General Market Comment
US indices closed lower on Thursday, pressured by shares in the Semiconductors & Semiconductor Equipment (-1.08%), Software & Services (-1.02%) and Diversified Financials (-0.89%) sectors. On the economic data front, personal income increased by 0.5% in October (estimated 0.4%) from 0.2% in September while personal spending advanced by 0.6% in October (forecasted 0.4%) compared to 0.2% a month earlier. In other news, initial jobless claims reached 234k in week ended November 24th (expected 220k) from 224k in the prior week. Continuing claims increased to 1.71M in week ended November 17th (estimated 1.663M) vs. 1.66M the week before. Also, the Bloomberg consumer comfort index decreased to 60.6 in week ended November 25th compared to 61.3 a week earlier. Pending home sales fell by 2.6% MoM in October (forecasted 0.5%) from an increase of 0.7% in September. Finally, the Fed released the meeting minutes of its November 7-8th meeting stating that an appreciation of the dollar may pose a risk for domestic economic growth and inflation and reiterated the need for further gradual increase in the benchmark rate. Finally, the FOMC also discussed the idea of targeting the Overnight Bank Funding Rate instead of the Federal Funds Rate. The S&P 500 (2,737.76) remains above its 20d moving average (2,721.38 – positive slope) but stays below 50d moving average (2,778.45 – negative slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bullish against most of its major pairs on Thursday with the exception of the JPY and the EUR. On the economic data front, personal income increased by 0.5% in October (estimated 0.4%) from 0.2% in September while personal spending advanced by 0.6% in October (forecasted 0.4%) compared to 0.2% a month earlier. In other news, initial jobless claims reached 234k in week ended November 24th (expected 220k) from 224k in the prior week. Continuing claims increased to 1.71M in week ended November 17th (estimated 1.663M) vs. 1.66M the week before. Also, the Bloomberg consumer comfort index decreased to 60.6 in week ended November 25th compared to 61.3 a week earlier. Pending home sales fell by 2.6% MoM in October (forecasted 0.5%) from an increase of 0.7% in September. Finally, the Fed released the meeting minutes of its November 7-8th meeting stating that an appreciation of the dollar may pose a risk for domestic economic growth and inflation and reiterated the need for further gradual increase in the benchmark rate. Finally, the FOMC also discussed the idea of targeting the Overnight Bank Funding Rate instead of the Federal Funds Rate.
The Euro was bullish against most of its major pairs except for the JPY. The euro zone consumer confidence index was -3.9 in final estimation in November, as expected, vs -2.7 in October. The German CPI was up by 0.1% in November MoM in first reading (+0.2% expected) after a 0.2% rise a month earlier. Separately, the German unemployment rate fell to 5% in November (5% expected), a new historical low, vs +5.1% in October.
The Australian dollar was higher against most of its major pairs except for the JPY and the EUR.
Commodities
After the close of Wall Street, WTI Crude Future (JAN 19) was up $1.1 to $51.37. The contract was below its 20D MA (@ $57.1) and below its 50D MA (@ $65.34). The 14d RSI below 30 (26.97) indicates WTI Crude Future (JAN 19) was oversold.
Gold was up $2.8 to $1224.1. The precious metal was above its 20D MA (@ $1220) and above its 50D MA (@ $1215).
Copper Future (MAR 19) on Comex was down 2.3c to 279.05c/lb. The contract was above its 20D MA (@ 276.43c) and above its 50D MA (@ 278.46c). In Europe, the London Metal Exchange reported its copper inventories decreased 1075 tons to 136250 tons.