Global Economic Overview - 07/12/2023
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Closing Commentary
Quote of the Day: Eloquence is a painting of the thoughts. – Blaise Pascal
Equities:
U.S. stocks retreated on Wednesday as investors assessed data indicating falling inflation and the jobs report loomed. The Dow Jones industrial Average lost 70.13 points to close at 36,054.43. The S&P 500 shed 17.84 points to 4,549.34, while the Nasdaq 100 dropped 89.66 points to 15,788.05. It was the third losing day for the 30-stock Dow and the S&P 500 — the first since October for both indexes. Stocks relinquished earlier advances, with the Dow at one up nearly 170 points at its session high. All three indexes traded both above and below their respective flatlines in the choppy session. The market initially got a morning boost after economic data. A drop in labor costs boded positively for the path of inflation, while a jump in productivity signaled the potential for the economy to skirt a recession. November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Federal Reserve, was easing. But Wednesday’s ADP report is just one in a string of labor-focused data releases traders are weighing over the course of the week. On Tuesday, Labor Department figures showed job openings in October fell to the lowest level since March 2021. Investors will monitor jobless claims numbers on Thursday before turning attention to widely followed data on November nonfarm payrolls, wages and the unemployment rate due Friday. Wednesday marked the third straight losing session for the Dow and S&P 500. Those declines raised questions around whether the late 2023 rally was taking a pause or if the market had run up too far, too fast. Still, the three major indexes remain poised to finish the fourth quarter and calendar year higher. TECHNICAL OUTLOOK - The Dow and the S&P remain above the 14, 21 day moving average.
Crude Oil: Oil prices fell nearly 4% on Wednesday to their lowest settlements since June, as worries about global fuel demand mounted after U.S. data showed a larger-than-expected rise in gasoline inventories. Concerns over China's economic health and future fuel demand also weighed on prices, a day after rating agency Moody's lowered the outlook on China's A1 rating to negative from stable. An unexpected fall in U.S. crude inventories did little to support prices. Crude inventories fell by 4.6 million barrels, far exceeding the 1.4 million-barrel drop analysts had expected. On Wednesday, Russian president Vladimir Putin traveled to the United Arab Emirates and Saudi Arabia to meet with the UAE's President Sheikh Mohammed Bin Zayed Al Nahyan and Saudi Crown Prince Mohammed bin Salman. Oil and OPEC were on the agenda. Forward prices for U.S. crude were at their steepest premium to prompt barrels, a sign of ample supply and growing fears of slow demand. TECHNICAL OUTLOOK - The crude remains below the 14, 21 day moving average.
Metals: Gold was higher today while silver faltered a bit. Gold prices are higher just before midday Wednesday. The yellow metal is seeing some backing and filling on the charts after prices Monday spiked to a record high of $2,152.30, basis February Comex futures. A drop in U.S. Treasury yields this week is a supportive element for the gold and silver market bulls. Traders and investors are awaiting key U.S. economic data points that lie just ahead. Technically, February gold futures prices Monday scored a record high of $2,152.30 and then promptly reversed course to sell off sharply and score a technically bearish "key reversal" down on the daily bar chart. That's one chart clue the bulls are out of gas and that a near-term market top is in place. The bulls still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. March silver futures prices Monday scored a big and bearish "outside day" down on the daily bar chart. The bulls appear to have run out of gas to suggest a near-term market top is in place. The silver bulls do still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week's high of $26.34. The next downside price objective for the bears is closing prices below solid support at $23.00. TECHNICAL OUTLOOK – Gold and silver are both 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
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