U.S. indices closed higher on Wednesday lifted by shares in the Consumer Durables & Apparel (+1.18%), Software & Services (+1.13%) and Pharmaceuticals, Biotechnology & Life Sciences (+1.13%) sectors. The Federal Reserve lowered its benchmark rate by 25 basis points to a target range of 1.50% to 1.75% as expected. Chairman Jerome Powell said: “We see the current stance of policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.” The S&P 500 (3,046.77) stays above its 20d moving average (2,981.06 – positive slope) and 50d moving average (2,965.46 – positive slope).
On the economic data front, the ADP National Employment Report stated that U.S. firms added 125,000 jobs in October (+110,000jobs expected, +93,000 jobs in September). Also, U.S. third quarter GDP grew at an annualized rate of 1.9% on quarter (+1.6% expected, +2.0% on the second quarter).
On Thursday, economists expect initial jobless claims for the week ending October 26 to rise to 215,000. Personal income and personal spending are expected to grow 0.3% on month in September, while the Market News International Chicago PMI is anticipated to climb to 48.0 in October from 47.1 in September.
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bearish against most of its major pairs on Wednesday, with the exception of the CAD. On the economic data front, the Federal Open Market Committee lowered rates by 25 basis points to 1.75% as expected. MBA Mortgage Applications rose 0.6% for the week ending October 25th, up from a fall of 11.9% in the prior week. The ADP National Employment Report stated that firms added 125K jobs, above the 110K estimate for October, up 32K from a revised 93K jobs last month. Gross Domestic Product held up at 1.9%, beating the 1.6% estimate for the third quarter advanced reading, slightly down from 2.0% in the prior reading. On Thursday, economists expect Initial Jobless Claims to rise for the week ending October 26th and Continuing Claims to be lower for the week ending October 19th. Also expected to release on Thursday is Personal Income for September, Personal Spending for September and the Market News International Chicago Purchasing Managers Index is anticipated to come in higher for October.
The Euro was bearish against most of its major pairs with the exception of the CAD, JPY and USD. In Europe, the euro-zone consumer confidence index was -7.6 in October in final reading, as in first one, vs -6.5 in September. Germany CPI rose by 0.1% in October, in first estimation, after being flat a month earlier. French GDP growth was 0.3% in 3Q, as in the previous quarter. It was expected to be 0.2%.
The Australian dollar was bullish against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (DEC 19) was down $0.6 to $54.89. The contract was above its 20D MA (@ $54.12) and below its 50D MA (@ $55.16). The US Department of Energy reported that, for the week ended 25 October, crude oil inventories increased 5702k barrels compared to the previous week.
Gold was up $6.9 to $1494.5. The precious metal was below its 20D MA (@ $1495) and below its 50D MA (@ $1504).
Copper Future (DEC 19) on Comex was down 1.1c to 268.05c/lb. The contract was above its 20D MA (@ 262.46c) and above its 50D MA (@ 260.8c). In Europe, the London Metal Exchange reported its copper inventories increased 19575 tons to 270325 tons.