Pirmadienis, 20 gegužės, 2024

US Stocks End Mixed, Crypto Slides, Commodities Shine

US stocks end in mixed on Thursday, as traders assessed economic data and the latest earnings reports. The Dow Jones Industrial Average lost 45 points, or 0.1%, to 35,029, snapping a four-day win streak. While the Nasdaq Composite gained 15 points, or 0.1%, to 15,882, and the S&P 500 added 0.1%, to 4,690. The energy sector was the biggest laggard, falling 2.3%. While the utilities and technology sectors outperformed, rising 1.1% and 0.5%, respectively.

US Stock Market

Among individual stocks, Walmart declined 8.1% to $131.88 after the company expressed concerns about the outlook for consumer spending amid rising inflation and supply chain disruptions. Cisco Systems saw a 9.8% drop to $50.03 due to weak guidance for the current quarter and full year. Reflecting lower demand for its networking products and services. Palo Alto Networks fell 5.4% to $545.11 after issuing a disappointing forecast on billings, a key metric of future revenue. Also, Chevron lost 2.6% to $97.77, hitting a 13-month low, amid a sharp decline in oil prices, Which fell below $75 a barrel for the first time since September.

Conversely, Microsoft gained 1.7% to $376.17, reaching an all-time high, as the software giant continued to benefit from strong cloud computing and gaming businesses. Macy’s rose 5.7% to $31.01 as the department store chain reported better-than-expected profits and raised its full-year outlook. Thanks to higher online sales and improved margins.

Microsoft gained 1.7% to $376.17, reaching an all-time high
MSFT price

With markets now indicating zero chance of a December interest rate hike by the Federal Reserve. The likelihood of a rate cut in the middle of next year is increasing, according to the CME FedWatch Tool. The Fed has been facing pressure to tighten its monetary policy sooner than expected, as inflation in the US hit a 31-year high of 6.2% in October.

Bitcoin and Ether Down

Bitcoin and Ether are experiencing declines on Thursday, as investors take profits after a recent rally. Bitcoin has slipped 3.63% to $58,734, while Ether is down 3.03% to $4,267, according to CoinMarketCap.

The crypto market has been volatile in the past week, as several factors influenced the sentiment of traders. On the positive side, the launch of the first Bitcoin futures exchange-traded fund (ETF) in the US, the ProShares Bitcoin Strategy ETF, attracted more than $1 billion in assets under management in its first week of trading.

On the negative side, the uncertainty over the regulatory environment for cryptocurrencies in China and the US has weighed on the market. China has intensified its crackdown on crypto activities, banning all transactions and mining operations in the country. The US Securities and Exchange Commission (SEC) has also signaled that it will impose more rules and oversight on the crypto industry. Especially on stablecoins, which are digital tokens pegged to fiat currencies or other assets.

Bitcoin is experiencing declines on Thursday
Bitcoin price

Top Commodity Gainers

Silver, gold and hot-rolled coil steel are the top commodity gainers on Thursday. Investors seek safe-haven assets amid rising geopolitical tensions and inflation worries. Silver is up 1.82% to $24.64 per ounce, gold is up 1.27% to $1,869 per ounce. Hot-rolled coil steel is up 0.68% to $1,813 per short ton, according to Trading Economics.

Gold is up 1.27% to $1,869 per ounce
Gold Futures price

CAD Weakens

The Canadian dollar weakened towards the 1.38 per USD level, paring recent gains as lower oil prices and softening risk appetite weighed on the Canadian currency. Crude oil benchmarks fell to multi-month lows amid new data showing lower fuel demand in key consumers in Asia and North America, dampening the demand for the loonie, which is closely linked to the commodity sector.

Additionally, signs of disinflation in Canada and evidence of a slowing economy drove markets to expect the Bank of Canada (BoC) to refrain from further interest rate hikes. Offsetting the support from a lower greenback. Headline inflation fell more than expected to 3.8% in October, from 4.4% in September.

The BoC raised its benchmark interest rate by 25 basis points to 0.5% in October, becoming the first major central bank to tighten its monetary policy since the onset of the pandemic. The move was seen as a preemptive measure to curb inflationary pressures and cool down the overheated housing market. However, the BoC also signaled that it will proceed with caution and data-dependence, as the economic outlook remains uncertain and uneven.

The Canadian dollar has appreciated more than 10% against the US dollar since the start of the year. Reaching a six-year high of 1.20 in June, as the Canadian economy outperformed its southern neighbor in the first half of the year.

Canadian Dollar chart

Mortgage Rates Drop

The average rate on a 30-year fixed mortgage was 7.46% as of November 16th. Dropping for the third consecutive week and 35 basis points below the 23-year high from the end of October. The result was in line with the sharp pullback in long-dated Treasury yields, as markets pared expectations on how long the Federal Reserve will hold its terminal rate. One year ago, the average rate on the 30-year fixed mortgage was 6.61%.

Mortgage rates are closely tied to the yield on the 10-year Treasury note, which reflects the market’s expectations of future inflation and economic growth.

Manufacturing Index Negative

The Kansas City Fed’s Manufacturing Production index was at -3 in November of 2023. Improving from -8 in the previous month but maintaining the negative territory for the third consecutive period. Both durable goods and nondurable goods manufacturing indices ticked up slightly in the period, although the former remained below zero.

The developments occurred amid a fresh decline in the backlog of orders. Overpowering the stall in the volume of new orders. Declines were also noted for the number of employees (-5), consistent with other reports pointing to a loosening labor market in the US. And the average employee workweek (-7), aligning with lower demand for capacity.


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