Connect with us

Precious Metals

Gold price: guarded optimism to define the market ahead of NFP jobs data

Gold price remains range-bound as the market remain fixated on Friday’s nonfarm job data. Investors will likely refrain from big bets ahead of the highly…

Share this article:



This article was originally published by Invezz - Commodities

Gold price remains range-bound as the market remain fixated on Friday’s nonfarm job data. Investors will likely refrain from big bets ahead of the highly anticipated data.

gold price
gold price

NFP jobs data

In the ensuing sessions, the market will remain fixated on the nonfarm jobs data scheduled for release on Friday. Notably, employment numbers remain a key determinant of the Fed’s monetary policy. In recent meetings, Jerome Powell has insisted that the central bank will maintain its accommodative monetary policy until further progress is made in employment.   

In the Jackson Hole symposium held last week, the Fed Chair held a cautious stance. While he hinted that tapering will likely commence before the year’s end, he was quick to add that that shouldn’t be viewed as a precursor for rate hikes.

The Fed’ dovish tone in the previous week boosted gold price above the resistance-turn-support level of $1,800. From this perspective, Friday’s data will likely rekindle inflation talks. Lower-than-expected job numbers will weigh on the dollar while acting as a bullish catalyst for precious metals.

In the immediate term, the market will be reacting to the ADP nonfarm employment numbers. Analysts expect 613,000 additional people to have been employed in non-farm private entities in August compared to the prior month’s 330,000.     

Gold price technical outlook

Since Friday, gold price has been trading within a tight range as it remains buoyed above the crucial level of 1,800. During this timeframe, it has largely been trading between 1,819.70 and 1,807.42. On Monday, the bulls failed in their attempt to reach the prior resistance level of 1,825. On Tuesday, the precious metal held above the support level of 1,800 by a whisker.  

At the time of writing, gold price was down by 0.1% at 1,812.05. On a two-hour chart, it is trading slightly above the 25 and 50-day exponential moving averages. In the immediate term, the precious metal will likely continue to find support along the 25-day EMA at 1,811.65. Subsequently, it will probably remain within a tight range as investors stay fixated on the nonfarm jobs data. From that perspective, it may find resistance at Tuesday’s high of 1,819.70.

Heightened bullish momentum may push the price further to 1,825. On the flip side, a move below its current support level will likely place it along the 50-day EMA at 1,807.42. Overall, I expect the precious metal to remain steady above 1,800 in the short term.

gold price
gold price

The post Gold price: guarded optimism to define the market ahead of NFP jobs data appeared first on Invezz.


US stocks close in a sea of red as tax hike fears grow

US stocks closed the week in a sea of red on Friday September 17 after technology shares led the broad losses across segments and tax hike fears dragged…

Share this article:

US stocks closed the week in a sea of red on Friday, September 17, after technology shares led the broad losses across segments and tax hike fears dragged the benchmark indices down.

The S&P 500 fell 0.91% to 4,432.99. The Dow Jones fell 0.48% to 34,584.88. The NASDAQ Composite Index declined 0.91% to 15,043.97, and the small-cap Russell 2000 was up 0.18% to 2,236.87.

Markets have been volatile this week amid mixed global cues. Loses in the Asian markets over worries of slow economic recovery and recent geopolitical developments weighed on investors’ minds. The tech-savvy Nasdaq declined the most.

In addition, the recent retail sales and unemployment data offered mixed signals about the US economy. While retails sales were up in August, jobless benefits claims rose noticeably last week.

Meanwhile, lawmakers were considering a proposal to hike corporate tax. The news could be worrisome for some investors as a tax hike may eat into the companies’ profits. Democrats are seeking to increase the corporate tax from the current 21% to 26.5%.

Investors will now eagerly wait for the Fed’s monthly meeting next week. The central bank officials are expected to discuss the latest economic data as they continue with the stimulus tapering talks.

All the S&P 500 stock segments stayed in the negative territory. Technology and communications services stocks were the biggest losers, pushing the index down. Stocks of vaccine manufacturers Moderna, Inc. (MRNA) and Pfizer Inc. (PFE) plunged 3.57% and 1.34%, respectively.

Invesco Ltd. (IVZ) stock rose 5.71% after reports that it is in talks to merge with the asset management unit of State Street Corporation (STT). STT stock declined 2.47% in intraday trading.

SmileDirectClub, Inc. (SDC) shares surged 12.92% after the stock was discussed on social media.

AbCellera Biologics Inc. (ABCL) stock rose 2.53%, a day after the US Food and Drug Administration extended the emergency use authorization for its covid drug Bamlanivimab.

In technology stocks, Apple Inc. (AAPL) fell 1.94%, Microsoft Corporation (MSFT) fell 1.65%, and ASML Holdings N.V. (ASML) declined 3.18%. Adobe Inc. (ADBE) and Cisco Systems, Inc. (CSCO) fell 1.75% and 1.19%, respectively.

In communication stocks, Alphabet Inc. (GOOG) fell 2.08%, Facebook, Inc. (FB) declined 2.96%, and T-Mobile US, Inc. (TMUS) declined 1.19%. In addition, Sea Limited (SE) dropped 1.23%, and Snap Inc. (SNAP) advanced 3.08%.

In the material sector, BHP Group (BHP) fell 4.46%, Rio Tinto Group (RIO) fell 3.02%, and Vale S.A. (VALE) fell 2.21%. Ecolab Inc. (ECL) and Freeport-McMoRan Inc. declined 2.01% and 4.10%.

Also Read: Check these 5 oil and gas stocks with high price-to-earnings ratio


Copyright ©Kalkine Media 2021

Also Read: ASAN, FORG, & DATS stocks shine on higher demand hopes

Top Gainers

Top performers on S&P 500 included Thermo Fisher Scientific Inc (6.49%), Invesco Ltd (5.46%), Centene Corp (4.95%), Diamondback Energy Inc (3.18%). On NASDAQ, top performers were Corvus Pharmaceuticals Inc (135.40%), Helbiz Inc (96.56%), Priority Technology Holdings Inc (47.23%), Innate Pharma SA (40.87%). On Dow Jones, Amgen Inc (0.93%), UnitedHealth Group Inc (0.80%), American Express Co (0.79%), Procter & Gamble Co (0.16%) were the leaders.

Top Losers

Top laggards on S&P 500 included Unum Group (-6.04%), International Flavors & Fragrances Inc (-5.53%), Copart Inc (-5.46%), Nucor Corp (-4.49%). On NASDAQ, Protagonist Therapeutics Inc (-62.00%), TCR2 Therapeutics Inc (-36.45%), Eliem Therapeutics Inc (-21.92%), Janux Therapeutics Inc (-20.26%). On Dow Jones, Dow Inc (-2.89%), Caterpillar Inc (-1.89%), Apple Inc (-1.83%), Microsoft Corp (-1.75%) were the laggards.

Volume Movers

Top volume movers were Bank of America Corp (43.29M), Nov Inc (41.49M), Apple Inc (40.72M), AT&T Inc (38.62M), Oracle Corp (37.24M), Lucid Group Inc (39.05M), Match Group Inc (36.06M), SoFi Technologies Inc (33.81M), Tellurian Inc (28.37M), Corvus Pharmaceuticals Inc (26.47M).

Also Read: Top five mid-cap retail stocks with more than 100% YTD gain

Futures & Commodities

Gold futures were down 0.22% to US$1,752.85 per ounce. Silver decreased by 1.87% to US$22.367 per ounce, while copper fell 1.15% to US$4.2322.

Brent oil futures decreased by 0.45% to US$75.33 per barrel and WTI crude was down 0.81% to US$71.97.

Bond Market

The 30-year Treasury bond yields was up 1.13% to 1.902, while the 10-year bond yields rose 2.43% to 1.363.

US Dollar Futures Index increased by 0.33% to US$93.227.

Continue Reading


Stocks Stumble For 2nd Straight Week Amid Debt Ceiling Doubts, FOMC Fears, & Gamma Unclench

Stocks Stumble For 2nd Straight Week Amid Debt Ceiling Doubts, FOMC Fears, & Gamma Unclench

The usual avalanche of debt-ceiling fearmongering…

Share this article:

Stocks Stumble For 2nd Straight Week Amid Debt Ceiling Doubts, FOMC Fears, & Gamma Unclench

The usual avalanche of debt-ceiling fearmongering has begun (which of course will continue until 1 second before the deadline when an agreement will suddenly be found) and that along with anxiety ahead of next week's FOMC and today's gamma unclenching from quad witch expirations did not help dip-buyers save stocks for the week.

Nasdaq was the week's biggest loser and a late-day buying spree into the OpEx pushed Small Caps into the green barely for the week...

Energy stocks massively outperformed on the week while Materials were the big laggards...

Source: Bloomberg

But anxiety remains as Debt Ceiling doubts have created quite the kink in the bills curve...

Source: Bloomberg

And pushed the anxiety proxy to cycle highs...

Source: Bloomberg

Analysts at Eurasia Group, a political risk consultancy, suggested the dangers for investors are significant.

"Republican intransigence over increasing the debt limit and Democratic overconfidence that they will be able to pressure Republicans into doing so is creating unusually high risks of the U.S. crossing into a technical default on its debt sometime in late October," they wrote in a note on Thursday.

"Congress will at some point increase the debt ceiling, but it may require the pressure of a technical default and market sell-off to get there," the Eurasia Group team also said.

"Based on our analysis of the incentive structure of both sides at this time, we see that risk at 20%."

In fact, the market is finally starting to reflect the chance of a technical default - albeit still small - as short-term USA default risk spiked dramatically this week (NOTE in Oct 2015, USA 1Y CDS spiked to 40bps)...

Source: Bloomberg

For now, it seems everyone is just full of Fed liquidity-based optimism...

The S&P 500 fell back below its 50DMA after an initial bounce (something we haven't seen recently on these bounces as we note that ~30% of SPX gamma expired at today's open and 60% of SPY, 35% of QQQ, and a very large set of stock options expired on the close)...

The Dow is back at/below its 100DMA and Small Caps are hovering around their 50DMA.

VIX spiked back above 20 as hedgers piled in ahead of next week's FOMC...

Both Defensives and Cyclicals were lower this week - modest rotation midweek, but by the close, pretty systemic selling...

Source: Bloomberg

The Dollar surged further today, extending the week's gains to erase all losses from Jay Powell's Jackson Hole speech...

Source: Bloomberg

Treasury yields were all higher on the week, led by the belly (5Y +6bps, 30Y +0.5bps)...

Source: Bloomberg

10Y Yields spiked further to a key resistance level this week...

Source: Bloomberg

And 10Y Yields broke back above their 200DMA...

Source: Bloomberg

30Y Yields spiked up to their 50DMA today and found resistance...

Source: Bloomberg

Cryptos were broadly higher on the week with Bitcoin and Ethereum up around 5%. Litecoin ended the week up 4.5% after the Walmart partnership fake news spiked it 35% on Monday...

Source: Bloomberg

Big gains in the dollar this week weighed on 'some' commodities with copper and PMs down but the energy complex rallied with crude up significantly...

Source: Bloomberg

Gold fell back below $1800...

Silver was clubbed like a baby seal back below $23...

WTI rallied back above $72 this week...

And Nattie exploded higher recently, only to tumble today...

Finally, amid all that vol in commodity-land, CPI this week, and today's UMich inflation expectations, Stagflation remains the big worry...

Source: Bloomberg

Get back to work Mr.Powell!

Tyler Durden Fri, 09/17/2021 - 16:00
Continue Reading


“Monster Reallocation” Sees Biggest Stock Inflow Since March, Largest Ever Inflow To Large Cap Funds

"Monster Reallocation" Sees Biggest Stock Inflow Since March, Largest Ever Inflow To Large Cap Funds

Flows into mutual funds and related…

Share this article:

"Monster Reallocation" Sees Biggest Stock Inflow Since March, Largest Ever Inflow To Large Cap Funds

Flows into mutual funds and related investment products showed sharply higher net purchases of equity products, steady inflows into fixed income, and another week of FX flow into CNY and JPY; of these the most notable was the $51.2BN going into stocks (with the usual distribution of $52.7bn into ETFs, offset by $1.6bn out of mutual funds) - the largest inflow since March 21 - following +$13bn the prior week; Separately $16.1BN went to bonds, a tiny $37MM to gold (still the largest in 6 weeks), all coming out of money markets, as cash saw a decline of $61.8BN, the largest outflow since July 20.

The acceleration reflected higher net inflows into the US market, which saw $45.7 billion in inflows, the most since March 21, while flows into global benchmark products and EM equities decelerated slightly, and demand for non-US DM equity products was roughly steady:

  • Japan: largest inflow in 3 weeks ($0.1bn)
  • Europe: largest inflow in 4 weeks ($0.1bn)
  • EM: inflows past 6 weeks ($1.8bn)

By sector, the largest net inflows (scaled by AUM) were into industrials.

Commenting on this week's fund flows, in his latest Flow Show note (more in a subsequent post), BofA's Michael Hartnett noted a "monster reallocation" in cash to stocks as the "tax redistribution threat" recedes and "as Fed was expected to remain Wall St-friendly", leading to what the latest Fund Manager Survey dubbed the easiest liquidity since the peak of the last credit bubble in July 2007 (a finding confirmed by Goldman's own liquidity indicator which has never been easier).

And with the floodgates now open, besides the massive equity reallocation, last week also saw the largest inflow to US large cap funds ever ($28.3bn), the 12th week of tech inflows with $3.2BN entering this week, the largest since Mar’21...

... and the largest inflows to energy since Jun’21, at $1.0BN.

Summarizing the inflow distribution by style:

  • US large cap ($28.3bn),
  • US growth ($6.9bn),
  • US small cap ($4.2bn), US value ($1.6bn).

And by sector:

  • tech ($3.2bn),
  • consumer ($1.1bn),
  • healthcare ($1.0bn),
  • energy ($1.0bn),
  • financials ($0.6bn),
  • materials ($0.3bn),
  • utils ($0.2bn),
  • com svs ($0.1bn),
  • real estate ($95mn).

Away from equities, flows into global fixed income funds also picked up slightly on the week (+$16bn vs +$13bn the prior week), the largest inflows in 10 weeks, as most product categories experienced higher net inflows, with the exception of IG credit funds and EM bond funds, both of which saw moderately lower (but still positive) net inflows. Here is the full breakdown:

  • Largest IG bond inflow in 3 weeks ($8.7bn)
  • HY bond inflows past 3 weeks ($1.1bn)
  • EM debt inflows past 3 weeks ($1.4bn)
  • Largest Munis fund inflow in 3 weeks ($1.2bn)
  • Largest MBS inflow since Apr’21 ($1.0bn)
  • Govt/Tsy fund inflows past 2 weeks ($1.0bn)
  • TIPS inflows past 43 weeks ($1.0bn)
  • Bank loan inflows past 8 weeks ($0.6bn)

Within EM bonds funds, the mix of demand shifted toward hard currency and away from local currency this week. Money market fund assets declined by $62bn.

Tyler Durden Fri, 09/17/2021 - 15:05
Continue Reading