Global Economic Daily - 24/05/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Stocks Slide Despite Nvidia Earnings Blowout
• Europe Stocks Close Slightly Higher as Investors Assess Data; Tech Jumps 1% After Nvidia Earnings

Global Fixed Income

• PMI Data, Treasury Yields, Musk Pushes Limits
• Treasury Yields Climb on Positive Economy and Labor Data

Currencies

• Dollar Recovers and Moves Higher as Bond Yields Climb and Stocks Falter
• EUR/USD Forecast: A Test of the 200-Day SMA Looms Closer

Energy

• Crude Oil Backslides Into the Red on Thursday as Diminishing Rate Cut Hopes Weigh
• Crude Oil Continues to Consolidate in a Familiar Range

Metals

• Gold Price Forecast: Breaks Support Levels, Risk of Further Decline
• Silver Continues to See Volatile Moves

Global Politics/News

• No Major Reaction to Fed Minutes
• Ukraine Long-Range Glide Bomb Blunted by Russian Jamming

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

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?Financial

Closing Commentary

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Quote of the Day: Judge a man by his questions rather than his answers. – Voltaire

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Equities: Stocks fell Thursday, with the?Dow Jones Industrial Average?registering its worst day of 2024. The 30-stock Dow slid 605.78 points and closed at 39,065.26 for its worst session of the year. The?S&P 500?dropped 39.17 points closing at 5,267.84, and the?Nasdaq 100?tumbled 81.81 points to end at 18,623.39. Earlier in the session, both the broad-market index and the tech-heavy benchmark reached record highs. The majority of the stocks in the broad market index turned negative Thursday, indicating a lack of market breadth. More than 400 names in the S&P 500 were lower, and information technology was the only positive sector for the day. Stronger than expected economic data also evaporated the rally on Thursday as investors cut their odds of a rate cut in September. Services and manufacturing data for May both topped economists’ expectations, according to purchase manager surveys from?S&P Global?released Thursday. Initial jobless claims for the week ending May 18 came in at 215,000, while economists polled by Dow Jones called for 220,000. The results added to investors’ concerns that the Federal Reserve will not lower interest rates soon. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.

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Crude Oil: Oil prices fell for a fourth consecutive session on Thursday and settled at multi-month lows as the prospect of higher-for-longer U.S. interest rates raised worries around demand growth in the world's biggest oil market. On Wednesday,?minutes?from the U.S. Federal Reserve's latest policy meeting showed policymakers remain doubtful if current interest rates are high enough to tame stubborn inflation. Also weighing on the market,?U.S. crude stocks?rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimated draw of 2.5 million barrels. However, the EIA reported U.S. gasoline demand at its highest since November, providing some support for energy markets ahead of the Memorial Day holiday weekend, which is considered the start of the U.S. summer driving season. U.S. gasoline consumption makes up around 9% of global oil demand. Investors are also looking ahead to the June 1 meeting of the Organization of Petroleum Exporting Countries and its allies, together called OPEC, where the group will decide its output policy. Russia said it?exceeded?its OPEC production quota in April for "technical reasons" and will soon present to the OPEC Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday. Recent weakness in crude oil prices raises the likelihood that OPEC will maintain its existing production curbs at least through the end of September. TECHNICAL OUTLOOK – The Crude is now below the 14, 21 day moving average.

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Metals: Gold and silver prices are sharply lower near midday Thursday, on heavy profit-taking pressure from the shorter-term futures traders as well as weak-handed longs being forced to liquidate their recently established positions that are now under water. An ominously bearish chart pattern has developed this week, to suggest a near-term market top is in place, and that is also prompting technical selling pressure in gold. Fundamentally, slightly more hawkish FOMC minutes released Wednesday afternoon are also weighing on the precious metals markets. Wednesday afternoon’s FOMC minutes from the last Fed monetary policy meeting leaned just a bit more hawkish than the marketplace expected. While the markets expected a “higher for longer” U.S. interest rate theme from the minutes, what the markets did not expect was that several FOMC members indicated they were willing to raise interest rates should inflation risks accelerate. The U.S. stock indexes saw selling pressure after the minutes were released and U.S. Treasury yields up-ticked a bit. Technically, June gold futures bulls still have the overall near-term technical advantage but are fading. A bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,454.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. July silver futures bulls have the firm overall near-term technical advantage but are fading a bit. Prices are in a three-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $32.75. The next downside price objective for the bears is closing prices below solid support at $29.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.

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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