US indices tumbled on Wednesday as investors fear a global recession is on the horizon. All S&P 500 sectors closed lower with the most pressure felt in the Automobiles & Components (-3.51%), Energy (-2.61%) and Diversified Financials (-2.32%) sectors.
On the economic data front, US MBA Mortgage Applications rose 8.1% for the week ending September 27th compared to a -10.1% fall in the prior week. The ADP US Employment Report showed 135K jobs were added in September which was below the 140K anticipated compared a revised 157K jobs the prior month.
Today, traders will be focusing on the Markit US Services PMI for Sept to compare with Tuesday’s disappointing manufacturing data. Economists expect Initial Jobless Claims for the week ending September 28th to increase to 215K. Finally, we will see US Manufacturers New Orders and US Durable Goods New Orders for August in a final reading.
The S&P 500 (2887.61) trades below both its 20d moving average (2,981.35 – negative slope) and 50d moving average (2,945.58 – negative slope).
European markets are expected to open on a negative note.
Foreign Exchange
The US dollar was bearish against most of its major pairs on Wednesday with the exception of the AUD, CAD and CHF. On the economic data front, US MBA Mortgage Applications rose 8.1% for the week ending September 27th compared to a -10.1% fall in the prior week. The ADP US Employment Report showed 135K jobs were added in September which was below the 140K anticipated compared a revised 157K jobs the prior month. On Thursday, traders will be focusing on the Markit US Services PMI for Sept to compare with Tuesday’s disappointing manufacturing data. Economists expect Initial Jobless Claims for the week ending September 28th to increase to 215K. Finally, we will see US Manufacturers New Orders and US Durable Goods New Orders for August in a final reading.
The Euro was bullish against most of its major pairs with the exception of the NZD and JPY. In Europe, Germany’s institutes downgraded their outlook for 2020 Germany growth to 1.1% vs 1.8% previously expected.
The Australian dollar was bearish against most of its major pairs with the exception of the CAD and CHF.
Commodities
After the close of Wall Street, WTI Crude Future (NOV 19) was down $1.1 to $52.56. The contract was below its 20D MA (@ $56.71) and below its 50D MA (@ $55.76). The US Department of Energy reported that, for the week ended 27 September, crude oil inventories increased 3104k barrels compared to the previous week.
Gold was up $21.5 to $1500.6. The precious metal was below its 20D MA (@ $1501) and above its 50D MA (@ $1496).
Copper Future (DEC 19) on Comex was about flat to 256.95c/lb. The contract was below its 20D MA (@ 261.48c) and below its 50D MA (@ 261.05c). In Europe, the London Metal Exchange reported its copper inventories decreased 4700 tons to 254075 tons.