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.
BRENT Crude Technical Snap 02.10.19
BRENT Crude Technical Snap (Daily)
| Pivot: 59.70 Our preference: short positions below 59.70 with targets at 59.10 & 58.85 in extension. Alternative scenario: above 59.70 look for further upside with 60.10 & 60.45 as targets. Comment: a break below 59.10 would trigger a drop towards 58.85. |
Economic Calendar 02.10.19
Today’s Economic Events
13:15 US SEP ADP Employment Report (k) exp: 133 prev: 195
15:30 US W38 Crude Oil Inventories (WoW chg) exp: NA prev: 2412
General Market Comment 02.10.19
US indices were under pressure on Tuesday after disappointing manufacturing data fuelled worries over the U.S. economy. ISM Manufacturing PMI declined to 47.8 missing the 50 estimate for September compared to 49.1 in August, marking a 10 year low. Every S&P 500 sector closed in the red with the worst performing stocks in the Automobiles & Components (-3%), Transportation (-2.67%) and Capital Goods (-2.49%) sectors. In other economic news, Markit US Manufacturing PMI slightly increased to 51.1 beating the 51 estimate for the September final reading compared to 51 in the preliminary reading. US Construction Spending increased 0.1% missing the 0.5% estimate for August compared to a revised 0.0% change the prior month. Finally US Auto Sales rose to 17.19M beating the 17M estimate for September compared to 16.97M in August. On Wednesday, economists expect US MBA Mortgage Applications for the week ending September 27 and ADP Employment Change for September.
European markets are expected to start-open on a positive-negative-flat note.
EMEA Weekly Base Oil Price Report 01.10.19
EMEA Base Oil Price Report
BY RAY MASSON
Base oil prices are coming under pressure from a variety of factors that differ depending on category. API Group I prices are being squeezed by demand reductions that may be part of a seasonal cycle or signs of economic downturns in major markets such as Germany, Italy and Spain.
Group II prices are relatively stable, with one major producer trying to impose increases for October, although this move is being met with resistance from buyers saying they have ample choice in the Group II market and will change suppliers if needs be.
BRENT Crude Technical Snap 01.10.19
BRENT Crude Technical Snap (Daily)
| Pivot: 60.20 Our preference: short positions below 60.20 with targets at 59.20 & 58.80 in extension. Alternative scenario: above 60.20 look for further upside with 60.50 & 60.80 as targets. Comment: the RSI calls for a new downleg. |
Economic Calendar 01.10.19
Today’s Economic Events
US SEP Total Vehicule Sales (M) exp: 17 prev: 17
08:50 FR SEP F Markit Manufacturing PMI exp: 50.3 prev: 50.3
09:00 EU SEP F Markit Manufacturing exp: 45.8 prev: 45.6
14:45 US SEP F Markit Manufacturing PMI exp: NA prev: 51
15:00 US AUG Construction Spending (MoM) exp: 0.5% prev: 0.1%
15:00 US SEP ISM – Manufacturing exp: 50.2 prev: 49.1
15:00 US SEP ISM – Price Paid exp: 50.9 prev: 46
General Market Comment 01.10.19
U.S. indices closed slightly higher on Monday to end a volatile third quarter lifted by shares in the Technology Hardware & Equipment (+1.77%), Consumer Durables & Apparel (+1.32%), Health Care Equipment & Services (+1.3%) sectors while shares in the Energy (-0.75%) sector were under pressure.
On the economic data front, the Market News International Chicago PMI declined to 47.1 for September (vs. 50.0 estimated) from 50.4 in August. On Tuesday, economists expect the ISM Manufacturing PMI to drop to 50.1 in September and Construction Spending to grow 0.4% MoM in August.
The S&P 500 (2976.74) trades below its 20d moving average (2,982.16 – positive slope) but above its 50d moving average (2,948.83 – negative slope).
European markets are expected to start on a positive note.