US Stocks Hit on Friday – Dow Off 1% and Biden Out of Presidential Race
It was a volatile trading day on Friday to close the week with US stock indices taking a hit again and investors are preparing for more of the same on the open this morning in Asia as news hit the market that Joe Biden has pulled out of running for a second term as US president. A global cyber outage on Friday further dented investor confidence and US stocks experienced another down day, the Dow lost 0.93%, the S&P 0.71% and the Nasdaq finished 0.81% in the red. US treasury yields popped again, the 2-year rising 4.8 basis points to 4.509% and the 10-year jumped 5.1 basis points to 4.239% and the dollar pushed higher, gaining 0.24% on the index. Oil prices crashed as hopes of a ceasefire in Gaza increased, Brent dropping 2.9% to trade back to $82.63 a barrel and WTI lost 3.3% to fall off to $80.13 a barrel. Gold dropped again on Friday in line with the stronger dollar, losing just under 2% on the day to close at $2,399 but has jumped on the news out of the US this morning to trade back up to $2,410.
Gold in Focus in the Week Ahead
Gold experienced a volatile trading week last week as it first hit a fresh all-time high before then taking a substantial hit as it dropped over $80 an ounce, or 3.6% on the back of profit taking flows and a stronger US dollar. It has already started this week in similar fashion with haven flows coming through on the Asian open in light of the news on Joe Biden out of the US, with the precious metal jumping $10 this morning. Traders are expecting trading conditions to remain ‘tricky’ in the sessions ahead as the market digests the consequences for the change in Democratic nominee and what that is likely to mean for global markets. Gold is now sitting in the middle of recent ranges with Support now coming in around the $2,360 level and resistance up at last weeks record high at $2,483.60 – expect to see sharp moves in the recent ranges for the next couple of sessions until the market settles.
Investors Poised for a Busy Start to the Week
Investors had been looking at a relatively quiet trading day ahead to start the week today, but Joe Biden’s decision to pull out of the presidential race has thrown the cat amongst the pigeons to kick off the Asian trading session. Traders will still turn their attention to the world’s second biggest economy early in the day when the PBOC announces any updates on the 1-year and 5-year Loan Prime Rates in China, however no change is widely expected. There is little else out on the global event calendar today, however most market participants are expecting plenty of volatility on the back of fresh updates on US politics especially when the US markets open later in the day.
