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US Close – Mixed start for stocks, Empire disappoints, Oil rallies, Gold rebounds, Bitcoin struggles

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US stocks traded mix as investors assess soft Chinese and US data and the potential for stagflation risks and a much sooner recession.  The S&P 500 is trying to hold onto the 4,000 level as a six-week decline seems a bit overdone. There is a lot of value on the table right now and some investors are starting to look at a steady stream of weaker-than-expected economic data as a likely catalyst that will force central bankers to ease up on the hawkish talk. 

Empire

The Empire State index posted a surprisingly large drop in May, which wipes away some of the strong gains seen in prior months. This data set has been pretty unpredictable and given the recent supply chain issues, many traders took the negative reading with a grain of salt.

NATO

NATO could grow with the addition of Finland and Sweden, but that would only happen if unanimous support comes from all 30 NATO members, including Turkey.  Turkey has voiced concerns with Sweden’s support of PKK-affiliated militia in Syria, but NATO Secretary General Stoltenberg is confident that Turkey’s intention is not to block membership.     

McDonalds

The exit of Russia will cost the fast food giant 9% of its revenue and includes a write-off of $1.2 billion to $1.4 billion for the transition. McDonald’s filing stated, “The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”

Much of the Russian exposure has been priced in for McDonalds and it seems Wall Street is ready to move on.    

Oil

Crude prices are rallying as China’s COVID outlook improves as Shanghai saw no new cases outside quarantine.  Weaker economic data from China and the US weighed on oil prices but a tightening market, especially in products paved the way for crude prices to pop higher. 

Gold

Gold prices are stabilizing as Treasury yields and the US dollar edged lower, while cryptos are fighting for survival.  Stocks have been swinging between gains and losses since investors don’t have a strong conviction with where the economy is headed over the short-term.  It seems the Fed is on a set course to deliver a couple half-point rate hikes over the next two meetings and if that is not upgraded, gold could show further signs of stabilizing here. 

If the financial markets have seen a short-term peak with rates, that could be great news for gold investors.  Gold should find tentative resistance at the $1835 level, with $1750 being key support if the $1800 level breaks. 

Bitcoin

Small amounts of dip buying tentatively gave Bitcoin a boost, but too much of the retail and institutional world still have massive wounds from the recent collapse.  Confidence is weak in the cryptoverse and until stablecoin concerns ease, Bitcoin is in the fight for its life.  

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.

Ed Moya

Ed Moya



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