With a focus on a weak national employment situation, tightening credit and economic recovery concerns, traders gapped the US equity market lower at the open on Friday, spent the day recovering and then sold off to a loss on the day, a fitting close to a week that took the market back to August prices.
Despite a loss in the US Dollar during the day ($USD 77.05 -0.19 -0.25%), share prices were soft at the close. The S&P 500 (1,025.21 -4.64 -0.45%), DJIA (9,487.67 -21.61 -0.23%), and NASDAQ Composite (2,048.11 -9.37 -0.46%) all closed lower. The Industrial and Consumer Discretionary sectors were weakest (XLI -1.3% XLY -1.3%), while Consumer Staples (XLP +0.3%) was the only sector to show strength, and only to a modest extent.
Traders are now looking back to the post-FOMC report trade level of Wednesday Sept 23 (2:39pm ET) benchmarks [S&P 500 (1,079.12), DJIA (9,906.73), and NASDAQ Composite (2,166.02)] as the cycle high, wondering if that will be a short-term (1-3 months) cycle or a larger intermediate-term (3-9 months) one.
The Toronto Exchange Composite (10,958.33 -113.43 -1.02%) and Venture market (1,244.12 -4.59 -0.37%) followed along.
The industry groups in NY on Friday traded unremarkably. Airlines ($XAL +2.1%), which recovered a small bit from a big hit earlier in the week, was the upside leader, while Oil Services ($OSX -1.6%) dipped a bit as Oil prices looked to be falling back into the 60’s.
Prices of Crude Oil ($WTIC 69.95 -0.87 -1.23%) and Gold ($GOLD 1,003.00 +3.10 +0.31%) were quiet, but clearly much stronger as the day progressed under a weakening $USD.
As the US Dollar closed down, the gains on the day were made in the Euro ($XEU 145.77 +0.40 +0.28%) and Canadian Loonie ($CDW 92.58 +0.32 +0.35%), with the latter having a good week. The Pound (159.39 -0.07 -0.04%) and the Yen ($XJY 111.38 -0.24 -0.22%) also dropped against the weaker USD.
US Treasury Bonds ($USB 122.28 -0.38 -0.31%) gave up ground on the day but had a good week. Treasury yields on the 30-year (4.011 +0.52 +1.31%), 10-year (3.221 +0.27 +0.85%) and 5-year paper (2.205 +0.11 +0.50%) lifted as T-bill yields sank (0.090 -0.05 -5.26%).
Earlier Friday in overseas equity markets, there were big losses in all but India (17,134.6 +0.05%). In Asia-Pacific markets, Australia (4,608.6 -1.99%), Hong Kong (20,384.8 -2.72%), and the Nikkei 225 of Japan (9,733.4 -2.46%) were down -2% or more, while Shanghai was closed for Communist Party anniversary celebrations. At the close in Europe, France (3,649.9 -1.90%), Germany (5,467.9 -1.56%) and the FTSE 100 of London (4,988.7 -1.17%) also took big losses.
In futures trading at the close Friday, the Euro (1.4587 +0.0053 +0.36%) closed higher, whereas the DJIA December futures (9435 -36 -0.38%), and the Crude Oil futures (69.95 -0.87 -1.24%) were down on the day, but stronger through the session as the $USD weakened.
At the close, Spot (cash) trades were as follows: for gold (1002.10 +1.25 +0.12%), silver (16.1187 -0.1913 -1.19%), palladium (293.0 +5.0 +1.74%), and platinum (1277 -2 -0.16%). All these prices strengthened during the day as the $USD weakened from mid-morning on to the close.