US Stocks Push Higher After Fed Minutes – Nasdaq up 1.1%
US tech stocks pushed higher in trading again yesterday as investors shrugged off concerns over the ongoing government shutdown and less dovish-than-expected FOMC Meeting Minutes. The Dow closed flat at 46,601; however, the more heavily tech-weighted S&P and Nasdaq both hit new record levels, the S&P up 0.58% to 6,753 and the Nasdaq up 1.12% to 23,043. Treasury yields finished close to flat after the Fed minutes and a tepid 10-year auction, the 2-year closing up 1.5 basis points at 3.578% and the 10-year finishing down 0.4 of a basis point at 4.119%. The dollar gained ground again against the majors, most notably against the Japanese yen, the DXY up 0.28% on the day to 98.85. Oil prices also pushed back higher, Brent up 1.04% to $66.12 and WTI up 1.05% to $62.38 a barrel. Gold again powered to fresh record levels, smashing through the $4,000 mark to close up 1.50% at $4,043.01 an ounce.
Gold Shines Again – Smashes Through $4,000
Gold pushed higher yet again in trading yesterday, with the $4,000 barrier providing little resistance in the relentless push higher of the world’s favourite precious metal. It has now gained around 16% since it broke through the previous record high at $3,500 in early September and shows very little sign of losing momentum. Global market uncertainty has been attributed to aiding this meteoric rise in the last few weeks; however, that normally comes hand in hand with a stock market drop, and that is not the case with major US indices—the S&P and the Nasdaq both reporting record closes overnight. Traders will continue to look for levels to buy in the current environment, with breaks of daily highs seeming to work on an almost daily basis at the moment and any pullbacks being well supported. Trendline support now comes in around the $3,910 level, with stronger support below at $3,845. While it is a brave player that looks to short gold, there are some thinking that the move is overdone and we could see a correction in the coming days, especially with the dollar gaining ground against other products.
Quiet Calendar Day but More Moves Expected
It’s another quiet macroeconomic calendar day ahead for investors today; however, the market is expecting to see plenty of volatility across markets, with any geopolitical updates likely to hold sway. The Asian session does see the return of Chinese markets to the game after a long week off, and traders are expecting to see some strong moves as they adjust to what has been a lively week in global financial products. The London session sees the release of the ECB’s Monetary Policy Meeting Accounts; however, most traders are expecting geopolitical updates to have a greater impact on the euro. Once again, it is unlikely that we will see the weekly update on US Unemployment Claims in the New York session with the government shutdown ongoing; however, we do hear from Fed Chair Jerome Powell, which is almost guaranteed to move markets—especially coming on the back of yesterday’s Meeting Minutes. Fed members Michelle Bowman and Michael Barr are also scheduled to speak, but expect the Chairman’s comments to dominate.
