S&P 500: No recovery in sight for Wall Street

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  • Equity markets fall again on Friday, extending weekly decline.
  • The pound enters the weakest currencies after UK data.
  • Gold hits a two-year low after losing $1,675.

Equity markets are falling on Friday, extending the weekly decline. The climate of caution continues to dominate, while Treasury bond yields remain at record highs, supporting the greenback. Gold touches lows in two years.

Looking again at the lows of the year

Markets in Europe are trading in the red, with the FTSE 100 down 0.05%, the DAX down 1.60% and the CAC 40 down 1.26%. Wall Street futures point to no recovery after Thursday’s decline. In the previous one, the S&P 500 lost 0.85%, the Nasdaq 1.05% and the Dow Jones 0.75%.

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Caution is giving way to pessimism among investors. Wall Street indices are taking a closer look at this year’s lows and are headed for their fourth weekly decline, considering the last five.

Among the most moving actions is FedEx which falls 20%, after a warning from the company for future income and the announcement to close offices. Adobe fell 16.7% on Thursday and in the premarket loses 2.10% after the presentation of results for the second quarter. Among the companies reporting results on Friday are Cheetah, Mogu and North Bud Farms.

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Mixed data from the US economy was released on Thursday. Retail sales rose 0.3% in August beating expectations, but details revealed that excluding autos fell 0.3% and July’s figures were revised down. The University of Michigan consumer confidence report for September will be released on Friday.

After a week of important data, such as inflation, the market expects the Federal Reserve raise the interest rate by 75 basis points next week, with some analysts forecasting a 100-point hike. This has been strengthening the dollar.

Bond yields continue to rise throughout the world. The US 10-year bond is at 3.45%, unchanged for the day, very close to this year’s peak of 3.50%, while the 2-year note reached a new maximum in more than 15 years at 3.92%.

The pound is among the weakest currencies on Friday, hit by a poor UK retail sales report. GBP/USD fell to its lowest since 1985 at 1.1349, before bouncing off 1.1400. EUR/GBP climbed above 0.8750 reaching prices not seen since February 2021. The Bank of England will also decide on monetary policy next week.

Eurozone inflation data confirmed the Consumer Price Index rising 9.1% in August from a year ago. The European Central Bank would raise the rate by 75 points at the October meeting.

The dollar is on track to close the week with gains on all fronts, except the Russian ruble. Among those that lost the most ground are the aussie (AUD), the kiwi (NZD), the rand (ZAR) and the Chilean peso (CLP). On Thursday Moody’s cut Chile’s rating from A2 to A1 due to the gradual weakening of its credit profile.

Alarms for the precious yellow metal

Gold is trading flat on Friday in the $1,665 area, having managed to recover after falling as low as $1,654, the lowest since April 2020. yellow metal price is breaking long-term support and looks under pressure. The silver It is trading in the $19.00 zone, negative for the day, but still with a slight weekly gain.

Rising Treasury yields coupled with a stronger dollar and risk aversion make for a negative combo for gold, which could continue until next week’s Fed meeting. Current prices, on the other hand, offer the possibility of a big reversal.

The prices of Petroleum they are rising recovering from Thursday’s drop. A barrel of WTI is just shy of $86.00. The cryptocurrencies they are also complicated by the current context. Bitcoin is trading flat below $20,000, while Ethereum is down 1.90% to $1,475.

Technical levels

XAU/USD

Panorama
Last Price Today 1664.8
Today’s Daily Change -0.14
Today’s Daily Change % -0.01
Today’s Daily Opening 1664.94
Trends
20 Daily SMA 1720.43
50 Daily SMA 1738.61
100 Daily SMA 1787.72
200 Daily SMA 1831.83
levels
Previous Daily High 1698.49
Previous Daily Minimum 1660.39
Previous Maximum Weekly 1729.57
Previous Weekly Minimum 1691.47
Monthly Prior Maximum 1807.93
Previous Monthly Minimum 1709.68
Daily Fibonacci 38.2% 1674.94
Daily Fibonacci 61.8% 1683.94
Daily Pivot Point S1 1650.72
Daily Pivot Point S2 1636.51
Daily Pivot Point S3 1612.62
Daily Pivot Point R1 1688.82
Daily Pivot Point R2 1712.71
Daily Pivot Point R3 1726.92

Source: Fx Street

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