General Market Comment
US indices closed lower as the Dow plunged by appx. 500 pts to finish the week on Friday. Shares in the Pharmaceuticals, Biotechnology & Life Sciences (-3.93%), Food & Staples Retailing (-3.79%) and Technology Hardware & Equipment (-2.93%) sectors were under pressure. On the economic data front, retail sales improved by 0.2% MoM in November (estimated 0.1%) from a rise of 1.1% in October. In other news, industrial production rose by 0.6% MoM in November (forecasted 0.3%) compared to a decline of 0.2% a month earlier. Capacity utilization slightly improved to 78.5% in November (expected 78.6%) vs. 78.1% in October. Also, Markit US composite PMI declined to 53.6 in a preliminary estimate in December vs. 54.7 in November while Markit US services PMI decreased to 53.4 in a preliminary estimate in December from 54.7 in the prior month. Finally, Markit US manufacturing PMI declined to 53.9 in a preliminary estimate in December (estimated 55) vs. 55.3 in the previous month. The S&P 500 (2,599.95) remains below its 20d moving average (2,683.72 – negative slope) and 50d moving average (2,729.51 – negative slope).
European markets are expected to open on a positive note.
Foreign Exchange
The US dollar was bullish against most of its major pair on Friday with the exception of the JPY. On the economic data front, retail sales improved by 0.2% MoM in November (estimated 0.1%) from a rise of 1.1% in October. In other news, industrial production rose by 0.6% MoM in November (forecasted 0.3%) compared to a decline of 0.2% a month earlier. Capacity utilization slightly improved to 78.5% in November (expected 78.6%) vs. 78.1% in October. Also, Markit US composite PMI declined to 53.6 in a preliminary estimate in December vs. 54.7 in November while Markit US services PMI decreased to 53.4 in a preliminary estimate in December from 54.7 in the prior month. Finally, Markit US manufacturing PMI declined to 53.9 in a preliminary estimate in December (estimated 55) vs. 55.3 in the previous month.
The Euro was bearish against most of its major pairs with the exception of the AUD and the NZD. The EU27 new car registrations plunged 8% in November after a 7.3% drop a month earlier. The euro-zone PMI manufacturing index fell to 51.4 for December in first estimation (51.8 expected) from 51.8 in November. Separately, the euro-zone PMI services index declined to 51.4 (43.4 anticipated) from 53.4.
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 (JAN 19) was down $1.4 to $51.16. The contract was below its 20D MA (@ $52.45) and below its 50D MA (@ $60.79).
Gold was down $3.8 to $1238.2. The precious metal was above its 20D MA (@ $1232) and above its 50D MA (@ $1225).
Copper Future (MAR 19) on Comex was about flat to 275.75c/lb. The contract was below its 20D MA (@ 277.5c) and below its 50D MA (@ 277.08c). In Europe, the London Metal Exchange reported its copper inventories increased 1250 tons to 121225 tons.