U.S. indices closed higher on Thursday after China announced it would not retaliate against the latest U.S. trade tariffs which helped lift shares in the Semiconductors & Semiconductor Equipment (+2.37%), Transportation (+1.98%) and Banks (+1.95%) sectors. On the economic data front, 2Q GDP growth was revised to 2.0% (as expected) from 2.1% previously. Jobless claims rose to 215K in the week ending Aug 24 (expected 214K) from 209K in the prior week. Wholesale inventories gained 0.2% MoM in July (as expected). On Friday, traders look towards the latest earnings results from Campbell Soup (CPB) which is anticipated to report 4Q EPS of $0.42 compared to $0.25 a year ago. The S&P 500 (2,924.58) breaks above its 20d moving average (2,893.21 – negative slope) but stays below its 50d moving average (2,945.60 – flat slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Thursday except the CAD. On the economic data front, U.S. jobless claims rose 4K to 215K in the week ending Aug 24th compared to 209K in the prior reading. Analysts were anticipating 214K. Filings for unemployment benefits remain near cyclical lows. 2Q U.S. GDP grew at 2%, revised from 2.1% which was in-line with expectations.Wholesale inventories gained 0.2% in July in-line with estimates. Inventories were flat in June. Finally the Bloomberg consumer comfort index improved to 62.5 last week compared to 61.5 in the prior week. The index has been in a steady uptrend since 2012.
The Euro was mixed against all its major pairs. In Europe, the euro-zone consumer confidence index was confirmed at -7.1 in August in second reading vs -6.6 in July. The economic confidence index rose to 103.1 (102.3 expected) from 102.7 a month earlier. The Germany CPI index growth slowed to 1.4% YoY in August from 1.7% in July. It was expected to be 1.5%. French GDP growth was revised up to 0.3% for 2Q vs 0.2% in first reading.
The Australian dollar was higher against all of its major pairs with the exception of the CAD.
Commodities
After the close of Wall Street, WTI Crude Future (OCT 19) was up $0.8 to $56.54. The contract was above its 20D MA (@ $54.82) and above its 50D MA (@ $56.51).
Gold was down $11.7 to $1527.3. The precious metal was above its 20D MA (@ $1505) and above its 50D MA (@ $1452).
Copper Future (DEC 19) on Comex was up 1.2c to 257.6c/lb. The contract was below its 20D MA (@ 258.29c) and below its 50D MA (@ 265.52c). In Europe, the London Metal Exchange reported its copper inventories increased 1875 tons to 336575 tons.