General Market Comment
US indices closed lower on Thursday as the Dow dropped by 660 pts. Shares in the Technology Hardware & Equipment (-7.87%), Semiconductors & Semiconductor Equipment (-6.02%) and Transportation (-3.84%) sectors fell throughout the day. On the economic data front, MBA mortgage applications fell by 8.5% in week ended December 28th from a decline of 1.4% in the prior week. The ADP employment change increased to 271k in December (estimated 180k) compared to 157k in the previous week. Also, initial jobless claims advanced to 231k in week ended December 29th (forecasted 220k) vs 221k a week earlier. Continuing claims reached 1.74M in week ended December 22nd (expected 1.69M) from 1.708M in the prior week. In other news, the Bloomberg consumer comfort index improved to 59.6 in week ended December 30th compared to 59.4 in the previous week. Finally, the ISM manufacturing index declined to 54.1 in December (estimated 57.5) vs. 59.3 in November. The S&P 500 (2,447.89) remains below its 20d moving average (2,547.32 – negative slope) and 50d moving average (2,649.54 – negative slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Thursday. On the economic data front, MBA mortgage applications fell by 8.5% in week ended December 28th from a decline of 1.4% in the prior week. The ADP employment change increased to 271k in December (estimated 180k) compared to 157k in the previous week. Also, initial jobless claims advanced to 231k in week ended December 29th (forecasted 220k) vs 221k a week earlier. Continuing claims reached 1.74M in week ended December 22nd (expected 1.69M) from 1.708M in the prior week. In other news, the Bloomberg consumer comfort index improved to 59.6 in week ended December 30th compared to 59.4 in the previous week. Finally, the ISM manufacturing index declined to 54.1 in December (estimated 57.5) vs. 59.3 in November.
The Euro was bullish against most of its major pairs except for the NZD, the CAD and the JPY. The euro zone M3 money supply growth slowed to 3.7% in November (+3.8% expected) from +3.9% in October.
The Australian dollar was bearish against most of its major pairs except for the USD.
Commodities
After the close of Wall Street, WTI Crude Future (FEB 19) was up $0.6 to $47.1. The contract was below its 20D MA (@ $48.53) and below its 50D MA (@ $54.84).
Gold was up $9.5 to $1294.1. The precious metal was above its 20D MA (@ $1261) and above its 50D MA (@ $1238). The 14d RSI above 70 (74.65) indicates gold was overbought.
Copper Future (MAR 19) on Comex was down 4.3c to 258c/lb. The contract was below its 20D MA (@ 270.57c) and below its 50D MA (@ 273.94c). In Europe, the London Metal Exchange reported its copper inventories increased 225 tons to 132400 tons.