|Bid||0.00 x 36200|
|Ask||0.00 x 40000|
|Day's Range||25.00 - 25.10|
|52 Week Range||23.09 - 25.17|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.76%|
The US Dollar Index rose ~0.1% to ~94.15 yesterday, while August WTI oil futures rose 0.4% to $74.11 per barrel. The appreciating US Dollar Index may have limited oil prices’ upside.
The US non-farm payroll figure for June improved at a marginally slower rate than in May. In June, 213,000 jobs were added compared to 244,000 in May. The data for June, however, beat the market expectation of 195,000 job additions. The broader market S&P 500 Index (SPY), the Dow Jones Industrial Average Index (DIA), and the NASDAQ Composite Index (QQQ) rose 0.85%, 0.41%, and 1.34%, respectively, on Friday, July 6, after the announcement of the non-farm payroll report. The US unemployment rate threw a surprise for June as it grew to 4.0% from 3.8% a month earlier.
The PowerShares DB US Dollar Index Bullish ETF (UUP), which provides exposure to the dollar’s futures contracts, has risen 3.3% year-to-date (or YTD) and 6.5% since late March. The recent run to safe-haven assets following the tariff announcements, in concert with the Fed’s hawkish tone, has supported the US dollar. The ECB’s (European Central Bank) tone was more dovish than expected in its last meeting, which supports the monetary policy divergence theory and favors the US dollar. While the rally in the US dollar might have dominated the foreign exchange markets for the last few months, that could be about to change.
Gold prices have gone through a rough patch recently with prices closing near their seven-month lows. Gold is hitting lows despite many factors that are favoring its safe-haven status. Despite the escalation of trade war fears and political tensions in the European Union, gold prices have been trending lower. While these factors have helped gold, the US dollar is also attracting bids because of these factors, which has capped gold’s gains.
The dollar softened against a broad range of currencies on Thursday as investors anticipated the minutes of the last Federal Reserve meeting and Friday's June employment numbers. Industrial orders in the largest economy in the European Union reported an increase of 2.6% in May compared in a 2.5% decline in April. Reports that the Trump administration could be planning to hold off on imposing tariffs on cars imported from the European Union if the bloc eliminated duties on U.S. cars also prompted gains for the markets.
Futures Down, Oil Hovers Around Highs, Dollar Up All major indexes (NYSEARCA:SPY) (NYSEARCA:QQQ) are down this morning. Some say it’s trade jitters, the common scapegoat for any negative moves recently. Others say it’s dollar strength, or the beginning signs of economic trouble or what have you. We are within 1.2 points of the 52 week […] The post Market Morning: Stocks Plummet Again, Tesla Milestone, Inflation Jumps appeared first on Market Exclusive.
The US Dollar Index rose ~0.4% to ~94.7 on June 26, while August WTI oil futures contracts rose 3.6% to $70.53 per barrel that same day. However, a strong dollar is usually bearish for oil prices. The rise in the Dollar Index could have limited the upside for oil prices on June 26.
Could Gold Prices Remain Supported as Trade Risks Rise? Gold (GLD) hasn’t been able to rise amid rising geopolitical and trade war concerns in 2018, primarily due to increasing strength in the US dollar. This trend could have resulted from investor confidence that a trade war wouldn’t impact the US economy much.
A fundamental factor of the world commodities markets that many investors fail to appreciate is that, in most cases, the assets are priced and traded in U.S. dollars. This relationship is one of the key reasons that commodity prices have broadly weakened in recent weeks as the U.S. dollar has strengthened on the heels of increasing hype about trade wars and other geopolitical factors. In this article, we take a look at several charts suggesting that the sell-off in commodities could be overblown and that strategic traders may actually be looking to buy given the lucrative risk-to-reward setups.
Economic data released from the euro area remained upbeat as economic data that included German and French business activity was better than expected. The other major factor that drove the euro higher was the assurances by Italian politicians that their nation would stay within the European Union. European equity markets, which are tracked by the Vanguard FTSE Europe ETF (VGK), didn’t have the same enthusiasm as the euro, as new tariff threats to the European car industry from the Trump administration unnerved investors.
Could Gold Prices Remain Supported as Trade Risks Rise? As we discussed in the previous part of this series, the Trump administration has been escalating trade war tensions with China. The administration’s planned initiatives relate to cutting off technology that China needs to deliver on its Made in China 2025 strategy.
ABN Amro believes that there is more downside to gold prices (IAU) from the current levels, although it would be temporary. The firm sees gold prices falling to $1,250 per ounce by the end of 2018 before rallying in 2019. It believes the US dollar’s (UUP) strength could the major driver of gold’s weakness in 2018.
Previously, we discussed some measures China could implement to counter US tariffs. Another route China could take would be currency devaluation. Devaluing the Chinese currency (CNY) against the US dollar (UUP) could partially offset the impact of tariffs, reducing costs of Chinese imports into the United States.
The US Dollar Index (DXY)(UUP) has risen 8.3% since its low on February 15. On June 18, the US Dollar Index regained strength and rose to 11-month-high price levels. The bullishness in the US dollar (USDU) in the last couple of months is mostly related to US economy’s improved performance compared to most of the rest of the developed world.
The US Dollar Index rose ~0.3% to 95.08 on June 19, while August WTI oil futures contracts fell 1.2% to $64.90 per barrel on the same day. The strong US Dollar Index pressured oil prices on June 19.
The British pound (FXB) depreciated 0.95% against the US dollar (UUP) for the week ending June 15 and closed at 1.33. The pound took a backseat as the US and European central bank policy meetings dominated the forex space last week. British equity markets (BWX) posted the fourth consecutive weekly loss in the last 12 weeks, which reflected the global risk-off sentiment.
On June 8–15, US crude oil July futures fell 1%. On June 15, US crude oil July futures settled at $65.06 per barrel. Last week, the US dollar rose 1.3%—a negative development for oil prices. The PowerShares DB US Dollar Bullish ETF (UUP), which tracks the US dollar, rose 1.3% last week.
Investors often assume there must be a news catalyst or a "reason" for price movement when a stock, commodity, or index breaks out and declines significantly. While that is often true, sometimes breakouts can be driven merely by a feedback loop between sellers.
The S&P 500 rose ~0.3% to 2,782.49 on June 14. US retail sales were stronger than expected in May, and US unemployment for the week that ended on June 2 fell to an almost 44.5-year low. These factors supported the S&P 500 Index. Seven out of the ten major sectors in the S&P 500 rose on June 14.
President Donald Trump’s inconsistent politics have made trading the markets a challenge. But there's a consistency that short-term traders can exploit.