General Market Comment
US indices closed higher on Wednesday as the Dow reached another record high for the second day straight. Shares in the Banks (+1.25%), Technology Hardware & Equipment (+0.93%) and Energy (+0.82%) sectors jumped higher. On the economic data front, ADP employment added 230K jobs in September (vs +184K expected, +168K in August). In other news, Markit U.S. Services PMI fell to 53.5 in September (vs 53.0 expected) from 54.8 in August, and Markit U.S. Composite PMI dropped to 53.9 from 54.7. Finally, ISM non-manufacturing PMI climbed to 61.6 in September (vs 58.0 expected) from 58.5 in August. The S&P 500 (2,925.51) remains above its 20d moving average (2,905.84 – positive slope) and 50d moving average (2,875.06 – positive slope).
European markets are expected to start on a negative note.
Foreign Exchange
The US dollar was higher against all of its major pairs on Wednesday. On the economic data front, MBA mortgage applications remained flat in week ended September 28th even though it advanced by 2.9% the prior week. On the other hand, ADP employment added 230k jobs in September (forecasted 184k) from 168k in August. In other news, Markit US services PMI reached 53.5 in September (estimated 53) vs. 54.8 last month while Markit US composite PMI reached 53.9 in September compared to 54.7 a month earlier.
The Euro was mixed against its major pairs. Euro zone PMI services index was confirmed at 54.7 in final reading vs 54.4 a month earlier. UK PMI services index fell to 53.9 in September from 54.3 in August. It was expected to be 54.
The Australian dollar was lower against most of its major pairs with the exception of the NZD.
Commodities
After the close of Wall Street, WTI Crude Future (NOV 18) was up $1 to $76.21. The contract was above its 20D MA (@ $70.85) and above its 50D MA (@ $68.65). The 14d RSI above 70 (75.85) indicates WTI Crude Future (NOV 18) was overbought. The US Department of Energy reported that, for the week ended 28 September, crude oil inventories increased 7975k barrels compared to the previous week.
Gold was down $4.5 to $1198.8. The precious metal was above its 20D MA (@ $1198) and below its 50D MA (@ $1201).
Copper Future (DEC 18) on Comex was up 2.2c to 282.85c/lb. The contract was above its 20D MA (@ 273.6c) and above its 50D MA (@ 273.38c). In Europe, the London Metal Exchange reported its copper inventories decreased 2425 tons to 194175 tons.