General Market Comment
US indices closed mixed on Thursday. Shares in the Energy (-2.2%), Media (-1.27%) and Automobiles & Components (-0.93%) sectors were under pressure while shares in the Health Care Equipment & Services (+0.42%), Commercial & Professional Services (+0.38%) and Diversified Financials (+0.37%) sector ended on a positive note. On the economic data front, initial jobless claims reached 214k in week ended November 3rd, in-line with estimates, down slightly from 215k a week earlier. Continuing claims slightly fell to 1.623M in week ended October 27th (forecasted 1.634M) compared to 1.631M in the previous week. Finally, the Federal Reserve maintained the federal funds rate to the range of 2-2.25%. The Fed mentioned that the economy has been rising at a “strong” rate and expects “further gradual” increases in the federal funds rate in the near future. The S&P 500 (2,806.83) remains above its 20d moving average (2,740.20 – negative slope) but stays below 50d moving average (2,831.50 – negative slope).
European markets are expected to open on a negative note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Thursday. On the economic data front, initial jobless claims reached 214k in week ended November 3rd, in-line with estimates, from 215k a week earlier. Continuing claims slightly diminished to 1.623M in week ended October 27th (forecasted 1.634M) compared to 1.631M in the previous week. The Bloomberg consumer comfort index improved to 61.3 in week ended November 4th vs. 60.3 a week earlier. Finally, the Federal Reserve maintained the federal funds rate to the range of 2-2.25%. The Fed mentioned that the economy has been rising at a “strong” rate and expects “further gradual” increases in the federal funds rate in the near future.
The Euro was bearish against all of its major pairs. Germany recorded a current account surplus of 18.4B euros in September (vs 20B euros surplus expected) from a surplus of 17.1B euros in August. Exports declined by 0.8% MoM in September (vs +0.4% expected) from an improvement of 0.1% in October while Imports decreased by 0.4% MoM (vs +0.8% expected) compared to a fall of 2.4% in the previous month. In the UK, RICS house price index fell to -10 in October (vs -2 expected) from -2 a month earlier.
The Australian dollar was higher against most of its major pairs except for the USD.
Commodities
After the close of Wall Street, WTI Crude Future (DEC 18) was down $1.1 to $60.61. The contract was below its 20D MA (@ $66.64) and below its 50D MA (@ $69.27). The 14d RSI below 30 (21.04) indicates WTI Crude Future (DEC 18) was oversold.
Gold was down $3 to $1223.5. The precious metal was below its 20D MA (@ $1227) and above its 50D MA (@ $1210).
Copper Future (DEC 18) on Comex was down 2.6c to 272.85c/lb. The contract was below its 20D MA (@ 275.16c) and below its 50D MA (@ 274.11c). In Europe, the London Metal Exchange reported its copper inventories decreased 1875 tons to 172325 tons.