S&P 500 hit fresh intraday records as stock market extends climb to fresh peaks

U.S. stocks on Tuesday opened slightly higher as equity benchmarks extended a multisession rise powered by hope of a more favorable tax regime and an upbeat outlook for coming corporate results. The Dow Jones Industrial Average DJIA, +0.09% opened up 32 points, or 0.1%, at 22,591, the S&P 500 index SPX, +0.12% climbed 2 points, or 0.1%, at 2,531, while the Nasdaq Composite Index COMP, +0.04% gained 9 points, or 0.1%, at 6,525. The S&P 500 and the Dow hit opening intraday records early in the session, with the Nasdaq not far behind. All three major stock gauges finished at all-time highs on Monday, as well as the small-cap oriented Russell 2000 Index RUT, -0.28% shaking off the grimness of a Sunday massacre in Las Vegas that left 59 people dead and scores more injured. In corporate news, shares of gun makers were still in focus, after Sunday’s mass shooting, with Smith & Wesson-parent American Outdoor Brands Corp. AOBC, -0.06% trading higher after strong gains on Monday. Meanwhile, shares of home builder Lennar Corp. LEN, +1.92% were climbing after better-than-expected corporate results

Gold prices log third straight decline

Gold prices logged a third decline in a row on Tuesday, pressured by record highs in U.S. stock benchmarks, as recent strength in the dollar and Treasury yields lured some investors away from the precious metal.

December gold on Comex GCZ7, +0.10%  fell $1.20 , or less than 0.1%, to settle at $1,274.60 an ounce, settling at the lowest level since Aug. 8 for a second straight session.

U.S. government bond yields got a boost off increased expectations that Federal Reserve Chairwoman Janet Yellen and fellow policy makers are inclined to lift interest rates once more before the end of 2017. The 2-year Treasury yield note TMUBMUSD02Y, +0.28% the most sensitive to shifting interest-rate expectations, hit a 52-week high on Monday, but it has pulled back to trade more recently at 1.463% Tuesday.

Higher bond yields, which move inversely to prices, can make owning gold, which doesn’t offer interest, less appealing. The exchange-traded SPDR Gold Shares ETF GLD, +0.28% meanwhile, traded up 0.1%.

Mihir Kapadia, CEO of Sun Global Investments, said gold is being pressured by strength in the greenback, and a downturn in physical buying. The dollar, as measured by the U.S. ICE Dollar Index DXY, -0.03% which gauges the currency against a half-dozen rivals, was almost flat on the day but gained about 1% last week. Dollar strength tends to make buying bullion, which is priced in dollars, less attractive to investors using weaker currencies.

“With the chatter over [President Donald] Trump’s choice for Fed chair starting to dominate, gold really is all about the greenback right now,” said Adrian Ash, head of research at BullionVault.

From the 12-month peak on Sept. 8, gold has lost roughly 6.5%—and “it’s dropped at its fastest pace versus the dollar since December 2016’s sharp correction,” he said.

“The metal might rally if the dollar now drops—say, on Trump picking ‘low-rate Yellen’ over ‘rate-rise [Kevin] Warsh’ within the 2-3 week deadline the president just set himself,” said Ash. Gold’s “strongly negative correlation with the dollar” might also “crack—perhaps if the S&P SPX, +0.12% jumps on the prospect of lower for longer from the Fed.”

Meanwhile, U.S. stocks, notably the Dow Jones Industrial Average DJIA, +0.09%  and the S&P 500 index, were setting more records. Much of the enthusiasm around equities has been driven by optimism that Trump’s administration will implement tax policies, including tax cuts and repatriation of money held abroad, that could boost appetite for risky assets and away from gold.

In other metals trading, December silver SIZ7, +0.10%  lost less than half a cent to $16.650 an ounce, while the silver ETF, iShares Silver Trust SLV, -0.13% rose 0.3%.

December copper HGZ7, +0.78%  added under a penny to $2.964 a pound. January platinum PLF8, +0.26%  fell 0.1% to $915.50 an ounce and December palladium PAZ7, +0.38%  rose 0.6% to $916.90 an ounce.

Dow maintains record rally as Tillerson dismisses ‘petty nonsense’ over ‘moron’ remark and recommits to Trump

The Dow Jones Industrial Average saw its gains firm on Wednesday after Secretary of State Rex Tillerson addressed reports that he was on the verge of leaving President Donald Trump’s administration and referred to POTUS as a “moron.” In a news conference at around 11 a.m. Eastern on Wednesday, Tillerson, a former head of Exxon Mobil Corp. XOM, +0.04% rebutted a report from NBC News, citing multiple senior administration officials, that claimed that he thought ill of the president and considered resigning. Tillerson reaffirmed his commitment to Trump in his conference, however, he didn’t appear to outright deny the claim that he called Trump a name, saying that it was “petty nonsense” to entertain those accusations. Most recently, the Dow DJIA, +0.09% was up 0.1% at 22,662, while the S&P 500 index SPX, +0.12% was up about a point, or less than 0.1%, at 2,535, hitting an intraday record earlier. The Nasdaq Composite Index COMP, +0.04% was trading 0.1% lower at 6,522. All three benchmarks closed at all-time highs on Tuesday and have been bolstered by hope that a pro-market tax proposal will be passed in Congress.

Dow posts record close as Fed meeting starts, Trump talks to the UN

Dow posts record high as the Fed kicks off two-day monetary policy meeting 12 Hours Ago | 01:05

U.S. equities rose on Tuesday as the Federal Reserve kicked off a two-day monetary policy meeting.

The Dow Jones industrial average posted its 41st record close of the year, rising 39.45 points to 22,370.80. Verizon and Goldman Sachs contributed the most to the gains.

The S&P 500 gained 0.1 percent to a record of 2,506.65, with telecommunications and financials leading advancers. The Nasdaq composite advanced 0.1 percent and also posted a record close of 6,461.32.
The three major indexes had posted intraday highs on Monday.

The Fed is not expected to raise rates following its meeting. However, many market participants believe the central bank will announce the unwinding of its $4.5 trillion portfolio.

“They’ve kind of laid out the principles for the balance-sheet reduction process, but I expect to see that more formalized,” said Eric Stein, co-director of global income at Eaton Vance.

The U.S. central bank amassed most of its massive balance sheet as it tried to bring the economy back to life following the financial crisis.

“This is going to be unprecedented and every central bank in the world will be watching how” the Fed accomplishes this, said Quincy Krosby, chief market strategist at Prudential Financial. “But investors will also be looking for clues about whether we’ll get another rate hike in December.”

The Fed has already raised interest rates twice this year and it expects to hike once more before year-end. Market expectations for a December rate hike rose to 58.3 percent on Tuesday on strong imports data.

U.S. import prices posted their biggest gain in seven months in August amid a spike in petroleum costs.

Treasury yields rose slightly, with the benchmark 10-year yield at 2.24 percent and the two-year yield at 1.401 percent.

Wall Street also looked to the United Nations, where U.S. President Donald Trump tried to rally members to confront threats like North Korea. In a speech to the U.N. General Assembly, Trump said “North Korea’s reckless pursuit of nuclear weapons and ballistic missiles threatens the entire world with unthinkable loss of human life.”

Tension between the U.S. and North Korea has escalated recently. Last week, the isolated Asian nation launched a missile that flew over Japan before landing in the sea.

The launch took place after the U.N. Security Council unanimously imposed a ban on North Korea’s textile exports and capped its crude oil imports.

Investors also kept an eye on tax-reform prospects, after Sen. Bob Corker told reporters that GOP lawmakers had reached a tentative tax reform-budget deal. Wall Street has been waiting for clarity on tax reform since Trump won the president.

The market’s reaction to the news, however, was muted.

“The market is waiting for something more concrete at this point before really responding,” said Tim Alt, director of rates and currencies at Aviva Investors. “And with the Fed on tap for tomorrow, nobody wants to make any big bets.”

Gold range-bound ahead of US Fed policy statement

Gold held to a narrow range on Wednesday, with investors in a wait-and-see mode ahead of the outcome of a two-day U.S. Federal Reserve meeting that began on Tuesday.

Spot gold rose 0.1 percent to $1,312.54 an ounce by 0308 GMT.

U.S. gold futures for December delivery were up 0.4 percent at $1,316 an ounce.

“Trump’s comments overnight in regards to North Korea have certainly added a bid to the precious complex but all in all very quiet ahead of the (Fed statement),” a Sydney-based trader said, adding that the dollar was providing some support.

U.S. President Donald Trump escalated his standoff with North Korea over its nuclear challenge on Tuesday, threatening to “totally destroy” the country and mocking its leader, Kim Jong Un, as a “rocket man”.

Geopolitical risks tend to boost demand for safe haven assets such as gold and the Japanese yen.

The dollar edged slightly lower against a basket of currencies and against the yen on Wednesday. Asian stocks were steady as movements were limited ahead of the Fed’s monetary policy stance later in the day.

The U.S. Fed is expected to announce its balance sheet reduction plans later on Wednesday and provide an outlook for interest rate hikes for the rest of the year.

A stronger dollar makes the greenback-dominated bullion more expensive for those holding other currencies. Higher interest rates lead to higher bond yields and dampen demand for non-interest bearing gold.

“The majority of the consensus is there will be one more hike this year, and if that remains the case, gold should still remain reasonably well supported with what’s happening geopolitically,” the trader said.

“I think $1,300, $1,290 is certainly a good base for gold unless the Fed changes its wording with regards to how many hikes there will be in the coming months,” the trader said.

Spot gold still targets $1,299 per ounce, said Reuters technicals analyst Wang Tao.

Among other precious metals, silver edged 0.2 percent lower to $17.29 an ounce. Platinum rose 0.5 percent to $953.10 an ounce, after hitting its lowest since early August in the previous session.

Palladium gained 0.6 pct to $913.80 an ounce, after dropping to its lowest since mid-August on Tuesday.

Oil rises after Iraq signals possible OPEC cut extension

Oil prices rose on Wednesday after Iraq’s oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories.

U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.7 percent, at $49.81 a barrel at 0419 GMT. Brent crude futures climbed 23 cents, or 0.4 percent, to $55.37.

While options being considered by the Organization of the Petroleum Exporting Countries and other producers include an extension of cuts in output by months, it is premature to decide on what to do beyond March, when the agreement expires, Iraqi oil minister Jabar al-Luaibi told an energy conference in the United Arab Emirates on Tuesday.

 OPEC and producers including Russia have agreed to reduce output by about 1.8 million barrels per day until March 2018 in a bid to reduce global oil inventories and support prices.

“That won’t be easy as the productivity of oil rigs in the U.S. is expected to rise, so they can get more oil out of the same amount of rigs.”

Meanwhile, U.S. crude stocks rose last week while gasoline and distillate stocks decreased, data from industry group the American Petroleum Institute (API) showed on Tuesday.

Crude inventories rose by 1.4 million barrels in the week to Sept. 15 to 470.3 million, compared with expectations for an increase of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 422,000 barrels, API said.

Official figures on stockpiles and refinery runs will be released by the U.S. Department of Energy later on Wednesday.

Week Ahead: S&P 500 Extends Losses, Oil Awaits Inventory Numbers

Last week was dominated by politics, from the attempt to recuperate from the North Korea tensions, Charlottesville, and terror in Europe.

The S&P 500 extended a second-week of losses at 2.07-percent, its worst two-day fall since February 2016. It appears that even after seven months of no cohesive agenda, investors are still holding onto to the notion of reflation under President Donald Trump. The market narrative attributes most of last week’s losses to a reduced likelihood of Trump executing his agenda after receiving backlash to his Charlottesville moral equivalency statement.
Monetary Policy

The FOMC minutes from the July meeting revealed key topics among the policy makers: is the inflation impotency temporary or a long-term problem, and what are the implications for the interest rate path? The end result is that the Fed raised rates twice this year, with a possible third on the way. That doesn’t change the economic trajectory.

Investors are keenly aware that any uncertainty expressed by the Fed will compound political hesitation.
Broad-Base Expansion In The EU, But Monetary Policy Uncertain

While economic data has been strengthening in Europe, confirming repeated reports of the non-US market’s advantages—economically, politically and from a valuation perspective—ambiguity across the EU is creating significant potential for market volatility.

The European growth rate is catching up with the US at almost 2.5 percent. Germany was not the only country pushing Europe’s growth; rather, it was joined by the Netherlands and even Italy—after recovering from the verge of a banking crisis. This broad-base expansion provides a more reliable trajectory of further expansion for the Eurozone.

The DAX has been trading in a short-term falling trend since June 20. On August 11, it bounced off the uptrend line since June 24, 2016, the day the Brexit vote results were revealed. The significance of this uptrend line is confirmed by the 200 dma (red) that is retracing it.

However, although the price found support it stopped short of overcoming the short-term downtrend line and has since turned back down. A further bearish indication was the dead-cross execution, when the 50 dma (green) crossed below the 100 dma (blue) on Friday.

The price is fluctuating, and is looking for an opening for the price to move into; either the short-term downtrend line – with a break above 12400.00 – or longer-term uptrend line – with a break below 11800.00.

Palladium has rallied to levels not seen in 16 years

Palladium touched its highest levels in more than 16 years Friday, as ongoing concerns about tight supplies and expectations for record demand put prices for the metal on track to score their largest yearly gain in seven years

On Friday, the most-active September palladium contract PAU7, -0.18%  traded as high as $935.40 an ounce—the highest intraday level since February 2001, according to FactSet data. It settled at $927.10 an ounce, up 95 cents, or 0.1%, on Friday—marking its highest settlement in more than 16 years.

The metal has gained around 3.6% for the week, adding to a year-to-date rise of roughly 35%—which would be the largest yearly advance since 2010.

“Due to the high demand and limited availability of palladium, there is market deficit of over 1 million ounces,” said Mark O’Byrne, research director at Dublin-based GoldCore. “The apparent five-year-long market deficit has begun to affect the availability of aboveground stocks.”

That comes at a time when demand from the automotive industry, the biggest buyer of the metal, has climbed 4% for the year, he said.

“Much of palladium’s increased demand is thanks to increased demand for SUV vehicles, which have to abide by tightening emission legislation from the [European Union], said O’Byrne. “The latest announcement in the UK regarding a ban on diesel engines will also help to boost demand as consumers shift from diesel to petrol engines.”

Russian nickel and palladium producer Norilsk Nickel said earlier this week that it expects consumption of palladium to each an all-time high of 10.8 million ounces this year.

Overall, the outlook for demand “suggests that there is little letup for the tight supply conditions the palladium market is currently experiencing,” O’Byrne said.

Gold flat as dollar hits nearly 2-week highs

Gold prices edged lower on Tuesday, pressured by a rebound in the dollar, after U.S. job openings topped forecasts, pointing to an improving labor market, lifting expectations the Federal Reserve will keep to its plan to raise rates at least once more this year.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell $3.04, or 0.23%, to $1,261.74 a troy ounce.

Gold struggled to hold onto gains, as the dollar hit a nearly two-week high, after U.S. job openings, a measure of labor demand, increased 461,000 to a seasonally adjusted 6.2 million, the highest level since the series started in December 2000, the Labor Department said on Tuesday.

Losses in the precious metal were limited, however, as some Fed members suggested that the slowdown in inflation will continue to weigh on the Fed’s ability to raise rates even if the U.S. job market continues to improve.

“The current level of the policy rate is likely to remain appropriate over the near term,” Bullard said on Monday.

The producer price index and the consumer price index data due Thursday and Friday, is expected to provide market participants with fresh insight into the pace of inflation.

The slowdown in inflation, has weighed on the prospect of rate hikes later this year, pressuring both the dollar and bond yields while boosting demand for the precious metal.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Other precious metal shrugged off dollar strength, as silver futures rose 0.90% to $16.397 while platinum futures rose by 0.30% to $974.60.

Silver Eyes Bullish Flag

Silver futures seem ready to take the next step to enter into a Bullish Flag Pattern. After moving into a Bullish Channel since July 10 and touching the lowest point, a quick reversal on the same day, confirmed the solidarity of the move in the daily chart and confirms the occurrence of an up move ahead. I sensed this pattern in advance and noted it in my analysis, but readers hardly wanted to believe this due to growing volatility in precious metals. No doubt, the Silver futures price dipped all of a sudden on July 10, 2017 after my appearance of my analysis but the reversal in a daily was evident enough to form a Bullish Hammer which confirmed my phenomenon of the beginning of an uptrend ahead.

On analysis of the movement of Silver futures price since the beginning of its uptrend, inside a “Bullish Channel” till August 1st, 2017, I find this bullish voyage still has a long way to go ahead. I find many supporting factors in the current scenario to make the continuity of this Bullish Voyage more prudent amid growing geopolitical concerns and investors’ hope to seek the safest heaven before their fellow beings.

Second solid factor seems to be the hopes of Bears which have been crushed and the Bears are forced to cover their shorts. Once the bullish move brings the price above the levels of $17.281, second phase of shorts covering will definitely be helping the Bulls to take the command in their hands, and finally the Silver futures price will able to make sustainable moves inside a “Bullish Flag Zone” to attain new heights.

Have a Nice Trading Time.

Disclosure: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you are prepared to lose.