Global Economic Daily - 24/01/2024
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Closing Commentary
Quote of the Day: If you fell down yesterday, stand up today. – H.G. Wells
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Equities:
Stocks were mixed today. The?Dow Jones Industrial Average?fell Tuesday, pulling back from record-breaking highs as traders pored through the latest batch of corporate earnings. The blue-chip Dow slid 96.36 points to 37,905.45, retreating below the 38,000 level that was?crossed for the first time?on Monday. Tuesday’s losses ended a three-day winning streak. The?S&P 500?rose by 14.17 points to 4,864.60, a fresh all-time closing high. The technology-heavy?Nasdaq 100?advanced 73.83 points to 17,404.21. The 30-stock Dow was pressured by an 11% decline in?3M?following disappointing guidance.?Johnson & Johnson?fell 1.6% after reporting earnings. Those moves come after the S&P 500?officially entered a new bull market, topping its previous closing all-time high from January 2022. But investors are deliberating how long the gains can persist, especially as the rally this year has centered around technology stocks such as?Nvidia, lacking broader participation. This month alone, Nvidia is up 20%. In contrast, the small-cap?Russell 2000?is lower by more than 2%. Traders are also awaiting two key data economic data releases later in the week. The preliminary fourth-quarter gross domestic product figure is due Thursday, followed by the Commerce Department’s closely-watched personal consumption expenditures price index for December on Friday. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
Crude Oil:
Oil prices settled lower on Tuesday as traders focused on rebounding crude output in parts of the U.S., along with rising supply in Libya and Norway, rather than risks to supply posed by conflict in Europe and the Middle East. In North Dakota, the third-largest oil-producing U.S. state, some oil output came back online after shutting because of extreme cold, the state's pipeline authority said. However, output was still down as much as 300,000 bpd. Persistent weakness in U.S. gasoline demand has also hit oil prices. While U.S. crude stocks dropped by 6.67 million barrels last week, gasoline inventories jumped by 7.2 million barrels, according to market sources citing American Petroleum Institute figures. Official U.S. government data is due on Wednesday. Norway's?crude production rose?to 1.85 million barrels per day in December, up from 1.81 million bpd the previous month and beating analysts' forecasts of 1.81 million bpd, according to the Norwegian Offshore Directorate. In Libya, production at the 300,000 bpd Sharara oilfield restarted on Jan. 21 after the end of protests that had halted output since early this month. Geopolitical uncertainty limited losses. Crude prices rose by around 2% on Monday after a Ukrainian?drone strike?on Novatek's Ust-Luga Baltic fuel export terminal near Russia's second city St Petersburg raised supply concerns. In the Middle East, tensions rose after U.S. and British forces carried out a second joint round of?strikes?on Houthi positions in Yemen. TECHNICAL OUTLOOK - The crude is barely above the 14, 21 day moving average.
Metals:
Gold and silver prices are slightly up in midday U.S. trading Tuesday, on mild corrective bounces following recent selling pressure. Short covering (the buying back of previously sold, or short, futures positions) from the shorter-term futures traders is featured. A rally in the U.S. dollar index and an up-tick in U.S. Treasury yields today did limit the upside in the precious metals. Technically, February gold futures bulls have the overall near-term technical advantage but have faded recently. A three-month-old uptrend on the daily bar chart is in serious jeopardy. Bulls’ next upside price objective is to produce a close above solid resistance at $2,067.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. March silver futures prices hit a three-month low Monday. The silver bears have the solid overall near-term technical advantage. A steep six-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.72. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. TECHNICAL OUTLOOK – Gold is back above the above the 14, 21 day moving average, while silver remains below it.
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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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