General Market Comment 07.11.18

General Market Comment

US indices closed higher on Wednesday after the Democrats took over the House at the midterm elections, resulting in the best rally after a midterm election since 1982. Shares in the Retailing (+4.09%), Software & Services (+3.36%) and Health Care Equipment & Services (+3.09%) sectors jumped higher. On the economic data front, MBA mortgage applications decreased by 4% in week ended November 2 (vs -2.5% in the prior week). The S&P 500 (2,813.89) breaks above its 20d moving average (2,736.26 – negative slope) but stays below 50d moving average (2,833.64 – negative slope).

European markets are expected to start on a positive note.

Foreign Exchange

The US dollar was bearish against all of its major pairs on Wednesday. On the economic data front, MBA mortgage applications decreased by 4% in week ended November 2nd from a decline of 2.5% in the prior week.

The Euro was mixed against its major pairs. Euro zone PMI composite index was down to 53.1 in October vs 54.1 a month earlier. Euro zone retail sales were flat in September vs +0.3% a month earlier (revised from -0.2%). Economists anticipated +0.1%. In Germany, industrial production advanced 0.2% in September vs +0.1% a month earlier (revised from -0.3%). In addition, construction PMI declined to 49.8 in October vs 50.2 a month earlier. In UK, house prices rose 0.7% in September vs +0.8% expected and +1.3% in August (revised from -1.4%).

The Australian dollar was higher against most of its major pairs except for the NZD.

Commodities

After the close of Wall Street, WTI Crude Future (DEC 18) was down $0.6 to $61.61. The contract was below its 20D MA (@ $67.14) and below its 50D MA (@ $69.44). The 14d RSI below 30 (23.05) indicates WTI Crude Future (DEC 18) was oversold. The US Department of Energy reported that, for the week ended 2 November, crude oil inventories increased 5783k barrels compared to the previous week.

Gold was about flat to $1226.5. The precious metal was below its 20D MA (@ $1227) and above its 50D MA (@ $1209).

Copper Future (DEC 18) on Comex was up 1.1c to 274.3c/lb. The contract was below its 20D MA (@ 275.48c) and above its 50D MA (@ 274.1c). In Europe, the London Metal Exchange reported its copper inventories decreased 1200 tons to 174200 tons.