General Market Comment
US indices closed lower on Thursday, pressured by shares in the Semiconductors & Semiconductor Equipment (-1.08%), Software & Services (-1.02%) and Diversified Financials (-0.89%) sectors. On the economic data front, personal income increased by 0.5% in October (estimated 0.4%) from 0.2% in September while personal spending advanced by 0.6% in October (forecasted 0.4%) compared to 0.2% a month earlier. In other news, initial jobless claims reached 234k in week ended November 24th (expected 220k) from 224k in the prior week. Continuing claims increased to 1.71M in week ended November 17th (estimated 1.663M) vs. 1.66M the week before. Also, the Bloomberg consumer comfort index decreased to 60.6 in week ended November 25th compared to 61.3 a week earlier. Pending home sales fell by 2.6% MoM in October (forecasted 0.5%) from an increase of 0.7% in September. Finally, the Fed released the meeting minutes of its November 7-8th meeting stating that an appreciation of the dollar may pose a risk for domestic economic growth and inflation and reiterated the need for further gradual increase in the benchmark rate. Finally, the FOMC also discussed the idea of targeting the Overnight Bank Funding Rate instead of the Federal Funds Rate. The S&P 500 (2,737.76) remains above its 20d moving average (2,721.38 – positive slope) but stays below 50d moving average (2,778.45 – negative slope).