For the first time S&P 500 index closed above 1900 points | IFCM
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For the first time S&P 500 index closed above 1900 points - 26.5.2014

On Friday sales of new single-family homes for April rose by 6.4% to 433 thousand that is more than expected. The recovery on the real estate market is one of the factors for the rate hike.

Despite the increase in sales, the average price for the U.S. single-family homes fell by 1.3% to 275.8 thousand. According to some of investors, it says that the U.S. real estate market is still weak. However, the economic data allowed the S&P500 index to close above 1900 points for the first time throughout the history. The largest growth was shown by the Hewlett-Packard shares, which rose by 6.1%. As a part of a plan to reduce the expenses, it announced a reduction of 16 thousand employees of the total staff (about 250 thousand people). Other American stocks and the U.S. Dollar Index (USDIDX) also rose on Friday. The majority of exchanges in the U.S. are closed due to the holiday - the Memorial Day. The U.S. futures indexes are "in black".

European stocks rose this morning on anticipation of the press conference of the ECB head, Mario Draghi at the European Central Bank annual forum. The EU has begun parliamentary elections. The preliminary data suggests a victory for supporters of the current economic policy that supports quotes. Asian indexes rose, thanks to the Chinese Prime Minister, Li Keqiang’s statements of taking measures to support the economic growth.

Copper, Daily

The Copper has risen on Friday. As we have mentioned in previous reviews, the premium between its value in London and Shanghai gets increased. The most liquid future contract, the August contract price on the Shanghai Futures Exchange has already reached $7878 per ton, or $3,574 per pound. While the stocks fell to their lowest level since 2008 and down to 283.6 thousand tons. In our opinion, this indicates a high demand for copper in Southeast Asia. We note that its stocks on the London Metal Exchange, available to foreign buyers are less than 100 tons. It is also the minimum since 2008. The spot Copper price in London is $93 higher than the three-month futures. Note that the stock markets in the UK and the U.S. do not work today due to the holidays.

According to the CFTC, the net-bullish position of eleven agricultural contracts fell last week by 9.4% for the third consecutive time.

Wheat, Daily

The Wheat decreased by 12% from its recent high of 14 months. The (net-long) decreased by 46%. Net long positions on the Cotton declined by 17% over the week. This is the maximum reduction in 6 months. Investors ignored Meteorological Agency forecast from the Commodity Weather Group on a possible drought in Texas later this summer. Meanwhile, the lack of rain can damage the crops.

Fcattle, Daily

The Fcattle prices started correcting downwards. Recall that last year the Cattle meat has risen in price only by 2%. Since the beginning of this year, the prices for the Fcattle contract reached 18% and the "basket" of all kinds of beef rose by 10%. But the USDA raised its forecast for growth in the beef prices for this year at the end of last week only to 5.5-6.5% to 3-4%. Perhaps market participants fear USDA steps to prevent an excessive appreciation of meat. We do not exclude that the USDA forecast could also negatively affect the Sugar quotations. Their growth reached 10% since the beginning of the year. The USDA believes that it should be from 1% to 2%. In order to reduce the Sugar price, there are negotiations on reducing the tariffs on its imports from Mexico conducted.

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