US Open – Caterpillar, Boeing, China, Oil, Gold

US stocks extended their premarket lows after Caterpillar delivered sour results that saw a big miss with earnings with their outlook getting slashed due to global economic uncertainty.  This was the first drop in quarterly earnings for Caterpillar in almost three years.  Mining equipment sales were down 12% and sales in the Asia Pacific regions saw significant declines due to softening demand from China.  The trade war has weighed on Caterpillar and the cautious commentary mirrors Texas Instruments warning from yesterday.  Boeing shares bounced around after announcing mixed results that highlighted a cut to a cut to their monthly 787 production rate.  No new charges for customer compensation were announced with today’s results.  Earnings results have been mixed this week as we did see some standout performances from Thermo Fisher, Anthem, and Boston Scientific. 

Safe-havens are in control this morning as money comes back to the bond market and the dollar. 

China

China’s State Council also announced constructive updates on the trade front.  They announced they will be supportive of increasing the imports of consumer goods and equipment, while reiterating their promise to increase agricultural purchases, and forex management. For the most part, they offered no new insights for the final details of the phase 1 trade deal.  US stocks were modestly off the lows of the trade headlines.

Oil

Oil prices sold off early in London after Russian energy minister Novak dented optimism OPEC + was going to deliver deeper cuts at the December meetings.  Novak noted that there is no official proposal from OPEC + members to change current production cut agreement. 

Oil is softer on falling expectations OPEC + will deliver deeper production cuts and as US inventories continue to rise.  The API report showed a 4.5 million barrel increase last week.  The EIA report is also expected to see a 2.7 million barrel increase later this morning. 

Gold

Despite today’s safe-haven theme, gold continues to struggle below the $1,500 an ounce level.  It seems gold needs to see awful earnings results in order to reassert its longer-term bullish trend.  Gold continues look to be stuck in a $1,480 to $1,500 range. 

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

Ed Moya

Senior Market Analyst - The Americas at OANDA
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