Global Economic Daily - 24/07/2024
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Closing Commentary
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Quote of the Day: Consistency is the last refuge of the unimaginative. – Oscar Wilde
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Equities: Stocks had a down day on Tuesday. The?S&P 500?hovered near the flatline Tuesday as traders readied for earnings reports from major technology behemoths. The broad index dipped 8.67 points to close at 5,555.74 a day after it notched its best performance in more than a month, while the?Nasdaq 100?inched down 68.53 points to finish at 19,754.34. The?Dow Jones Industrial Average?lost 57.35 points to end at 40,358.09. Despite those disappointments, earnings season is off to a strong start. About 20% of S&P 500 companies have posted second-quarter results, with 80% of those names beating expectations. The shift to small caps also comes as investors grow increasingly excited that the Federal Reserve will soon begin lowering interest rates, a move seen as particularly helpful for smaller and more cyclically oriented companies. TECHNICAL
OUTLOOK – Both the Dow and S&P is above the 14, 21 day moving average.
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Crude Oil: Oil prices fell about 2% to a six-week low on Tuesday on rising expectations of a ceasefire in Gaza and growing concerns about demand in China. Brent futures fell $1.39, or 1.7%, to settle at $81.01 a barrel, while U.S. West Texas Intermediate crude closed $1.44, or 1.8%, lower at $76.96. That was the lowest closes for Brent and WTI since June 7 and pushed both benchmarks into technically oversold territory for the first time since early June. In the Middle East, efforts to reach a ceasefire deal between?Israel and militant group Hamas?under a plan outlined by U.S. President Joe Biden in May and mediated by Egypt and Qatar, have gained momentum over the past month. Israeli Prime Minister Benjamin Netanyahu told families of hostages held in Gaza that a deal to secure their release could be near even as?fighting raged?in the Palestinian enclave. Biden is?expected to meet?Netanyahu on Thursday at the White House. The war in Gaza has lent support to oil futures as investors priced in the risk of potential disruptions to global crude supply in the key producing regions of the Middle East. United Nations Special Envoy to Yemen Hans Grundberg?warned of a real danger?of a devastating regional escalation following new Iran-backed Houthi attacks on commercial shipping and the first Israeli air strikes on Yemen in retaliation for Houthi drone and missile attacks on Israel. The market is looking for direction from weekly U.S. oil storage data from the American Petroleum Institute trade group later on Tuesday and the U.S. Energy Information Administration on Wednesday. Analysts projected U.S. energy firms pulled about 1.6 million barrels of crude out of storage during the week ended July 19. If correct, that would be the first time U.S. crude stocks declined for four weeks in a row since September 2023 and compares with a decrease of 600,000 barrels in the same week last year and an average decline of 1.8 million barrels over the past five years. TECHNICAL OUTLOOK – The Crude is below the 14, 21 day moving average.
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Metals: Gold prices are trading moderately higher in midday U.S. trading Tuesday, as the overall technical posture for the yellow metal remains bullish. That continues to invite the chart-based speculators to the long side of the market, including doing some perceived bargain hunting when the market dips. Silver prices are slightly down and hit a five-week low overnight. Technically, August gold bulls still have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,488.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. September silver futures bulls have the slight overall near-term technical advantage but have faded badly recently. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at $28.00. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is now 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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