Day: July 17, 2024

Wall Street indices are trading mixed; tech stocks notably decline

Posted on by Ignacio Teson

The Dow Jones explores new highs while its peers decline due to widespread losses in large tech stocks. Chips lead the losses.

The three main Wall Street indices have mixed performances Wednesday morning. The Dow Jones, composed of shares from 30 industrial giants, moves moderately up by 0.54% to 41,174.56 points, while the S&P 500 is down 1.25% at 5,596.38 points, and the Nasdaq technology retreats 2.62% to 18,023.84 points.

Market sentiment is affected by reports that the United States is considering imposing stricter restrictions on chip companies. Large tech companies, which have led gains this year, are dragging down the averages.

Shares of Apple Inc, the largest company in the market, are down 2.73% to $228.42, while Nvidia, the artificial intelligence technology giant, falls 6.44% to $118.23. Other related stocks are also declining sharply.

[[SPX-graph]]

Whether large tech companies can maintain leadership will depend on earnings. Pullbacks are healthy and provide markets with opportunities to adjust, offering buyers better prices.

The pressure aims to prevent China from continuing to grow in a booming strategic sector. In the past, US efforts to weaken China’s chip market have caused strong reactions in global markets.

Investors also recalled that US presidential candidate Donald Trump said Taiwan had taken 100% of the US chip business and should now pay for the defense it has received.

Chip companies Marvell Technology, Broadcom, Qualcomm, Micron Technology, Advanced Micro Devices, Arm Holdings, and Super Micro Computer each fell more than 5%. The S&P 500 technology index led sectoral declines with a 2.7% drop.

The Mexican stock market fell sharply due to risk aversion towards risky assets

Posted on by Ignacio Teson

Local stock indices fell affected by a global wave of risk aversion, driven by fears of new US restrictions on China.

Mexican stock exchanges concluded Wednesday’s trading with losses. Local stock indices fell affected by a global wave of risk aversion, driven by fears of new US restrictions on China.

The main index of the Mexican Stock Exchange (BMV), the S&P/BMV IPC, which measures the most traded local stocks, dropped 1.15% to 53,744.78 points. The FTSE BIVA index of the Institutional Stock Exchange (Biva) declined 1.11% and closed at 1,100.72 units.

Within the benchmark index, most stocks closed with losses. Cemex led the decline, falling 4.79% to 11.52 pesos, followed by Grupo Carso, down 4.09% at 126.67 pesos, and Televisa, which dropped 3.71% to 8.82 pesos.

Investors also reacted to the quarterly report from giant América Móvil, released yesterday after market close. The company’s shares fell 1.30% to 15.98 pesos, following a net quarterly loss attributed to currency factors.

In other news from Mexico, US Ambassador to Mexico Ken Salazar reported that migrant flow at the shared border has decreased by more than 50% over six months.

US Secretary of State Antony Blinken acknowledged that Mexico has taken significant steps to reduce irregular migration.

Speaking from Washington alongside Secretary of Foreign Affairs Alicia Bárcena, Blinken assured that both countries are working together to achieve orderly, safe, and humane migration.

Oil prices closed higher due to a drop in inventories in the US.

Posted on by Ignacio Teson

The Brent premium over WTI narrowed to around $3.74 per barrel, the lowest since October 2023. The reduction in the differential means energy companies have less incentive to spend money on shipping tankers to the United States to collect crude for export.

Oil prices rose more than 2% on Wednesday, driven by a larger-than-expected weekly drop in US crude inventories and a weaker dollar overshadowing signs of slower economic growth in China.

Brent crude futures gained $1.35, or 1.61%, to $85.08 per barrel. West Texas Intermediate (WTI) crude futures advanced $2.09, or 2.59%, to $82.85.

On Tuesday, Brent closed at its lowest level since June 14 and WTI at its lowest since June 21.

The Brent premium over WTI narrowed to around $3.74 per barrel, the lowest since October 2023. The reduction in the differential means energy companies have less reason to spend money on shipping tankers to the United States to collect crude for export.

[[USOIL-graph]]

In the United States, the Energy Information Administration said energy companies withdrew 4.9 million barrels of crude from storage during the week ending July 12.

This compares with an expected drop of 30,000 barrels forecast in a Reuters survey and a decrease of 4.4 million barrels in a report from the American Petroleum Institute trade group.

A weaker dollar also helped support oil prices after the US currency hit a 17-week low against a basket of major currencies. A decline in the dollar can boost crude demand by making dollar-denominated commodities like oil cheaper for holders of other currencies.

Mexican Peso Falls Due to Potential Stricter U.S. Restrictions on China

Posted on by Ignacio Teson

The currency and its regional peers focused losses in a session marked by the possibility of the US imposing stricter trade restrictions on China regarding chips.

The Mexican peso depreciated this Wednesday. The currency and its regional counterparts fell affected by a global wave of risk aversion, spurred by reports that the United States is considering imposing stricter trade restrictions on China.

The exchange rate ended the day at 17.7192 units. Compared to yesterday’s close of 17.6439 pesos, as per the official data from the Bank of Mexico (Banxico), this movement meant a loss of 7.53 cents for the currency, equivalent to 0.43 percent.

The price of the dollar moved within an open range, reaching a high of 17.8135 units and a low of 17.6481. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against a basket of six currencies, fell 0.50% to 103.75 units.

[[USD/MXN-graph]]

Concerns about the possibility of further US restrictions on China, particularly in the chip sector, overshadowed comments from Federal Reserve officials about rate cuts that weakened the dollar against its major counterparts.

From a technical standpoint, analysts at Intercam Casa de Bolsa mentioned that the peso’s loss encountered initial resistance levels at 17.82 pesos, with extensions to 17.88 per dollar, while support was found at 17.72 pesos, extending to 17.68 units.

The peso was pressured by fears of trade restrictions involving China and its access to chips. The exchange rate operated up to 17.81. Most of the depreciation was observed in Latin American currencies.

Ethereum Poised to Outshine Bitcoin with Upcoming ETF Introduction

Posted on by Arslan Butt

As the launch of Ethereum (ETH) spot Exchange Traded Funds (ETFs) approaches, the cryptocurrency landscape is showing signs of a significant shift. Data from recent reports, including analyses by Kaiko and a joint study by Block Scholes and Bybit, indicate a changing pattern in trading volumes across spots, futures, options, and perpetual contracts.

This shift in market dynamics comes after the U.S. Securities and Exchange Commission (SEC) green-lit Ethereum spot ETFs in May, sparking a wave of optimism among investors.

The data suggests Ethereum is beginning to enjoy a volatility premium over Bitcoin (BTC), bolstered by an uptick in address activities and a favourable shift in market sentiment towards Ethereum.

Continue reading “Ethereum Poised to Outshine Bitcoin with Upcoming ETF Introduction” →

Is XRP Set For A Comeback? Another Record-Breaking All-Time High This 2024?

Posted on by Sophia Cruz

Like most cryptocurrencies, XRP gained a massive bullish momentum last week, showcasing a remarkable performance. Interestingly, the token’s current state reflects a past rally that led to XRP reaching an all-time high a few years ago.

 

Is XRP Set For A Comeback? Another Record-Breaking All-Time High This 2024?

 

According to CoinMarketCap, XRP bulls dominated last week, with the token’s price rising over 25%. At press time, XRP was trading at $0.61, with a total market cap of $34.23 billion.

Milkybull, a popular crypto analyst, tweeted about a major development: XRP appears to be following a pattern similar to 2017. That year, a bullish pennant formed on its chart, and a breakout above the pattern led to the token reaching an ATH in 2018. 

A similar pattern seems to be forming in 2024. Therefore, if history repeats itself, investors might see XRP reaching new highs in the coming months. 

A significant catalyst driving the bullish momentum has been Ripple’s first anniversary commemorating a landmark victory over the SEC.

On July 13, 2023, XRP received accolades and saw intense market demand following US District Judge Analisa Torres’ declaration that XRP is not a security, marking a pivotal ruling. The court determined that Ripple’s sale of XRP on public exchanges did not breach securities laws. 

This favorable legal outcome prompted major exchanges such as Coinbase and Kraken to relist XRP, thereby enhancing investor confidence significantly. 

As XRP trades nearly $0.65, nearing notable resistance at $0.70. According to Fibonacci retracement levels, crucial support is observed around $0.48 (23.6%) and $0.43 (38.2%), levels that XRP has previously tested and maintained. These supports are pivotal for sustaining the current bullish trend. 

A breakthrough above the $0.70 resistance could indicate additional upward potential, aiming for targets around $0.80 or potentially higher if the momentum continues.

Asian Stock Market Mixed: Japan Manufacturing Confidence Rises, Australian Index Hits Record Tracking Wall St Rally

Posted on by Sophia Cruz

In today’s trading, Asian stocks mostly declined despite investors betting on a Federal Reserve interest rate cut. However, Australia’s benchmark reached a new record. 

 

Asian Stock Market Mixed: Japan Manufacturing Confidence Rises, Australian Index Hits Record Tracking Wall St Rally

 

Japanese stocks posted solid gains, driven by reports of increased business optimism among large manufacturers. According to TickMill market analyst Patrick Munnelly, Asian stocks rose in tandem with a global surge, as expectations of the Federal Reserve reducing interest rates prompted a move into riskier market sectors.

The MSCI Asia Pacific Indes, which tracks regional benchmarks, rebounded after a three-day decline, buoyed by record highs in US equities that pushed global stocks following the US warning to its allies about stricter trade regulations amid a crackdown on China. 

The mixed performance underscores the market’s sensitivity to geopolitical developments, particularly in US-China trade relations, and highlights the ongoing volatility as investors navigate these uncertainties. 

The Nikkei 225 index lost early gains and fell 0.4% to 41,097.69. Reports indicated that the Finance Ministry might have intervened in the currency market last week, purchasing nearly 6 trillion yen ($37 billion) to support the yen. 

China’s market also closed lower, with the Shanghai Composite falling 0.45% to 2,962.86 and the Shenzhen Component dropping 0.47% to 8,835.14. Major decliners in Shanghai included China Grand Automotive Services and Olympic Circuit Technology, both plunging around 10%.

Hong Kong’s Hang Seng Index managed a slight gain of 0.06%, closing at 17,739.41.

Elsewhere in Asia, South Korea’s Kospi declined by 0.8% closing at 2,843.29. Australia’s S&P/ASX 200 climbed 0.73% to reach 8,057.90, setting another record high.

Crude Oil Bounces $2 Off MAs As EIA Inventories Draw

Posted on by Skerdian Meta

In June, oil prices surged significantly but have since declined this month. However, moving averages are holding steady, and the decrease in EIA inventory has helped halt the fall, resulting in a $2 increase in WTI crude oil today. WTI saw an increase of more than $10 last month, peaking at $84, but reversed direction in the first half of July, falling below $80 and hitting lows of $79. Today’s market movement suggests that the trend remains optimistic, with moving averages providing price support.

EIA inventories showed a huge drawdown for the week

Factors Influencing Oil Prices

Crude oil prices rose by $12 in June, driven by anticipated summer fuel consumption spikes and escalating tensions in the Middle East. However, weaker-than-expected demand growth in Asia, particularly China, the world’s top oil importer, has slowed price hikes. Official figures indicate that China experienced its slowest economic growth since early 2023 in the second quarter, expanding by only 4.7%.

WTI Oil Chart Daily – The 100 SMA Is Acting As Support

This sluggish growth rate is reducing global oil demand. At the same time, the strength of the U.S. dollar, evidenced by its steady rise over the past three sessions, has made oil more expensive for holders of other currencies, negatively impacting oil prices. However, concerns about potential supply disruptions due to increasing tensions in the Middle East, coupled with the draw in EIA inventories and technical analysis, have contributed to today’s price rebound.

Weekly EIA Crude Oil Inventory Report

  • Crude oil draw: -4.870M (vs. expected draw of -0.033M)
  • Gasoline inventories build: 3.328M (vs. expected draw of -1.600M)
  • Distillates build: 3.454M (vs. expected draw of -0.833M)
  • Cushing drawdown: -0.875M (vs. last week’s -0.702M draw)
  • Refining utilization: -1.7% (vs. expected -0.1%; previous +1.9%)

US WTI Crude Oil Live Chart

 [[WTI-graph]]

Dow and S&P 500 Hit New Peaks as Markets Anticipate Rate Cut

Posted on by Arslan Butt

On a buoyant Tuesday, the Dow Jones Industrial Average catapulted upwards by over 700 points, marking yet another record close. Concurrently, the S&P 500 ascended to a new zenith, fueled by expectations of an impending rate reduction by the Federal Reserve.

UnitedHealth’s impressive performance significantly supported the surge of more than 1.8% in the blue-chip index, with its stock climbing nearly 7% following robust earnings results.

Across the spectrum, stocks ended the day in positive territory, driven by unexpectedly strong earnings from various sectors and a surprising uptick in retail sales. The S&P 500 wrapped up with a 0.6% increase, while the Nasdaq Composite edged up by 0.2%.

Financial Sector Shows Resilience

Financial giants such as Bank of America and Morgan Stanley also ended the day positively. Despite a drop in quarterly profits, Bank of America exceeded expectations, hinting at resilience in the financial sector.

Morgan Stanley, on the other hand, showcased a significant profit leap, signaling a potential revival in investment banking.

The stock market’s optimism is largely anchored on recent comments by Federal Reserve Chair Jerome Powell, who hinted at a near-term initiation of rate cuts following favourable inflation data.

June’s retail sales data further bolstered this sentiment, coming in flat but surpassing forecasts, which has reinforced confidence in a potential rate decrease in September. According to CME FedWatch tool, traders are now fully betting on the Fed to reduce borrowing costs in the coming month.

Political Dynamics and Market Sentiment

In addition to economic indicators, political developments are also shaping market dynamics. The market is closely watching political manoeuvres as former President Donald Trump, after a narrowly escaped assassination attempt, appears to strengthen his bid for the White House with the selection of Senator J.D. Vance as his running mate. This move is perceived to bolster his candidacy further.

In this complex interplay of earnings performance, economic data, and political events, the market remains a hotbed of activity, with investors keenly watching the Federal Reserve’s next moves.

The anticipation of lower interest rates is creating a bullish outlook not just for technology stocks but across broader market sectors, promising an intriguing end to the fiscal quarter.

S&P 500, Nasdaq Down Today As FED’s Waller Calls for Rate Cuts

Posted on by Skerdian Meta

The major US market indices, such as S&P 500 are lower today after being bullish and setting new record highs earlier this week, led by the NASDAQ. The NASDAQ index was down more than 1.6% at the start of the US session, and has been declining since. The S&P is also down, with US chip makers significantly contributing to the decline in major indices. Fed Governor Waller, who was scheduled to speak at 9:35 AM ET, made dovish remarks, suggesting that rate cuts are likely. This is generally positive news for the stock market, as it implies a shift of money from Treasuries into stocks due to lower income from rates. Continue reading “S&P 500, Nasdaq Down Today As FED’s Waller Calls for Rate Cuts” →