Global Economic Daily - 08/21/2024
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Quote of the Day: Life is far too important a thing ever to talk seriously about. – Oscar Wilde
Equities: Stocks ticked lower on Tuesday, ending a winning streak as investors failed to build on the market’s recent recovery rally. The?Dow Jones Industrial Average?slid 61.56 points to 40,834.97. The?S&P 500?slid 11.13 points to 5,597.12, while the?Nasdaq 100?shed 46.67 points to 19,719.82. Tuesday’s declines snapped?eight-day winning streaks?for the S&P 500 and Nasdaq, the first positive periods of that length for each since late 2023. If the S&P 500 had finished Tuesday up, it would have marked its longest winning streak since 2004. Meanwhile, the Dow notched its first negative day in the last six. Despite Tuesday’s moves, the major averages have bounced back and market volatility has tumbled since the start of the month. Strong retail sales data and a soft inflation report issued last week have helped soothe investors’ fears on the economy. The S&P 500 and Nasdaq are now both higher by more than 1% on the month, underscoring the market’s dramatic turnaround. This week, investors are readying themselves for the Federal Reserve’s annual?Jackson Hole Economic Symposium, where Fed Chair Jerome Powell is scheduled to give remarks Friday. Before then, traders will parse minutes from the central bank’s July policy meeting due Wednesday. Wall Street is looking for hints of what to expect at the Fed’s next policy meeting. TECHNICAL OUTLOOK – Both the Dow and S&P are above the 14, 21 day moving average.
Crude Oil: Oil prices fell about 1% to a two-week low on Tuesday as Middle East supply concerns eased after Israel accepted a proposal to tackle disagreements blocking a ceasefire deal in Gaza, and as economic weakness in China weighed on fuel demand. U.S. Secretary of State?Antony Blinken?visited Egypt and pushed for progress toward a Gaza ceasefire and hostage release deal. Major differences still need to resolved in talks this week. Israel retrieved the?bodies of six hostages?from the Gaza Strip as negotiations continued in an effort to bring back more than 100 captives remaining in the besieged Palestinian enclave. OPEC has said global oil demand growth must accelerate in coming months or the market will struggle to absorb the group's planned increase in supply from October. OPEC member Saudi Arabia, the world's biggest oil exporter, said crude exports fell to 6.047 million barrels per day in June from 6.118 million bpd in May. Data from China, the world's second-largest economy, showed new home prices fell in July at their fastest pace in nine years, industrial output slowed, export and investment growth dipped and unemployment rose. Worries about fuel demand in the U.S., the world's biggest economy, pressured prices for U.S. heating oil futures to their lowest since May 2023 for a second straight day. The heating oil crack spread , which measures refining profit margins, stayed near its lowest since November 2021. Weekly U.S. oil storage data is due from the American Petroleum Institute trade group on Tuesday and the U.S. Energy Information Administration on Wednesday. Analysts projected U.S. energy firms pulled about 2.7 million barrels of crude out of storage during the week ended Aug. 16. If correct, that would be the seventh time U.S. crude stocks declined in the past eight weeks. There was a withdrawal of 6.1 million barrels during the same week last year and an average decrease of 3.4 million barrels over the past five years (2019-2023). TECHNICAL OUTLOOK – The Crude is below the 14, 21 day moving average.
Metals: Gold prices are up a bit at midday Tuesday but down from the record high set in early U.S. trading. December Comex gold futures notched a record high of $2,570.40. Silver prices are also slightly up after hitting a four-week high earlier today. Bullish charts and safe-haven demand, especially from China, are pushing the precious metals markets higher. Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,600.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,450.00. September silver futures bulls have the overall near-term technical advantage and have momentum on their side now. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $28.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
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