Global Economic Daily - 13/05/2024
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Quote of the Day: An effort made for the happiness of others lifts above ourselves. – Lydia M. Child
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Equities: Stocks had a strong end of the week on Friday. The?Dow Jones Industrial Average?rose on Friday, wrapping an eighth consecutive winning session and registering its best week of 2024. The 30-stock index added 125.08 points to close at 39,512.84. The?S&P 500?climbed 8.60 points, ending at 5,222.68, while the?Nasdaq 100?inched lower by 47.72 points to end at 18,161.18. The major averages also wrapped the week on a high note. The Dow posted a 2.16% gain for the period, its best week since December and its fourth positive week in a row. The S&P 500 and the Nasdaq Composite both posted a third consecutive winning week, rising 1.85% and 1.14%, respectively. Investor enthusiasm was kept in check after consumer sentiment data released Friday morning showed a big uptick in inflation expectations. The preliminary May reading for the University of Michigan’s consumer sentiment index came in at 67.4, far below a Dow Jones estimate of 76 and marking its lowest reading in about six months. Investors have been more optimistic lately after the Fed indicated the next move is unlikely to be a hike, pointing to a cap on interest rates that could be bullish for equities. Cooler labor data has also raised traders’ confidence in the outlook for this year. However, markets will be put to the test?next week?when April’s consumer price index reading is released. TECHNICAL OUTLOOK - The Dow and S&P are back above the 14, 21 day moving average.
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Crude Oil: Oil prices fell by nearly $1 a barrel on Friday as comments from U.S. central bank officials indicated higher-for-longer interest rates, which could hinder demand from the world's largest crude consumers. Dallas Federal Reserve President Lorie Logan on Friday said it was unclear?whether monetary policy was tight enough?to bring down inflation to the U.S. central bank's 2% goal. Atlanta Fed President Raphael Bostic also told Reuters he thought inflation was likely to slow under current monetary policy, enabling the central bank to begin reducing its policy rate in 2024 - though perhaps by only a quarter of a percentage point and not until the final months of the year. Oil prices were also under pressure from rising U.S. fuel inventories approaching the typically robust summer driving season. Oil drew little support from the U.S. oil rig count, which is an indicator of future supply, despite energy services firm Baker Hughes data showing the number of oil rigs fell by three to 496 this week, their lowest since November. Data on Thursday showing China imported more oil in April than the same month last year also helped keep oil prices from moving lower. China's exports and imports?returned to growth?in April after contracting the previous month. The European Central Bank, meanwhile, looks increasingly likely to start?cutting rates?in June. In Europe, a Ukrainian drone attack set an oil refinery in Russia's Kaluga region on fire, RIA state news agency reported on Friday, the?latest salvo?from Kyiv in what has become a series of tit-for-tat attacks on energy infrastructure. Conflict in the Middle East?also continues after Israeli forces bombarded areas of the southern Gaza city of Rafah on Thursday, according to Palestinian residents, after a lack of progress in the latest round of negotiations to halt hostilities in Gaza. TECHNICAL OUTLOOK – The Crude is below the 14, 21 day moving average.
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Metals: Gold and silver prices are posting good gains and hit three-week highs in early U.S. trading Friday. The two precious metals late this week have shot sharply higher on notions of central banks easing their monetary policies sooner rather than later. The safe-haven metals traders are on this day apparently focusing more on the better consumer and commercial demand prospects for metals. Technically, the gold futures bulls have the solid overall near-term technical advantage. A price downtrend on the daily bar chart has been negated and prices have just seen a bullish upside “breakout” from the recent trading range. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. The silver bulls have the firm overall near-term technical advantage and have gained good power this week. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $27.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
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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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