expected to have increased last week while refined product stockpiles are likely to have fallen. The American Petroleum Institute reported on Tuesday that U.S. crude oil and gasoline stockpiles fell last week, while distillates - which include diesel and heating oil – rose. The U.S. government's official data will be published by the Energy Information Administration at 10:30 a.m. EDT on Wednesday. TECHNICAL OUTLOOK – The Crude is above the 14, 21 day moving average.
Metals: Gold prices are modestly lower and silver modestly higher near midday Tuesday. Both markets hit nearly three-week lows today but are well up from their session lows. Some bargain hunters are stepping in to buy this week’s big dips in prices. Profit taking and weak long liquidation from the shorter-term futures traders has been featured in both precious metals early this week. While major central banks and other longer-term investors have been snapping up gold bullion with no intention of selling it back anytime soon, it’s a different story with the shorter-term futures traders and the high leverage involved. That’s what drove this week’s downdraft in gold and silver prices: weak-handed futures traders (both in the U.S. and overseas futures markets) who are under water. Many of them are likely getting margin calls from their brokers after futures exchanges raised their margin requirements. These shorter-term speculators are being forced to liquidate their losing long positions. Also, the fortunate futures traders that still hold a profit are taking those profits and getting out of the gold and silver futures markets. This is not anything new in futures markets trading. While the gold and silver bulls have lost their upside momentum, both markets remain overall firmly technically bullish. This week’s sell offs in the gold and silver markets are still just significant downside price corrections in major bull runs. However, if the sharp selling pressure continues deeper into this week, near-term technical damage would likely be inflicted to begin to suggest near-term market tops, if not major market tops, are in place. Trading action in gold and silver the rest of this week will be extra important. The bulls need to step up, stop the bleeding and show some fresh power soon to keep their bull runs alive. Technically, June gold futures bulls still have the firm overall near-term technical advantage. However, a nine-week-old uptrend on the daily bar chart has stalled out. Bulls’ next upside price objective is to produce a close above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,250.00. May silver futures bulls still have the firm overall near-term technical advantage. However, a two-month-old price uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at $29.00. The next downside price objective for the bears is closing prices below solid support at $25.00. TECHNICAL OUTLOOK – Gold and silver are above 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
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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