Tumbling oil prices weigh on sentimnets
US stock market managed to end its day on a flat note on Monday, 14 March 2016 despite early and sustained weakness from the oil pit. The Dow Jones Industrial Average finished ahead of the tech-heavy Nasdaq and the S&P 500. Equities stumbled at the start of today's session as a downturn in oil weighed on the broader market. Today's oil trade centered on news from Iranian officials that the country will not be joining production cap efforts until its exports grow to four million barrels per day.
The Dow industrials logged a new closing high for 2016 on Monday, while the S&P 500 edged lower as losses in the materials and energy sector capped gains for consumer-discretionary shares. The Dow Jones Industrial Average advanced 15.82 points, or 0.1%, to finish at 17,229.13, a new closing high for the year to date. The S&P 500 which briefly went positive in late trade, slipped 2.55 points to close at 2,019.64, after settling at a 2016 high of 2,022.19 on Friday. The Nasdaq Composite ticked up 1.81 points to finish at 4,750.28.
Four of the 10 main sectors ended higher. Boeing, Nike and McDonald's led the Dow gainers.
Additionally, relative weakness from the heavyweight financial sector was outweighed by strength in the influential technology and the consumer discretionary spaces.
Stocks stood their ground despite having become increasingly correlated to oil prices. Crude dropped on Monday, falling 3.4% to settle at $37.18 a barrel, giving up half of last week's gains, after OPEC left its estimate on global oil demand growth unchanged.
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A drop in oil prices once again hit energy companies, while investors remained skittish ahead of a series of central-bank meetings, including the Federal Reserve.
The Fed in December raised interest rates for the first time in almost a decade, and indicated that more rates hikes were ahead in 2016 as the it looked to end a run of easy-money policies. Global market turmoil at the beginning of the year, however, has pushed out forecasts for the next rate rise.
In Europe stocks rallied across the board, as investors digested an aggressive round of easing measures from the European Central Bank announced last week.
Crude oil prices fell at Nymex on Monday, 14 March 2016 giving up half of last week's gains, after OPEC left its estimate on global oil demand growth unchanged. A drop in oil prices once again hit energy companies, while investors remained skittish ahead of a series of central-bank meetings, including the Federal Reserve.
The Organization of the Petroleum Exporting Countries left its estimate on global oil demand growth for this year unchanged. World oil demand is expected to rise by 1.25 million barrels a day in 2016 to average 94.23 million barrels a day, according to OPEC's monthly oil report. OPEC also left its non-OPEC oil supply forecast for this year unchanged from its previous report, predicting a fall of 0.7 million barrels a day to an average of 56.39 million barrels a day. OPEC crude output, meanwhile, edged down by 175,000 barrels a day to average 32.28 million barrels a day in February, though output increased from Iran, Saudi Arabia and Kuwait.
Bullion prices ended the U.S. day session solidly lower on Monday, 14 March 2016 at Comex. Gold futures settled at their lowest level in more than a week on Monday as investors looked ahead to many important central-bank meetings that could set the near-term course for dollar-denominated assets.
April gold fell by $14.30, or 1.1%, to settle at $1,245.10 an ounce. That was the lowest settlement since March 2, and prices logged their fifth loss in six sessions. May silver gave up 8.4 cents, or 0.5%, to $15.521 an ounce.
The key outside markets were in a bearish posture for the precious metals markets today, as the U.S. dollar index was higher and crude oil prices were lower. Global stock markets were mostly higher on Monday, as investor risk appetite in the market place returned.
Today's participation fell beneath the recent average with fewer than 835 million shares changing hands at the NYSE floor.
There was no economic data of note released today. Tomorrow's economic data includes February Retail Sales (consensus -0.1%), February PPI (consensus -0.2%), and March Empire Manufacturing (consensus -9.5) all crossing the wires at 8:30 ET. Meanwhile, Business Inventories for January (consensus +0.0%) and the NAHB Housing Market Index for March (consensus 59.0) will be released at 10:00 ET. The day's data will be capped off with the Net Long-Term TIC Flows for January at 16:00 ET.
Also tomorrow, the Fed will begin its two-day March policy meeting.
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