US indices closed mixed on Wednesday. Shares in the Energy (-1.08%), Semiconductors & Semiconductor Equipment (-0.68%) and Media (-0.09%) sectors were under pressure while shares in the Real Estate (+2.33%), Utilities (+2.14%) and Software & Services (+1.85%) sectors gained traction. On the economic data front, MBA mortgage applications improved by 1.5% in week ended May 31st from a decline of 3.3% in the previous week. The ADP employment change dropped to 27k in May (forecasted 185k) from 271k in the previous month. In other news, Markit US services PMI reached 50.9 in May (as expected) vs. 53 in April while Markit US composite PMI reached 50.9 in May vs. 53 a month earlier. Also, the ISM non-manufacturing index increased to 56.9 in May (estimated 55.4) from 55.5 in the prior month. Finally, the Federal Reserve released their Beige Book stating that between April through mid-May “almost all districts reported some growth, and a few saw moderate gains in activity”. Nationwide employment continued to improve and the outlook for the coming months was “solidly positive”.
The S&P 500 (2,826.15) stays below both its 20d moving average (2,828.70 – negative slope) and 50d moving average (2,868.62 – flat slope).
European markets are expected to open on a positive note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Wednesday. On the economic data front, MBA mortgage applications improved by 1.5% in week ended May 31st from a decline of 3.3% in the previous week. The ADP employment change dropped to 27k in May (forecasted 185k) from 271k in the previous month. In other news, Markit US services PMI reached 50.9 in May (as expected) vs. 53 in April while Markit US composite PMI reached 50.9 in May vs. 53 a month earlier. Also, the ISM non-manufacturing index increased to 56.9 in May (estimated 55.4) from 55.5 in the prior month. Finally, the Federal Reserve released their Beige Book stating that between April through mid-May “almost all districts reported some growth, and a few saw moderate gains in activity”. Nationwide employment continued to improve and the outlook for the coming months was “solidly positive”.
The Euro was bearish against all of its major pairs with the exception of the JPY and the AUD. The Markit eurozone Services PMI advanced to 52.9 in May (52.5 expected) from 52.8 in April and the Composite PMI rose to 51.8 in May (51.6 anticipated) from 51.5 in April. The eurozone PPI fell 0.3% in April after a 0.1% decline in March (+0.2% expected). The UK Services PMI rose to 51 in May from 50.4 in April (55 expected).
The Australian dollar was lower against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JUL 19) was down $1.7 to $51.76. The contract was below its 20D MA (@ $59.4) and below its 50D MA (@ $61.65). The 14d RSI below 30 (22.85) indicates WTI Crude Future (JUL 19) was oversold. The US Department of Energy reported that, for the week ended 31 May, crude oil inventories increased 6771k barrels compared to the previous week.
Gold was up $4.1 to $1329.7. The precious metal was above its 20D MA (@ $1292) and above its 50D MA (@ $1288). The 14d RSI above 70 (72.13) indicates gold was overbought.
Copper Future (JUL 19) on Comex was down 4.4c to 262.5c/lb. The contract was below its 20D MA (@ 270.46c) and below its 50D MA (@ 282.02c). In Europe, the London Metal Exchange reported its copper inventories increased 275 tons to 212050 tons