The financial markets demonstrated resilience on Monday as the US Dollar held firm despite President Donald Trump's recent tariff threats. Meanwhile, the price of gold soared, and oil re-tested critical support levels. In a day marked by varied economic indicators and market movements, investors navigated the landscape with cautious optimism. The 12-month CDs are now yielding 4.4%, while the US government money market fund is yielding 4.5%, indicating a favorable environment for savers. Oil prices maintained their position above trendline support, closing at $71 per barrel after re-testing support at $70.45.
In the equity markets, Dow futures rose by 177 points, the S&P increased by 26 points, Nasdaq saw a rise of 150 points, and the Russell gained 8 points. These gains reflect a positive sentiment among investors despite the ongoing economic uncertainties. Additionally, gold prices climbed by $40, trading at $2926 per ounce, as investors sought safe-haven assets amidst global trade tensions.
Various market indices experienced gains, with the SH up by 1%, PSQ adding 1.4%, DOG increasing by 1%, and VIXY up by 3.4%. The SPXS, which is a triple-levered S&P short, gained 3%, suggesting an increase in short-selling activity. Despite these movements, Non-Farm Payrolls reported a weaker-than-expected addition of 143,000 jobs, which was offset by a drop in the unemployment rate to 4% and stronger-than-anticipated wage growth of 0.5% month-over-month and 4.1% year-over-year.
The VIX, a key measure of market volatility, rose by 6.7%, indicating heightened investor anxiety. This increase in volatility provided opportunities for contra traders to capitalize on market fluctuations. The EUR/USD remained flat above the 1.0300 level on Monday, as the stronger US Dollar countered the impact of tariff threats from President Trump.
Bond prices fell, resulting in higher yields due to the latest economic data. The TLT declined by 0.6%, while the TLH lost 0.5%, leading to a rise in two-year yields by 7 basis points to end the day at 4.28%. Meanwhile, the ten-year yield increased by 6 basis points to conclude at 4.49%.
Oil prices rose by $1 or 1.5%, reaching $72 per barrel as OPEC+ decided to raise prices for China and other Asian markets. This decision underscores the complex dynamics within the energy sector as geopolitical factors continue to influence pricing strategies. Notably, gold has surged by 50% in past instances following tariff announcements from President Trump and is now up 11% since January 1st.