US STOCKS-Wall Street roars back as trade war fears fade - Reuters News
27-Mar-2018 04:54:23 AM
• Wall Street has best day since August 2015
• Dow sees third-biggest point gain ever
• Trade war fears eased as China premier pledges market opening
• Microsoft leads indexes higher on Morgan Stanley upgrade
• Facebook closes up
• Dow up 2.84 pct, S&P 500 up 2.72 pct, Nasdaq up 3.26 pct
Updates to market close
By Stephen Culp
NEW YORK, March 26 (Reuters) - Wall Street scored its best day in 2-1/2 years and the Dow Jones Industrial Average saw its third-biggest point gain ever on Monday, as trade war fears eased on reports the United States and China are willing to renegotiate tariffs and trade imbalances.
The rally, fueled by technology stocks, came on the heels of the indexes' worst weekly performance since January 2016, the S&P 500's gain making up for less than half of the prior week's near 6 percent loss.
"We saw a really good rally because of potential talks with China," said Dennis Dick, Head of Markets Structure, Proprietary Trader at Bright Trading LLC in Las Vegas. "People are taking advantage of the huge dip last week."
"I don't think you're out of the woods yet. There's political uncertainty," Dick added.
Last week's drop was fueled in part by tensions surrounding U.S. President Donald Trump's move to levy tariffs on up to $60 billion of Chinese imports, in addition to those imposed on solar panels, steel and aluminum.
But tensions were calmed as Chinese Premier Li Keqiang repeated pledges to maintain trade negotiations and ease access to American businesses.
U.S. Treasury Secretary Steve Mnuchin said on Sunday he believed Washington could reach agreement with China on some issues but tariffs would not be put on hold "unless we have an acceptable agreement that the president signs off on."
"It's clearly the easing of trade tensions. The comments by Steve Mnuchin late yesterday gave room for negotiation with China," said Oliver Pursche, Chief Market Strategist at Bruderman Asset Management in New York.
But China did call for unity among World Trade Organization members to prevent the United States from "wrecking" the WTO, and urged opposition to Trump's tariffs targeting China's alleged intellectual property theft.
The Dow Jones Industrial Average rose 669.4 points, or 2.84 percent, to 24,202.6. The two larger point gains for the Dow were in October 2008. The S&P 500 gained 70.29 points, or 2.72 percent, to 2,658.55 and the Nasdaq Composite added 227.88 points, or 3.26 percent, to 7,220.54. 7,220.54
The three major U.S. indexes saw their best percentage gains since Aug. 26, 2015.
All 11 major sectors of the S&P 500 closed in positive territory, led by technology and finance indexes, up 4.0 percent and 3.2 percent, respectively.
The tech sector saw its biggest daily percentage gain since August 2015 and financials had their best day since November 2016.
Microsoft pulled the indexes higher, gaining 7.6 percent. Morgan Stanley upped its price target on the tech company's stock, saying its market value could hit $1 trillion on improved margins and growth in cloud computing.
Intel advanced 6.3 percent after brokerage Raymond James upgraded the technology to "market perform".
Facebook closed up 0.4 percent following several days of declines as the U.S. Federal Trade Commission announced it was investigating how the company allowed data of 50 million users to get into the hands of Cambridge Analytica.
The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, finished down 3.84 points at 21.03.
Advancing issues outnumbered declining ones on the NYSE by a 3.04-to-1 ratio; on Nasdaq, a 2.27-to-1 ratio favored advancers.
Volume on U.S. exchanges was 7.30 billion shares, below the 7.35 billion average for the last 20 trading days.
UPDATE 3-Oil firm on Middle East tension, though rising U.S. output looms - Reuters News
27-Mar-2018 03:05:42 PM
• Concern that U.S. may bring back sanctions against Iran
• Surging U.S. output looms over otherwise bullish market
• Shanghai crude continues high launch-day trading volumes
Recasts, updates prices
By Henning Gloystein
SINGAPORE, March 27 (Reuters) - Oil prices were firm on Tuesday, supported by concerns that tensions in the Middle East could lead to supply disruptions, although further rises expected in U.S. crude output loomed over markets.
U.S. West Texas Intermediate (WTI) crude futures were at $65.63 a barrel at 0700 GMT, up 8 cents, or 0.1 percent, from their previous settlement.
Brent crude futures were at $70.17 per barrel, up 5 cents, or 0.1 percent.
James Mick, Managing Director and Energy Portfolio Manager with asset management firm Tortoise, said "rising geopolitical tensions" were driving up oil prices. The biggest risk was that the United States could re-introduce sanctions on Iran.
"Crude also received support from OPEC members as Saudi Arabia and Russia both reiterated goals to extend the production cut agreement," Mick said.
Iraq, the second biggest producer within the Organization of the Petroleum Exporting Countries (OPEC) said on Monday that it also supports the producer cartel's agreement to cut oil output.
OPEC, together with a group of non-OPEC producers led by Russia, started withholding production in 2017 in order to prop up prices. The deal to cut is scheduled to last through 2018, and there has been recent support by OPEC's de-facto leader Saudi Arabia to extend the cuts into 2019.
Yet some traders cautioned that such a moved faced opposition.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore said there was "considerable resistance" as current or higher prices opened the possibility that even more U.S. shale producers could come back online.
U.S. crude production - thanks largely to shale, or tight oil drilling - has already jumped by almost a quarter since mid-2016, to 10.4 million barrels per day (bpd), taking it past top exporter Saudi Arabia and within reach of top producer Russia, which pumps around 11 million bpd.
"For oil, we expect the supply deficit of the past couple of quarters to give way to a surplus, driven largely by strong growth in U.S. tight oil supply," Britain's Barclays bank said on Tuesday.
In Asia, Shanghai crude oil futures saw their second day of trading, repeating Monday's high volumes.
Shanghai crude fell over 2 percent to 424 yuan ($67.85) per barrel for its afternoon close at 1500 local time (0700 GMT), down from a last settlement of 433.8 yuan ($69.41).
In dollar-terms, Chinese crude prices are trading between Brent and WTI.
Some traders that the influx of foreign oil money into Shanghai crude futures also contributed to the rise in the yuan to a 7-week high on Tuesday against the dollar.
($1 = 6.2495 Chinese yuan renminbi)
(Reporting by Henning Gloystein; editing by Richard Pullin)
TECHNICALS-Spot gold targets $1,451 in three months - Reuters News
27-Mar-2018 03:03:55 PM
7 (Reuters) - Spot gold may break a resistance at $1,380 per ounce and rise towards the next resistance at $1,451 in three months, as suggested by its wave pattern and a Fibonacci ratio analysis.
These resistances are identified respectively as 38.2 percent Fibonacci retracement on the downtrend from the Sept. 6, 2011 high of $1,920.30 to the Dec. 3, 2015 low of $1,045.85 and the 100 percent Fibonacci projection level of an upward wave C.
This wave is capable of travelling to $1,451. A trendline falling from $1,920.30 has been broken, and the pullback towards this line could have completed. The wave C seems to have resumed.
A projection analysis based on the rally from $1,122.35 to $1,295.42 reveals a resistance at $1,378, the 100 percent level, a break above which could lead to a gain to $1,418.
The pattern from the Dec. 12, 2017 low of $1,235.92 looks like a pennant, which suggests a target around $1,460. Support is at $1,337, a break below which could cause a loss limited to $1,311.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
(Reporting by Wang Tao; Editing by Sherry Jacob-Phillips)
PRECIOUS-Gold up on weaker dollar, Russian tensions - Reuters News
27-Mar-2018 01:06:15 PM
* Trump expels 60 Russian diplomats from United States
* SPDR gold holdings fall 0.38 percent on Monday
* Global trade war fears recede
(Adds quotes, updates prices)
By Eileen Soreng
March 27 (Reuters) - Gold prices rose for a third session on Tuesday as the dollar languished near a five-week low, as investors eyed rising tensions between Russia and the West even as a U.S.-China trade spat appeared to ease.
Spot gold edged up 0.1 percent to $1,354.51 per ounce at 0446 GMT, just off Monday's $1,355.97, the metal's highest level since Feb. 16.
U.S. gold futures for April delivery were flat at $1,354.60 per ounce.
"Gold prices continue to ratchet higher as the U.S. dollar weakens despite equity markets rebounding on easing concerns about the likelihood of a trade war between China and USA," Stephen Innes, APAC trading head at OANDA, said in a note.
"Realistically there are plentitudes of market turmoil in the making that continue to make gold the go-to place to hedge risk."
Against a basket of six other major currencies, the dollar index was flat at 89.043. The index fell to a five-week low of 88.979 on Monday.
Asian share markets rallied on Tuesday with a revival of investor appetite for riskier assets as reports of talks between the United States and China rekindled hopes a damaging trade war could be averted.
Gold, which is sought as a store of value in times of political and financial uncertainty, becomes less expensive when the greenback weakens.
On Monday, gold prices rose to a more than five-week high after the United States said it would expel 60 Russian diplomats, joining governments across Europe in punishing the Kremlin for a nerve agent attack on a former Russian spy in Britain.
Russia's Foreign Ministry called the expulsions a "provocative gesture".
Analysts also see the yellow metal being supported by last week's statement from the U.S. Federal Reserve which forecast at least two more hikes for 2018 instead of the three that many had expected.
"The Federal Reserve's March meeting emerged as a turning point for gold," analysts at UBS said in a note.
UBS on Monday raised its three-month forecast range to $1,300-$1,400 per ounce, and six- and 12-month forecasts to $1,375.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.38 percent to 847.30 tonnes on Monday from 850.54 tonnes on Friday.
In other precious metals, spot silver gained 0.6 percent to $16.75 per ounce. In the previous session prices hit $16.79, their highest since March 7.
Platinum was up 0.5 percent at $957 per ounce, while palladium rose 0.3 percent to $976.47 per ounce.
(Reporting by Eileen Soreng in Bengaluru; editing by Richard Pullin)
UPDATE 2-Hope for Argentine soy recovery dashed by scant weekend rains - Reuters News
27-Mar-2018 02:04:56 AM
Updates CBOT context, adds comment from Buenos Aires Grains Exchange
By Hugh Bronstein
BUENOS AIRES, March 26 (Reuters) - Rains expected to relieve Argentina's drought-hit soy and corn crops failed to materialize over the weekend, all but ending hope that yields might recover from four months of unrelenting sun with more heat and dryness expected over the days ahead.
U.S. soybean futures touched a one-week high on Monday after the disappointing weather increased concern that dryness in the world's No. 3 exporter would tighten global supplies. It was not the first time forecasters got it wrong since drought descended on the normally fertile Pampas grains belt in November.
"The weather differed from the forecasts again," said Esteban Copati, the Buenos Aires Grains Exchange's chief analyst. "The storm front dodged most of the agricultural region and even the areas that registered rainfall accumulated amounts well below what was predicted by the different forecast models."
Argentina is the world's biggest supplier of soymeal livestock feed, used to fatten pigs and cattle from Europe to Asia. The drought has put upward pressure on food prices, making it harder for poor countries to feed themselves.
"We had a few showers this weekend, but none of them were important," said Francisco Abello, a partner in the TraulenCO SA farm management company. "Even if it rains going forward, yields are not going to change much. Most of our soybeans are done."
As of Monday, Argentina looked increasingly hot and dry over the 10 days ahead, said Isaac Hankes, a weather research analyst at Thomson Reuters' Lanworth commodities and weather forecaster.
"The heat won't fully kick in until April 6 to the 10th, but it could be intense and dryness is likely throughout the 10-day forecast," Hankes added.
Soy crop estimates started the 2017-18 season in the 55 million tonne range, but have been slashed to around 40 million.
"YIELDS ARE FIXED"
Meteorologists had projected weekend rains of one to two centimeters (0.4-0.8 inch) in key farm areas of Cordoba, Santa Fe and Entre Rios provinces. But the showers never came.
"No matter how much it rains now, it won't help. Yields are fixed," Sofia Corina, a crop analyst at the Rosario grains exchange, said on Monday.
"The first soy to be harvested shows a lot of variability from two to five tonnes per hectare. Soy that was planted later in the season is more affected by the drought, and a lot of those fields will not be harvested at all," Corina said.
The first corn to be harvested has shown better-than-expected yields but later-planted corn was harder hit by the dryness. Farmers were expected not to even bother trying to harvest later-planted corn fields, Corina added.
The scant rains that fell on parts of the Pampas did little or nothing to relieve parched soy and corn fields. The Southern Hemisphere autumn harvesting season started last week.
"We had practically no rain on our land over the weekend," said Pedro Vigneau, who operates a 1,400-hectare (3,500-acre) farm in the central Buenos Aires district of Carlos Casares.
Early planted soy benefited from good ground moisture at the start of the season, Vigneau said. But as the harvest continues, he said yields will fall as later crops, planted under drier conditions, are brought in.
This month the Rosario exchange slashed its soy crop forecast to 40 million tonnes from a previous 46.5 million while cutting its corn estimate to 32 million tonnes from 35 million.
The Buenos Aires Grains Exchange meanwhile cut its soybean harvest estimate to 39.5 million tonnes from 42 million and reduced its corn crop forecast to 32 million tonnes from 34 million tonnes.
(Reporting by Hugh Bronstein
Editing by Jeffrey Benkoe and Marguerita Choy)
VEGOILS-Palm declines on stronger ringgit, production outlook - Reuters News
27-Mar-2018 01:12:14 PM
• Palm trading at one-week lows
• Malaysia March, April output seen rising - trader
By Emily Chow
KUALA LUMPUR, March 27 (Reuters) - Malaysian palm oil futures fell in early trade on Tuesday, trading near one-week lows, as a stronger ringgit and expectations of a rise in production in the coming months weighed on the edible oil's prices.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.6 percent to 2,419 ringgit ($624.74) a tonne at the midday break. It earlier fell to 2,413 ringgit, near a one-week low hit in the previous session.
Trading volumes stood at 14,310 lots of 25 tonnes each at the midday break.
"The market is down on a stronger ringgit," said a palm oil futures trader.
"Production in March and April is also expected to be high."
Gains in the ringgit, palm oil's currency of trade, typically weighs on the tropical oil as it makes it more expensive for holders of foreign currencies.
The ringgit strengthened 0.6 percent against the dollar around noon on Tuesday to 3.8720, its strongest level in two months.
Expectations of higher production for the full month of March and April are also pressuring palm's prices. Output of the edible oil usually gains seasonally around the second quarter of the year before peaking in the third quarter.
Malaysia's full-year output is seen rising to 20.5 million tonnes in 2018, its highest level on record, as crops shake off the lingering effects of a dry weather El Nino phenomenon and as young trees come to maturity and increase harvested areas.
In other related oils, the Chicago Board of Trade's May soybean oil contract rose 0.2 percent, while the May soybean oil on China's Dalian Commodity Exchange edged 0.1 percent higher.
The Dalian May palm oil contract was up 0.3 percent.
Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.
(Reporting by Emily Chow; Editing by Amrutha Gayathri)
GRAINS-Soybeans edge lower despite easing fears of possible trade war - Reuters News
27-Mar-2018 10:03:55 AM
• Soybeans fall further from one-week high hit on Monday
• Wheat falls, crop condition improves
• Corn edges higher
By Colin Packham
SYDNEY, March 27 (Reuters) - U.S. soybean futures edged lower on Tuesday, retreating further from a one-week high touched in the previous session, despite easing fears of a potential trade war between the world's two largest economies.
Wheat fell, lingering near more than a one-month low, while corn edged higher.
The most active soybean futures on the Chicago Board Of Trade were down 0.1 percent at $10.24-1/2 a bushel, having closed down 0.3 percent on Monday after prices had earlier hit a high of $10.40-1/4 a bushel - the highest since March 19.
Reports suggested that Chinese and U.S. officials were busy negotiating to avert a trade war.
While the market had been buoyed on Monday by China's decision to so far not include soybeans for possible tariff increases, analysts said uncertainty may also impact a widely watched U.S. Department of Agriculture (USDA) report this week, pressuring prices.
"The market is also focussed on the USDA's Prospective Plantings report. The report will have the first broad surveys of U.S. farmer's planting intentions for summer crops in season 2018," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.
"Farmer's latent worries about what a trade war might do to soybean prices may mean that price signal is not the only consideration. The market is approaching this plantings report with an unusual degree of uncertainty."
The most active corn futures were up 0.2 percent to $3.74-3/4 a bushel, having closed down 0.9 percent in the previous session.
Rains expected to relieve Argentina's drought-hit soy and corn crops failed to materialize over the weekend, all but ending hope that yields might recover from four months of unrelenting sun with more heat and dryness expected over the days ahead.
The most active wheat futures were down 0.2 percent to $4.52-3/4 a bushel , having closed down 1.3 percent on Monday when prices hit a low of $4.46-1/2 a bushel - the lowest since Feb. 22.
The U.S. Department of Agriculture (USDA) late on Monday rated 13 percent of top winter wheat producer Kansas in good-to-excellent condition, up from 11 percent a week earlier.
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