U.S. Market | Wall Street Closing Report: Dow notches 8-day winning streak, nears record on growing optimism around US-China trade

Fred Imbert

3-4 minutes - CNBC

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The Dow Jones Industrial Average rose on Friday, posting its first eight-day winning streak in more than a year, amid improving sentiment around U.S.-China trade relations.
The 30-stock index closed 37.07 points higher, or 0.1% at 27,219.52. The S&P 500 and Nasdaq Composite struggled, however. The S&P 500 slipped 0.1% to 3,007.39. The Nasdaq ended the day down 0.2% at 8,176.71.
The Dow finished Friday’s session 0.7% below an intraday record high of 27,398.68. The S&P 500 was also within striking distance of its all-time high of 3,027.98.
Trade bellwethers Caterpillar and Boeing rose 1.5% and 1.1%, respectively. Those gains were slightly offset by a 1.9% drop in Apple. The tech giant’s stock fell after an analyst at Goldman Sachs cut his price target on Apple to $165 per share from $187.

A trader wears a ‘Dow 25,000’ hat while working works on the floor of the New York Stock Exchange (NYSE) in New York, Jan. 4, 2018.
Bloomberg | Bloomberg | Getty Images

“If anybody had any doubt about what was moving markets, it’s the trade war,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management.
Schutte pointed out that so-called defensive sectors, which have been in vogue recently amid trade and recession fears, have unwound this week. Two of those sectors, real estate and consumer staples, were down 3.5% and 0.9%, respectively.
Sentiment around the trade war improved after the New York Times reported Friday that China will exempt some U.S. agricultural products, including soybeans and pork, from additional tariffs.
On Thursday, the U.S. welcomed China’s renewed purchases of American farm goods, with President Donald Trump saying it was expected Beijing would purchase “large amounts” of agricultural products. Trump also said he would consider an interim trade deal with China.
“This is quickly becoming the base-case assumption and thus it’s unclear whether stocks will react favorably to any future headlines simply confirming the likelihood of such a scenario,” said Adam Crisafulli, executive director at J.P. Morgan, in a note.
Trump’s comments came after his decision to delay increasing tariffs on $250 billion worth of Chinese goods from Oct. 1 to Oct. 15 as a “gesture of good will” to China. The U.S. and China have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
The upbeat sentiment around the trade war pushed the major indexes to their third straight weekly gain. The Dow rose 1.6% week to date while the S&P 500 and Nasdaq both rose about 0.9%.
It also led to a massive sell-off in U.S. sovereign bonds. The benchmark 10-year Treasury yield shot up more than 30 basis points this week, going to around 1.89% from 1.57% earlier in the week.
Bank stocks got a boost from the higher rates. Bank of America climbed nearly 9% week to date while Citigroup and J.P. Morgan Chase both gained more than 6%. The three banks also rose more than 1.5.% each on Friday.
On the data front, consumer sentiment for September topped expectations as consumers felt better about the economy. However, worries over the trade war increased.
—CNBC’s Sam Meredith and Michael Bloom contributed to this report.

Energy | Oil | Oil Price Report: Oil falls as demand concern contends with US-China trade hopes

2-3 minutes - Sorce: CNBC

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Oil prices slipped on Friday and were on track for weekly losses as concerns about a slowed global economic growth outweighed hints of progress in the U.S.-China trade dispute.
Brent crude futures traded 0.2% lower at $60.25 per barrel. U.S. West Texas Intermediate (WTI) crude futures settled 0.4% lower at $54.85.
Brent fell 1.8% for the week, its first decrease in five weeks. WTI had a 2.7% loss for the week, its first decrease in three weeks.
The world’s two largest economies are preparing for new talks and have been making conciliatory gestures ahead of the discussions.
China will exempt some agricultural products from additional tariffs on U.S. goods, China’s official Xinhua News Agency said.
Oil prices, however, remained under pressure by concern about a weaker demand outlook that could lead to potential oversupply.
“Oil appears to be suggesting that global economic growth has already been impacted by the tariffs while other markets such as the equities appear more focused on future progress,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Both the Organization of the Petroleum Exporting Countries and the International Energy Agency (IEA) this week said oil markets could end up in surplus next year, despite a pact by OPEC and its allies to limit supplies. That is largely being offset by growth in U.S. production.
Brent prices have risen 12% so far in 2019, helped by the deal between OPEC and allies, known as OPEC+, to cut output by 1.2 million barrels per day.
An OPEC+ monitoring committee met this week and secured pledges from OPEC members Nigeria and Iraq to deliver their share of the cut, something they have failed to do so far, but so far the group has not decided to deepen the curbs.
“In order to avoid a price slide and a massive inventory build, OPEC+ would need to implement further voluntary production cuts,” said Eugen Weinberg, analyst at Commerzbank.
“The challenge facing OPEC+ is thus likely to become even bigger next year.”
Some OPEC delegates say the idea of a larger cut for next year is gaining support, though Saudi Arabia’s new energy minister said talks on that issue would be left until the next OPEC+ meeting in December.

Futures & Commodities | Gold | Gold Price Report on Friday 13, 2019: Gold faces third weekly fall on upbeat shares, yields

3 minutes - Source: CNBC

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Source: World Gold Council

Gold prices eased on Friday, heading for a third straight weekly fall, as positive U.S. retail sales data and hopes for a thaw in Sino-U.S. trade tensions lifted equities and yields to multi-week highs.
Spot gold fell 0.63% to $1,489.26 per ounce, and has fallen about 0.7% for the week so far. U.S. gold futures edged down 0.7% to $1,496.7 per ounce.
“With better-than-expected data along with a rise in global equity markets, we are seeing gold fall off its earlier highs. Optimism about trade has led to a bounce in global equities and lesser need for safe-haven commodities such as gold,” said David Meger, director of metals trading at High Ridge Futures.
“Underlying theme of global central bank easing continues to be a supportive factor for gold on the one side and you have some pressure coming from global equities and better prospects of trade.”
U.S. Treasury yields rose across the board after data showed U.S. retail sales rose in August, suggesting the risk of recession in the world’s largest economy continues to diminish.
Global shares also climbed to a six-week high on further signs of progress in U.S.-China trade talks and added stimulus from the European Central Bank.
Washington and Beijing toned down signs of any previous escalation in their dispute with reconciliatory gestures from both nations, further boosting the risk appetite in markets.
Investors are now awaiting the U.S. central bank meeting next week, when it is expected to cut its benchmark interest rate by at least 25 basis points for the second consecutive time.
Analysts said that dovish monetary policy adopted by global central banks along with concerns of a glut in negative-yielding government debt globally will continue to support bullion in the longer term.
“Gold is going to remain around these levels or drift higher. Gold is actually paying more than any other 30-year bond, and every small move actually pays more than bonds,” said an analyst based in New York.
Elsewhere, palladium fell 1% to $1,602.19 per ounce, after hitting an all-time high of $1,621.55 on Thursday. The rally in prices of the auto-catalyst metal was due to alleviated supply concerns arising from possible labor issues in South African mines.
Palladium was up over 4% so far this week and on track for a sixth straight weekly gain.
Silver shed 1.5% to $17.83 per ounce, while platinum edged 0.2% higher to $953.14 and was on course to gain for a fourth week.

Energy | Oil | Oil Price report ( 2:00p.m. Approx.): Oil prices fall 1.2% on U.S.-China trade doubts, OPEC+ talks

3-4 minutes - Source: CNBC

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A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.
Getty Images

Oil prices fell about 1.5% on Thursday after a media report cast doubt on the possibility of an interim U.S.-China trade deal and as a meeting of the OPEC+ alliance yielded no decision on deepening crude supply cuts.
Oil was pressured further after the European Central Bank cut its deposit rate to a record low -0.5% from -0.4% and said it will restart bond purchases of 20 billion euros a month from November to prop up euro zone growth.
Brent crude futures were down 74 cents, or 1.2%, at $60.07 a barrel by 1:54 p.m. EDT (1754 GMT). U.S. West Texas Intermediate crude futures fell 92 cents, or 1.7%, to $54.83 a barrel. Both were heading for a third session of losses.
Both Brent and WTI fell below the $60 and $55 a barrel marks during the session, triggering auto-selling.
Oil futures extended their losses after a senior White House official denied a Bloomberg News report that the United States was considering a temporary trade agreement with China, according to CNBC.
The prospect that the world’s two largest economies made some concessions in a protracted trade war, according to a previous report, supported prices earlier in the session.
“All of a sudden we had a ray of hope,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
“Now that they’re downplaying that and, immediately, the stocks went back down, gold came back up and oil went back down.”
Also hitting oil prices were comments by Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, who said deeper cuts would not be decided upon before a meeting of the Organization of the Petroleum Exporting Countries planned for December.
The meeting yielded a promise to keep countries within the production quotas they committed to in a global supply deal, which would limit oil coming to the market as Nigeria, Iraq and Russia have, at times, produced more than their allocations.
A statement from OPEC and its allies, a grouping known as OPEC+, said oil stocks in industrial countries remained above the five-year average. Oman’s energy minister said “the outlook is not very good for 2020.”
Prince Abdulaziz said Saudi Arabia would keep cutting by more than it pledged in the pact that has throttled supply from OPEC+ by 1.2 million barrels per day.
Also feeding the bearish sentiment, the International Energy Agency said surging U.S. output would make balancing the market “daunting” in 2020.
“Booming shale production has allowed the U.S. to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter ... in June, after crude exports surged above 3 million bpd,” said the agency that advises industrial economies on energy policy in its monthly report.
The Paris-based IEA kept its oil demand growth forecasts for this and next year at 1.1 million bpd and 1.3 million bpd, respectively.

Futures & Commodities | Gold | Gold Price Report ( 2.00p.m. Approx.): Palladium sets all-time high on supply angst; gold pares gains

3 minutes - Source: CNBC

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Palladium prices hit an all-time high on Thursday on concerns over tight supplies of the autocatalyst metal due to possible labour issues in South African mines, while gold shed earlier gains on fresh hints of progress in the U.S.-China trade dispute.
Palladium climbed 3% to $1,617 after hitting a record high of $1,621.55 earlier in the session.
“On a fundamental basis for platinum and palladium in particular there are the ongoing wage negotiations taking place in South Africa,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.
“It is not our base case that we expect there to be significant supply disruption, but given that the palladium market is already undersupplied, any incremental losses in production are likely to only tighten the market further.”
South Africa’s main platinum mining union said on Tuesday it had formally declared that wage talks with major mining companies were deadlocked, raising the possibility of strike action if the issue cannot be resolved.
Palladium, used mainly in emissions-capping catalytic converters for automobiles, has risen about 28% so far this year.
Meanwhile, gold pared early gains after a Bloomberg report said Trump administration officials have considered offering a limited trade deal to China that would delay or possibly roll back some tariffs, in exchange for assurances on intellectual property and agricultural purchases.
Gold was up 0.1% to $1,498.66 per ounce. U.S. gold futures settled up 0.3% at $1,507.40.
“Gold just hasn’t been able to recover from that even though someone in the Trump administration came out with a denial,” said Bob Haberkorn, senior market strategist at RJO Futures.
A gauge of global stock markets touched its highest since late July on Thursday on hopes of progress in the U.S.-China trade dispute, sending bond yields off lows hit earlier in the wake of the European Central Bank’s new stimulus measures.
Gold had gained as much as 1.7% earlier in the session after the European Central Bank cut deposit interest rates and relaunched quantitative easing, bolstering expectations for a dovish stance from the U.S. central bank at its meeting next week.
Silver fell 0.3% to $18.02 per ounce, and platinum gained 0.6% to $950.

EU - FX | Currencies: Euro slides after ECB cuts rates, approves new bond purchases

3-4 minutes - Source: CNBC

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Matt Cardy | Getty Images

The euro skidded below $1.10 on Thursday after the European Central Bank cut interest rates and unexpectedly relaunched a quantitative easing programme as well to boost the region’s economy.
Investors had expected a rate cut at Thursday’s meeting but there was some uncertainty as to whether policymakers would restart a QE programme after some ECB members expressed doubt in recent weeks about the need to relaunch asset purchases.
The euro, after initially rising, dropped sharply to as low as $1.0955, the day’s low and down 0.5% on the session, as investors digested news of the rate cut and relaunch of QE. The euro hit a 28-month low earlier this month of $1.0926.
The single currency also weakened against the Swiss franc and Japanese yen.
ECB President Mario Draghi gives his press conference at 1230 GMT, where investors will be looking for signals of further rate cuts and whether policymakers plan to tweak their inflation targeting framework.
Thursday’s meeting was the first in a series of major central bank events, with Federal Reserve and Bank of Japan meetings next week.
Stephen Gallo, European Head of FX Strategy at BMO Capital Markets, said that if the ECB prepared the market for significant rate cuts ahead, “that would be quite dovish, quite bearish” for the euro.
Euro/dollar overnight implied volatility had soared to its highest since mid-2018 in the run-up to Thursday’s policy statement.
The dollar rose against a basket of currencies and was last up 0.2% at 98.568.

RISK RALLY

Elsewhere in forex markets, a rebound in risk sentiment supported the Chinese yuan, Australian dollar, export-driven currencies across Asia and emerging market currencies.
After a difficult August in which concerns about a global recession sparked a scramble into safer assets, markets have rallied this month, encouraged by easing trade tensions and by receding fears of a no-deal Brexit for now.
China on Wednesday exempted a basket of U.S. goods from its tariffs, while U.S. President Donald Trump said in a tweet he would delay a scheduled tariff hike by two weeks in October.
The Aussie hit a six-week high of $0.6887 and the offshore Chinese yuan rose as much as 0.5% to a three-week high of 7.0737 per dollar.
The Japanese yen, the go-to safe haven currency for fearful investors, fell to a six-week low against the dollar. The yen breached the 108 mark in Asian trade and was last at 107.80 yen per dollar.
It had hit a seven-month high of 104.46 last month.
Sterling was little changed . The pound rocketed to a six-week high against the dollar on Monday as investors welcomed the British parliament’s move to block a no-deal Brexit on Oct. 31.
Despite the more positive mood in risk assets this week, analysts expressed caution about its sustainability.
“The bigger picture is one of a very tense geopolitical environment that is unlikely to be rectified quickly,” BMO’s Gallo said.