Wall Street sign (photo: Vlad Lazarenko)

Stocks and dollar waver on SLOOS

2 mins read

By Edward Moya  

US stocks wavered as a key Federal Reserve survey showed loan growth is weakening and that the economy should steadily weaken. ​

The Senior Loan Officer Opinion Survey (SLOOS) indicates how top lending officers feel about the credit outlook. ​

Regarding loans to businesses, survey respondents reported, on balance, tighter standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes over the second quarter, the Fed board said.

Banks reported tighter standards and weaker demand for all commercial real estate (CRE) loan categories, the survey added.

The US dollar isn’t making any major moves as Wall Street grows more confident that a soft landing is very much obtainable.

Many traders won’t do much positioning until Friday’s NFP report, which should show the labour market remains tight. ​ The key for the payroll report might be what is happening with wages, as it seems fears of an acceleration of inflation have been downsized. ​

This week also includes the ISM reports which should show manufacturing activity is picking up and the service sector is cooling.

Weakening growth prospects is not the takeaway from this earnings season, but that could change if Apple and Amazon’s results tell a different story.

US Data

Both the ISM Chicago PMI and Dallas Manufacturing survey showed activity improved for a second consecutive month. ​

The Chicago PMI was softer-than-expected, but has yet to benefit from increasing aircraft orders. ​ The Dallas Fed did not provide an inspiring outlook as activity remains sluggish, while prices paid and received rose. ​

The manufacturing part of the economy is still in contraction territory and the recovery will likely be unbalanced.

Crude oil

Crude prices ended a solid month on a high note as demand prospects remain impressive and no one doubts that OPEC+ will keep this market tight. ​ The oil market saw the best month since early 2022 as most of the major central banks appear at the tail end of their tightening cycles.

Also supporting oil was the Goldman Sachs note that suggested we are not at peak demand. ​ The crude demand outlook is getting a boost on soft landing hopes for the US and Europe. ​

The ace up the sleeve of oil bulls is that the energy market is still awaiting massive stimulus from China that should boost global growth prospects.

WTI crude has rallied above $80 and is trying to make a run towards the $84.50 level. ​ Exhaustion might settle in until we get beyond Friday’s NFP report.


Gold prices are attempting a bullish break out as optimism grows that the major central banks are all approaching the end of their tightening cycles. ​

The RBA might be one-and-done this week and the BoE might be done after a couple more. ​ The Fed is clearly waiting on the data, but they might be done if inflation plays nice. ​ ​

Gold’s rally could extend if growth prospects turn sour. ​ If Wall Street starts aggressively in rate cuts by the first quarter of 2024, gold could easily find a home above the $2000 level.

It seems gold will need to wait for Apple’s earnings and the NFP report, before it delivers its next big move.


Bitcoin prices softened after Curve Finance announced they suffered a breach.

Some​ $50 million have been drained, which led to the over 10% drop with the Curve stablecoin. ​ This is a blow for Ethereum’s DeFi ecosystem, but not likely to trigger a massive selloff for Bitcoin. ​


Edward Moya is Senior Market Analyst, The Americas at OANDA

Opinions are the author’s, not necessarily that of OANDA Global Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.