General Market Comment
U.S. indices closed mixed on Thursday as the Dow reversed its triple-digit loss to finish almost flat. Shares in the Automobiles & Components (-2.22%), Banks (-1.87%) and Energy (-1.77%) sectors closed lower while shares in the Real Estate (+2.66%), Media (+1.43%) and Retailing (+0.94%) sectors gained momentum. On the economic data front, ADP private jobs growth slowed to 179K in November (estimated +195K) from 225K in October. Initial jobless claims fell to 231K in week ended December 1st (forecast 225K) from 235K in the prior week. Continuing claims declined to 1.631M in week ended November 24th (expected 1.69M) from 1.71M a week earlier. Also, final readings of Markit U.S. services PMI posted at 54.7 in November (vs 54.4 previously estimated, 54.8 in October). The ISM non-manufacturing index advanced to 60.7 in November (forecast 59.0) compared to 60.3 in October. Finally, factory orders decreased by 2.1% MoM in October (expected -2.0%). Final readings of durable goods orders fell 4.3% MoM in October (estimated -2.4%, preliminary -4.4%). The S&P 500 (2,795.95) remains below its 20d moving average (2,720.85 – negative slope) and 50d moving average (2,763.48 – negative slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was mixed against its major pair on Thursday. On the economic data front, ADP employment change decreased to 179k in November (estimated 195k) from 225k in the previous month. Initial jobless claims slightly decreased to 231k in week ended December 1st (forecasted 225k) compared to 235k in the prior week. Continuing claims declined to 1.631M in week ended November 24th (expected 1.69M) from 1.71M a week earlier. In other news, Markit US services PMI slightly improved to 54.7 in November (estimated 54.4) from 54.8 in October while Markit US composite PMI also increased to 54.7 in November vs. 54.4 a month earlier. The ISM manufacturing index advanced to 60.7 in November (forecasted 59) compared to 60.3 in October. Also, factory orders decreased by 2.1% in October (expected -2%) vs. an improvement of 0.2% in September. Durable goods orders fell by 4.3% in October (estimated -2.4%) from a decline of 4.4% in September. Finally, the Bloomberg consumer comfort index slightly decreased to 60.3 in week ended December 2nd vs. 60.6 a week earlier.
The Euro was bullish against most of its major pairs except for the GBP, the CHF and the JPY. German factory orders edged up 0.3% in October (-0.4 anticipated vs. +0.1% in September. Separately, German construction PMI rose to 51.3 in November from 49.8 in October.
The Australian dollar was lower against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JAN 19) was down $1.2 to $51.69. The contract was below its 20D MA (@ $54.46) and below its 50D MA (@ $63.49). The US Department of Energy reported that, for the week ended 30 November, crude oil inventories fell 7323k barrels compared to the previous week.
Gold was about flat to $1238.1. The precious metal was above its 20D MA (@ $1222) and above its 50D MA (@ $1219).
Copper Future (MAR 19) on Comex was down 2.4c to 274.95c/lb. The contract was below its 20D MA (@ 276.55c) and below its 50D MA (@ 277.86c). In Europe, the London Metal Exchange reported its copper inventories decreased 3250 tons to 124950 tons.