U.S. indices closed higher on Wednesday after President Donald Trump said a U.S.-China trade deal could arrive sooner than expected. Stocks that led the S&P 500 were in the Consumer Durables & Apparel (+2.21%), Semiconductors & Semiconductor Equipment (+1.65%) and Technology Hardware & Equipment (+1.53%) sectors.
On the economic data front, U.S. new homes sales rose 7.1% MoM to an annualized rate of 713K units in August (vs. 659K units expected), above 700K units for the third time since 2007. On Thursday, we expect weekly jobless claims to edge up to 212K for the week ending September 21 from 208K in the prior week. The final readings of 2Q annualized GDP growth is expected to be unchanged at 2.0% QoQ. Finally, wholesale inventories are expected to rise 0.1% MoM in August.
The S&P 500 (2984.87) trades above both its 20d moving average (2,973.30 – positive slope) and 50d moving average (2,949.63 – flat slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Wednesday. On the economic data front, US MBA Mortgage Applications fell 10.1% for the week ending September 20th compared to a decline of 0.1% the prior week. Monthly US Homes Sales blew past estimates of 659K reaching 713K in August compared to a revised 666K in July, this is the third time US Homes Sales have passed 700K since 2007. On Thursday we expect weekly Jobless claims to rise 4K for the week ending September 21st from the prior 208K reading. US Annualized GDP for 2Q third reading is expected to be in line with the prior reading of 2.0%. Finally US Wholesale Inventories are expected to rise 0.1% for August compared to a 0.2% rise in July.
The Euro was bearish against most of its major pairs with the exception of the NZD and GBP. In Europe, French consumer confidence levels hit their highest since January 2018 at 104 in September from a revised 103 in August.
The Australian dollar was bearish against most of its major pairs with the exception of the GBP.
Commodities
After the close of Wall Street, WTI Crude Future (NOV 19) was down $0.8 to $56.53. The contract was below its 20D MA (@ $56.92) and above its 50D MA (@ $55.94). The US Department of Energy reported that, for the week ended 20 September, crude oil inventories increased 2412k barrels compared to the previous week.
Gold was down $26.9 to $1505. The precious metal was below its 20D MA (@ $1512) and above its 50D MA (@ $1490).
Copper Future (DEC 19) on Comex was about flat to 261.1c/lb. The contract was below its 20D MA (@ 261.14c) and below its 50D MA (@ 262.55c). In Europe, the London Metal Exchange reported its copper inventories decreased 3325 tons to 276825 tons.