General Market Comment 07.12.18

General Market Comment

US indices dropped lower to finish the week on Friday, pressured by shares in the Semiconductors & Semiconductor Equipment (-3.95%), Technology Hardware & Equipment (-3.69%) and Transportation (-3.68%) sectors. On the economic data front, change in nonfarm payrolls decreased to 155k in November (estimated 198k) from 237k in October while change in manufacturing payrolls added 27k jobs in November (forecasted 18k) vs. 26k a month earlier. In other news, the unemployment rate remained unchanged MoM at 3.7% in November, in-line with estimates. Wholesale inventories improved by 0.8% MoM in October (expected 0.7%) from 0.4% in September. Finally, the University of Michigan sentiment index remained unchanged MoM in a preliminary estimate of 97.5 in December (estimated 97). The S&P 500 (2,633.08) remains below its 20d moving average (2,711.81 – negative slope) and 50d moving average (2,758.02 – negative slope).

European markets are expected to start on a negative note.

Foreign Exchange

The US dollar was mixed against its major pair on Friday. On the economic data front, change in nonfarm payrolls decreased to 155k in November (estimated 198k) from 237k in October while change in manufacturing payrolls added 27k jobs in November (forecasted 18k) vs. 26k a month earlier. In other news, the unemployment rate remained unchanged MoM at 3.7% in November, in-line with estimates. Wholesale inventories improved by 0.8% MoM in October (expected 0.7%) from 0.4% in September. Finally, the University of Michigan sentiment index remained unchanged MoM in a preliminary estimate of 97.5 in December (estimated 97).

The Euro was bullish against most of its major pairs except for the CAD. Eurozone revised GDP for the 3rd quarter at 0.2%, in line with expectations, from +0.4% for the 2nd quarter. Industrial production in Germany fell 0.5% in October (vs +0.3% expected) from +0.1% in September (revised from +0.2%).

The Australian dollar was lower against all of its major pairs.

Commodities

After the close of Wall Street, WTI Crude Future (JAN 19) was up $0.9 to $52.36. The contract was below its 20D MA (@ $54.03) and below its 50D MA (@ $63.09).

Gold was up $10.4 to $1248.1. The precious metal was above its 20D MA (@ $1223) and above its 50D MA (@ $1220).

Copper Future (MAR 19) on Comex was about flat to 275.15c/lb. The contract was below its 20D MA (@ 276.52c) and below its 50D MA (@ 277.74c). In Europe, the London Metal Exchange reported its copper inventories decreased 500 tons to 124450 tons.