The S&P 500 ended with a gain after briefly hitting an intra-day record in a choppy session on Wednesday, as investors balanced worries about inflation with reassuring comments from Fed Chair Jerome Powell. Of the 11 S&P 500 sector indexes, utilities, and consumer staples were among the strongest, while energy sank over 3%. U.S monetary policy will offer “powerful support” to the economy “until the recovery is complete,” Powell told a congressional hearing in remarks that portrayed a recent jump in inflation as temporary and focused on the need for continued job growth. Powell’s comments followed data this week showing U.S producer prices increased more than expected in June and U.S consumer prices rose by the most in 13 years. Investors in recent weeks have focused on inflation, with many fearing a possible hawkish shift by the Federal Reserve, as well as a spike in coronavirus infections that could knock U.S equities off record highs.
Dow Jones Industrial Average
The Dow Jones Industrial Average rose 0.13%. The best performers of the session on the Dow Jones Industrial Average were Apple Inc., which rose 2.47% or 3.60 points to trade at 149.24 at the close. Meanwhile, Coca-Cola Co added 2.31% or 1.27 points to end at 56.29 and Honeywell International Inc. was up 1.65% or 3.69 points to 227.77 in late trade. The worst performers of the session were Chevron Corp, which fell 1.89% or 1.96 points to trade at 101.97 at the close. Boeing Co declined 1.69% or 3.86 points to end at 224.34 and Caterpillar Inc. was down 1.65% or 3.54 points to 211.65.
NASDAQ 100
The NASDAQ index declined 0.22%. The top performers on the NASDAQ Composite were SGOCO Group Ltd which rose 36.33% to 13.074, Datasea Inc. which was up 34.81% to settle at 3.950 and Bon Natural Life Lt which gained 33.26% to close at 11.86. The worst performers were Allena Pharmaceuticals Inc. which was down 35.47% to 0.8969 in late trade, Allied Healthcare Products Inc. which lost 31.13% to settle at 6.240 and Antelope Enterprise Holdings Ltd which was down 25.75% to 2.970 at the close.
Oil
Oil prices fell nearly 1% today, extending losses as investors braced for more supplies following a compromise between top OPEC producers and as U.S fuel stocks rose, raising concerns about demand in the world's largest consumer. U.S West Texas Intermediate (WTI) crude for August was at $72.51 a barrel, down 62 cents, or 0.9%. The market is not taking any chances. Prices are much overbought anyway so traders might want to take some money off the table before the deal is concrete. Talks among the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, had broken down earlier this month after the UAE objected to extending the supply cut deal beyond April 2022. The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year. It seems OPEC+ will shortly have a plan to raise output and that is welcomed the news as surging demand had the oil market getting too tight.
Precious and Base Metals
Gold prices hovered near a four-week peak yesterday after U.S Federal Reserve Chair Jeremy Powell soothed investor fears by reassuring that he was in no rush to tighten policy, lifting the metal’s appeal as an inflation hedge. Spot gold was flat at $1,826.27 per ounce, having hit a peak since June 16 at $1,829.55 yesterday. U.S gold futures edged up 0.1% to $1,827.00. Powell stuck to the view on Wednesday that the current price increases are transitory and the Fed expects to continue its bond-buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023. Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement. Growing inflationary pressures are going to keep investors on edge, but they are becoming more comfortable about the Fed’s stance, allowing them to continue to build positions in the market. The conditions are relatively supportive of further gains in gold. It’s not going to be a sprint but a very gentle, gradual trend higher for the year at the moment. Weighing on bullion’s appeal, the dollar found some footing during the Asian trade on the back of coronavirus jitters, after Powell’s comments caused the greenback to retreat from recent peaks. On the technical front, spot gold may test a resistance at $1,833 per ounce, a break above could lead to a gain at $1,853. Among other precious metals, silver edged up 0.1% to $26.26 per ounce. Copper prices lost ground in low volumes yesterday on tepid demand in top metals consumer China and uncertainty about rising inflation. A dip in physical demand in top metals consumer China was also weighing on the market after China’s copper imports fell for a third straight month in June. The high copper prices are having an impact on demand, which has reduced some of the downstream orders and we are seeing that in the lower Chinese import numbers in June.
Traditional Agricultures
Corn and soybean futures hit their highest in nearly two weeks yesterday as forecasts called for dry weather in the Midwest crop belt next week and continued dryness in the northern Plains, threatening crop prospects.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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