Global Economic Daily - 23/02/2024
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Quote of the Day: The time you enjoy wasting is not wasted time. – Bertrand Russell
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Equities: Stocks exploded on Thursday. The S&P 500 surged to new highs on Thursday after chip giant Nvidia reported much stronger-than-expected quarterly results, lifting the broader market and tech sector. The?S&P 500?gained 105.23 points to close at 5,087.03, notching its best day since January 2023. The?Nasdaq 100?advanced 525.80 points closing at 18,004.70. The?Dow Jones Industrial Average?surged 456.87 points to surpass 39,000 for the first time ever and close at a new high of 39,069.11. Shares of?Nvidia?popped 16.4% to an all-time high after the chip company said?total revenue rose a whopping 265% from a year ago?— driven by its booming artificial intelligence business. Nvidia, which has become one of the largest U.S. companies by market capitalization, also forecast another stellar revenue gain for the current quarter, even against elevated expectations for massive growth. AI enthusiasm has powered the jaw-dropping rally in Nvidia, along with other Big Tech names, over the past year. The chipmaker’s blowout quarter could further boost confidence in the space that has benefited the broader market. Phillip Colmar of MRB Partners noted equities are benefiting from earnings growth and firmer economic activity than was expected. He said, however, that stocks could still drop if economic growth eventually becomes priced into higher bond yields. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
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Crude Oil: Oil futures settled higher on Thursday as hostilities continued in the Red Sea with Iran-aligned Houthis stepping up attacks near Yemen, but a large build in U.S. crude inventories weighed on gains. Israel's Army Radio reported on Thursday that Prime Minister Benjamin Netanyahu's war cabinet has approved sending negotiators to Gaza for truce talks taking place in Paris as pressure mounts in the Middle East. Meanwhile, Yemen's Iran-aligned Houthis will escalate their attacks on ships in the Red Sea and other waters and have introduced "submarine weapons," the group's leader said on Thursday, as it keeps up attacks on shipping to show support for Palestinians in the Gaza war. The Red Sea situation continues to ferment and it is starting to register more with the market that this is an issue that is not going away. Europe is bearing the brunt in terms of supply - but European supply problems become U.S. supply problems because that will put a call on US gasoline and diesel. Market players are likely pricing in a potential disruption to supply in the near future, with the front-month contract's premium over the second widening, which indicates a tightening market. Still, crude gains were capped on Thursday by a build in U.S. oil inventories due to refinery maintenance and outages. U.S. crude inventories rose by 3.5 million barrels to 442.9 million barrels in the week ending Feb. 16, the U.S. Energy Information Administration said on Thursday. U.S. crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are soon to resume output. Refinery utilization rates were unchanged last week, at 80.6%, according to EIA data on Thursday, compared with analysts' expectations of an uptick to 81.5%. BP's 435,000 barrel-per-day Whiting refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1. Total Energies' 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage. The outages have drawn down distillate inventories, which include diesel and heating oil. Those stockpiles were down by 4 million barrels in the week to 121.7 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA data showed. TECHNICAL OUTLOOK - The crude is above the 14, 21 day moving average.
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Metals: Gold and silver prices are modestly down and near their session lows in midday U.S. trading Thursday. Solid gains in the U.S. stock indexes and a risk-on trading day today are negatives for the safe-haven metals. Chart-based selling is also featured in gold and silver today as the near-term technical postures for both metals tilt slightly toward the bears. Technically, April gold futures bears have the slight overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. March silver futures bears have the slight overall near-term technical advantage. However, a nine-week-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is back below.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
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