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Stocks – Market pessimism grows after Intel's disappointment
Conservative tone of EUR-Draghi and flexible EZ data
VOTING AT CLOSURE – The Senate rejects both projects. Back to square one
OIL – Venezuelan leaders' stalemate may lead to sanctions on crude exports
GOLD – Strong dollar sinks precious metals as political risks persist
In what was a choppy session, stocks fought up, but after-hours earnings reports wiped out most of the gains. The main reports after the close were mixed. Intel and Western Digital reported lower revenues, while Starbucks was in the spotlight with strong numbers and advice. On a day when tech stocks got the better of Xilinx, Texas Instruments, and STMicro, Intel defeated the tech sector, but forecasts were very blurry for the first quarter and revenue expectations for the year were lower than expected. to those of the street. was expected. Chief Financial Officer Bob Swan said in an interview that he was more cautious because global economic growth was slowing down in the face of the potential impact of geopolitical dynamics. Looking at Asia, we could see the dismal results of Intel and Western Digital erasing most of the optimism seen in New York. The Nasdaq ended the session up 0.7% to 7,073, while the Dow was down 0.1%.
Earlier in New York, the financial markets did not appreciate the comment by US Secretary of Commerce Ross that the United States was miles away from a trade deal with China. Many failed to focus on the rest of his comments that there was a good chance that an agreement would be reached, but not this week. The next major battle with the trade war will be next week when Deputy Prime Minister Liu He arrives in the United States at the end of the month. Markets may not pay much attention to the political stance before that date.
EUR
The version of today 's cliff note is that the euro zone is constantly posting smooth data impressions and that the ECB will probably not increase rates this year. At the start of trade, the euro fell against the majority of its trading partners after rapid flash Eurozone PMI surveys, which had the slowest growth since 2013. Even the German manufacturing sector experienced a contraction and negative footprints since November 2014. The euro offset losses following a sharp increase in share purchases, but this trend ended when the ECB was centered. The ECB finally gave in and abandoned its position that the risks are "globally balanced" and switched to the fact that they are downward.
To close
The partial stop of the government is now in its 34th As expected, the vote in today's Senate defeated both bills. The interesting note is that the Democratic bill that would finance the government on February 8th was 52-44 votes that won more than 6 Republican votes. President Trump's proposal was rejected by 51 votes to 47. Today's political theater has made a lot of headlines, but we are far from the end of the closure. The pressure is intensifying each week for the president as 0.1% of GDP growth is deducted. The trade war is a separate issue, but the president needs a victory and he will soon have to decide whether he will advance in the resolution of the closure or trade war with China. If he leaves both in their current states, he will see all the stock market gains and confidence in the economy evaporate.
OIL
Oil prices climbed more than 1% as the United States provided sanctions against Venezuelan crude oil exports, as well as news of the sharp rise in the weekly oil EIA report. President Trump and many other leaders have recognized opposition leader Juan Guiado as interim president of Venezuela, while Venezuelan dictator Nicolas Maduro has received support from the military. The United States is planning to lift sanctions that include a ban on crude exports, with the possibility of increasing them to cover all badets, as sanctions imposed on Iran. Venezuelan oil production is steadily declining, with a drop of more than 600,000 barrels per day in 2018, with current production approaching 1.2 million bpd. If we see the sanctions imposed and Maduro gives no reason not to, several hundred thousand barrels could be taken off the market, which would boost oil prices.
The EIA's weekly oil report revealed that crude oil prices were in free fall following the surprise construction of 8 million barrels, while markets expected a draw of 500,000 barrels. The initial fall was quickly erased and oil remained near the middle of its two-week trading range.
Gold
The yellow metal has weakened today while a strong dollar kept the pressure on most metals. The recent upturn in gold from $ 1,200 to $ 1,300 was mainly due to concerns over the global slowdown, the uncertainty of the trade war and the strength of the dollar. We may need to see a major risk event, such as the deep closure in February or the lack of an extension of the trade truce between the US and China, to see the precious metal burst at above $ 1,300 an ounce. Silver and palladium prices are lower, while platinum is the one that stands closest to a percentage point and exceeds the $ 800 level.
This article is for general information only. This is not an investment advice or a solution for buying or selling securities. Opinions are the authors; not necessarily that of OANDA Corporation or its affiliates, subsidiaries, officers or directors. Leverage trading is high risk and not suitable for all. You could lose all your deposited funds.
With more than 20 years of trading experience, Ed Moya is a market badyst at OANDA. It produces an up-to-date fundamental badysis of geopolitical events and monetary policies in the United States, Europe, the Middle East and North Africa. During his career, he has worked with some of the world's leading currency brokers and research departments, including Global Forex Trading, FX Solutions and Trading Advantage. Most recently, he worked at TradeTheNews.com, where he provided market badysis on economic data and business information. Based in New York, Ed is a regular guest of several major financial television networks, including BNN, CNBC, Fox Business and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya
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