The Dow posted its first decline in 9 days amid fears that a rally in oil prices after an attack on oil production in Saudi Arabia could slow global economic growth. The attack shut down 5 per cent of global crude output. U.S. officials blamed Iran and President Donald Trump said Washington was “locked and loaded” to retaliate. Brent Crude and WTI Crude futures hit record volumes on the ICE and CME exchanges Monday as prices jumped over 12%. The previous volume record was set back on Nov 30, 2016 after OPEC agreed to an oil supply cut for the first time in 8 years.
Looking at the S&P 500 intraday performance. Shares in the Energy (+3.29%), Real Estate (+1.02%), Technology Hardware & Equipment (+0.2%) sectors traded higher while shares in the Automobiles & Components (-2.47%), Household & Personal Products (-1.87%) and Materials (-1.63%) sectors were under pressure. The S&P 500 (2,997.96) trades above its 20d moving average (2,938.88 – positive slope) and its 50d moving average (2,950.15 – flat slope).
On the economic data front, the Empire State Manufacturing Index fell to 2.0 in September (vs. 4.0 estimated) from 4.8 in August. On Tuesday, we can expect industrial production to increase 0.2% MoM for August.
European markets are expected to open on a flat note.
Foreign Exchange
The US dollar was bullish against most of its major pairs with the exception of CAD and JPY on Monday. On the economic data front, the US Empire State Manufacturing Index fell to 2.0 (4.0 estimate) in September compared to 4.8 in August. On Tuesday, we can expect MoM US Industrial Production to increase 0.2% for August compared to a decrease of 0.2% in July.
The Euro was bearish against most of its major pairs with the exception of GBP. In Europe, no major economic data released in Europe.
The Australian dollar was mixed against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (OCT 19) was up $6.8 to $61.67. The contract was above its 20D MA (@ $55.96) and above its 50D MA (@ $56.18).
Gold was up $9.4 to $1498.1. The precious metal was below its 20D MA (@ $1516) and above its 50D MA (@ $1476).
Copper Future (DEC 19) on Comex was down 5.9c to 264.05c/lb. The contract was above its 20D MA (@ 259.67c) and above its 50D MA (@ 263.62c). In Europe, the London Metal Exchange reported its copper inventories increased 5300 tons to 301925 tons.