U.S. indices closed mixed on Wednesday after the Federal Reserve gave mixed signals regarding the future of interest rate cuts after lowering interest rates by 0.25%. Shares in the Banks (+0.66%), Technology Hardware & Equipment (+0.51%) and Utilities (+0.47%) sectors traded higher while shares in the Transportation (-0.98%), Telecommunication Services (-0.49%) and Automobiles & Components (-0.44%) sectors were under pressure. The S&P 500 (3,006.73) trades above its 20d moving average (2,948.29 – positive slope) and its 50d moving average (2,951.29 – flat slope).
On the economic data front, housing starts rose to 1.364M in August (vs. 1.250M expected), the highest level since 2007, from 1.215M in July. On Thursday we expect jobless claims for the week ending September 14 to increase 9K from the prior week to 213K. The Leading Index reading for August is anticipated to fell 0.1% MoM. Finally, existing home sales are expected to drop to 5.38M in August from 5.42M in July.
Regarding Crude Oil, prices edged lower on Wednesday after Saudi Arabia said it would quickly restore full production following last week’s attacks on its facilities and the EIA Petroleum Report showed Crude Oil inventories increased 1.1M Barrels.
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bullish against most of its major pairs with the exception of the JPY on Wednesday. On the economic data front, the US MBA Mortgage Index decreased 0.1% this week compared to an increase of 2.0% last week. US Housing Starts rose to 1364K beating estimates of 1250K for August compared to a revised 1215K for July, marking highs not seen since 2007. The FED cut its Main Target Rate a quarter point, in line with expectations. On Thursday we expect US Jobless claims to increase 9K from 204K the prior week. The US Leading Index reading for August is anticipated to decrease 0.1% compared to an increase of 0.5% in July. Finally, US Existing Home Sales is expected to fall to 5.38M for August from 5.42M in July.
The Euro was bullish against most of its major pairs with the exception of the GBP, JPY and USD. In Europe, the final reading of eurozone consumer price index came in at +1.0% on a yearly basis in August, as expected. On a monthly basis, the consumer price index for August rose 0.1% versus +0.2% expected and a decline of 0.5% in the previous month. New cars registrations in Europe fell 8.4% in August, after a 1.4% decline in the previous month.
The Australian dollar was bearish against most of its major pairs with the exception of the NZD, CAD and CHF.
Commodities
WTI Crude Future (OCT 19) is down $1.09 to $58.25 this morning. The contract is above its 20D MA (@ $55.55) and above its 50D MA (@ $56.29). Watch today’s Crude Oil Inventories report from the US Department of Energy for the week ended September 13 (seen at -2150k barrels) vs -6912k barrels the previous week.
Gold is about flat to $1494 The precious metal is below its 20D MA (@ $1515) and above its 50D MA (@ $1474).
Copper Future (DEC 19) on Comex is about flat to 261.3c/lb. The contract is above its 20D MA (@ 263.50c) and below its 50D MA (@ 259.9c). In Europe, the London Metal Exchange reported today its copper inventories decreased 3525 tons to 295800 tons.