US markets rise on good earnings reports
US markets rose for the third day as investor confidence was boosted by good corporate earnings reports. Corporate earnings are expected to increase 6.7 percent from a year earlier. Most companies report better than expected earnings, with 63.2 percent of the 87 companies in the S&P 500 that have published quarterly earnings data by Monday reporting earnings that have beat analyst expectation. Some 130 S&P 500 companies are scheduled to report corporate earnings this week. The S&P 500 gained 17.25 points, or 0.9% to 1,904.01. It is still a few points below its 200-day moving average after falling below that level last Monday. The Dow Jones Industrial Average closed 19.26 points, or 0.1%, higher at 16,399.67. It is down 1.1% since the start of the year. The Nasdaq Composite rose 57.64 points, or 1.4%, to 4,316.07, led by gains in biotech and internet stocks. The gains of major stock indexes would have been higher if IBM hadn’t posted disappointing quarterly results. IBM ’s earnings missed analysts’ expectations, and shares fell 7.1%, the biggest drop among the Dow and the S&P 500 constituents. IBM also said it will sell its global semiconductor technology business to Globalfoundries, paying $1.5 billion in cash to the company over the next three years. Apple climbed 2.1 percent to $99.76 in regular trading. The company reported a better-than-expected 12 percent jump in revenue after the markets closed, and shares rose 0.2 percent in after-hours extended trading. Today at 16:00 CET Existing Home Sales data for September for US will be released, the tentative forecast is positive. Positive data will indicate further strengthening of US economic recovery.
European markets fell on Monday after previous session’s gains. The fall came after German business software maker SAP cut its outlook for full-year operating profit and its stock plunged 5.8 percent, causing a slide in technology shares. The European STOXX 600 Technology index fell 2.4 percent. German DAX declined 1.5 percent, lagging other major European stock indexes. On this backdrop the European Central Bank has started buying covered bonds in an effort to revive the euro zone economy and ward off deflation. The euro zone annual inflation of 0.3 percent in September was far below the ECB target of close to but below 2 percent. The new purchases program starts after ECB program provided four-year loans for banks and its main interest rate was cut to almost zero. Later this year ECB plans to expand the asset purchase program by starting buying bundled loans or asset backed securities.
As statistics released in China showed the world’s second largest economy grew slower than in the second quarter, Asian shares retreated after giving up small gains on Tuesday. China's gross national product expanded 7.3 percent between July and September from a year earlier, slightly above expectations but slower than the 7.5 percent in the second quarter. The lower growth rate makes it unlikely the Chinese economic growth will meet the official annual growth target of 7.5 percent for the first time in 15 years. Analysts expect the growth rate will increase only slightly in the fourth quarter as Chinese authorities have announced they don’t plan any aggressive support measures. The Nikkei dropped 1.2 percent after surging 4 percent on Monday, its biggest rise since June 2013.
Oil fell as increased global supply exceeds the falling demand due to weakening economies. Brent for December settlement declined 76 cents to end the session at $85.40 a barrel on the London-based ICE Futures Europe exchange. The futures dropped to $82.60 on October 16, the lowest level since November 2010. Prices are down 23 percent this year. WTI for November delivery decreased 4 cents to close at $82.71 a barrel on the New York Mercantile Exchange. The more-active December contract slipped 15 cents to close at $81.91. Investors are watching whether Saudi Arabia will cut production to support prices. In its monthly report on October 14 the International Energy Agency said Saudi Arabia, the world’s biggest exporter, has “appeared determined to defend its market share” in Asia, even at the expense of lower prices. Analysts expect the price to settle at a level that will balance the budgets of major producers. Estimates vary, with London-based analyst Robert Burgess in an October 17 report estimating Saudi Arabia’s break-even price is $99.20, others predicting further falls in price.
Spot gold rose as much as 0.3 percent to $1,250.35 an ounce, the highest since September 10, and traded at $1,249.39 at 2:24 p.m. in Singapore. Gold last week posted the first consecutive weekly gain since July as the dollar dropped from a four-year high on speculation slowing global growth may prompt the Federal Reserve to delay raising borrowing costs. Policy makers Federal Reserve are expected to stop bond purchases next week, ending the quantitative easing program. Global economic recovery and stronger dollar put a downward pressure on gold as demand for safe haven asset decreases.
US markets rose for the third day as investor confidence was boosted by good corporate earnings reports. Corporate earnings are expected to increase 6.7 percent from a year earlier. Most companies report better than expected earnings, with 63.2 percent of the 87 companies in the S&P 500 that have published quarterly earnings data by Monday reporting earnings that have beat analyst expectation. Some 130 S&P 500 companies are scheduled to report corporate earnings this week. The S&P 500 gained 17.25 points, or 0.9% to 1,904.01. It is still a few points below its 200-day moving average after falling below that level last Monday. The Dow Jones Industrial Average closed 19.26 points, or 0.1%, higher at 16,399.67. It is down 1.1% since the start of the year. The Nasdaq Composite rose 57.64 points, or 1.4%, to 4,316.07, led by gains in biotech and internet stocks. The gains of major stock indexes would have been higher if IBM hadn’t posted disappointing quarterly results. IBM ’s earnings missed analysts’ expectations, and shares fell 7.1%, the biggest drop among the Dow and the S&P 500 constituents. IBM also said it will sell its global semiconductor technology business to Globalfoundries, paying $1.5 billion in cash to the company over the next three years. Apple climbed 2.1 percent to $99.76 in regular trading. The company reported a better-than-expected 12 percent jump in revenue after the markets closed, and shares rose 0.2 percent in after-hours extended trading. Today at 16:00 CET Existing Home Sales data for September for US will be released, the tentative forecast is positive. Positive data will indicate further strengthening of US economic recovery.
European markets fell on Monday after previous session’s gains. The fall came after German business software maker SAP cut its outlook for full-year operating profit and its stock plunged 5.8 percent, causing a slide in technology shares. The European STOXX 600 Technology index fell 2.4 percent. German DAX declined 1.5 percent, lagging other major European stock indexes. On this backdrop the European Central Bank has started buying covered bonds in an effort to revive the euro zone economy and ward off deflation. The euro zone annual inflation of 0.3 percent in September was far below the ECB target of close to but below 2 percent. The new purchases program starts after ECB program provided four-year loans for banks and its main interest rate was cut to almost zero. Later this year ECB plans to expand the asset purchase program by starting buying bundled loans or asset backed securities.
As statistics released in China showed the world’s second largest economy grew slower than in the second quarter, Asian shares retreated after giving up small gains on Tuesday. China's gross national product expanded 7.3 percent between July and September from a year earlier, slightly above expectations but slower than the 7.5 percent in the second quarter. The lower growth rate makes it unlikely the Chinese economic growth will meet the official annual growth target of 7.5 percent for the first time in 15 years. Analysts expect the growth rate will increase only slightly in the fourth quarter as Chinese authorities have announced they don’t plan any aggressive support measures. The Nikkei dropped 1.2 percent after surging 4 percent on Monday, its biggest rise since June 2013.
Oil fell as increased global supply exceeds the falling demand due to weakening economies. Brent for December settlement declined 76 cents to end the session at $85.40 a barrel on the London-based ICE Futures Europe exchange. The futures dropped to $82.60 on October 16, the lowest level since November 2010. Prices are down 23 percent this year. WTI for November delivery decreased 4 cents to close at $82.71 a barrel on the New York Mercantile Exchange. The more-active December contract slipped 15 cents to close at $81.91. Investors are watching whether Saudi Arabia will cut production to support prices. In its monthly report on October 14 the International Energy Agency said Saudi Arabia, the world’s biggest exporter, has “appeared determined to defend its market share” in Asia, even at the expense of lower prices. Analysts expect the price to settle at a level that will balance the budgets of major producers. Estimates vary, with London-based analyst Robert Burgess in an October 17 report estimating Saudi Arabia’s break-even price is $99.20, others predicting further falls in price.
Spot gold rose as much as 0.3 percent to $1,250.35 an ounce, the highest since September 10, and traded at $1,249.39 at 2:24 p.m. in Singapore. Gold last week posted the first consecutive weekly gain since July as the dollar dropped from a four-year high on speculation slowing global growth may prompt the Federal Reserve to delay raising borrowing costs. Policy makers Federal Reserve are expected to stop bond purchases next week, ending the quantitative easing program. Global economic recovery and stronger dollar put a downward pressure on gold as demand for safe haven asset decreases.
US markets rally on European stimulus plan, Apple report
US markets rallied on Tuesday propelled by better than expected corporate earnings report from Apple Inc and news that the European Central Bank plans to expand its monetary stimulus program. The S&P 500 jumped 37.27 points, or 2% to 1,941.28, its biggest one-day gain in a year. The benchmark index rose for the fourth straight day and moved above 200-day moving average. This may be interpreted as a sign that last week’s pullback is over. The Dow Jones Industrial Average rose 215 points, or 1.3%, to 16,614.81 and turned positive for the year. Nasdaq Composite index jumped 103.4 points, or 2.4% to 4,419.48, led by gains in biotech stocks. It registered its fourth consecutive gain and best one-day advance in more than two years. Sales of new flagship iPhone 6 helped Apple beat analysts’ estimates. Shares of Apple Inc. rose 2.7% to $102.47, after the company reported a 13% rise in profit, aided by strong demand for its new, bigger-screen iPhones. Boeing Co., Simon Property Group Inc. and Xerox Corp. are among U.S. companies reporting earnings today. As media reported the ECB is planning buying corporate bonds to provide more liquidity in an attempt to fight deflationary pressures, investors took it as a good news even though ECB officials didn’t confirm existence of plans for such expansion. Another piece of good news was National Association of Realtors report yesterday that sales of existing homes rose 2.4% in September to a seasonally adjusted annual rate of 5.17 million from 5.05 million in August. The rate increase indicates real estate market is on a recovery track after an unexpected drop in August, but the September pace is still 1.7% down from a year earlier. Today at 13:00 CET Mortgage applications for the week ended October 17 will be released in US. And at 14:30 CET the Consumer Price Index for September will be released. The tentative outlook for the consumer price index is positive.
The euro fell and European stocks rallied on a news report that the ECB may start buying corporate bonds in the secondary market to further stimulate Eurozone economy. The reports had indicated the decision could be made as soon as December and the purchases of corporate debt could start in early 2015. An ECB spokesperson later indicated that the Governing Council “has taken no such decision” about purchasing corporate bonds. The Stoxx Europe 600 index rose 2.1% to close at 323.74, recording gain for the week. Germany’s DAX 30 index added 1.9% to close at 8,886.96, while France’s CAC 40 index climbed 2.3% to 4,081.24. The U.K.’s FTSE 100 index gained 1.7% to close at 6,372.33.
Asian stocks followed the lead of US and European markets. The Nikkei Stock Average gained 1.7% after a 2% fall on Tuesday. The Hong Kong's Hang Seng Index was up 0.6% Wednesday, after the government and student leaders negotiated for the first time Tuesday. Elsewhere, Australia's S&P/ASX 200 was up 0.8% at 5366.40 and Korea's Kospi was up 0.5% at 1925.19.
Oil gained as reports on Chinese economy indicated increased industrial production in the world’s second biggest economy. Brent Crude for December settlement increased 82 cents, or 1 percent, to end the session at $86.22 a barrel on the London-based ICE Futures Europe exchange. Volume was 5.8 percent higher than the 100-day average. The European benchmark closed at a $3.73 premium to Oil WTI for December delivery, up from $3.49 yesterday. Industrial production in China rose 8 percent in September from a year earlier compared with August’s 6.9 percent, according to the National Bureau of Statistics in Beijing. Oil has been falling as major oil producers are increasing production while global demand is falling behind due to slow global economic recovery.
Gold held near the highest price in six weeks as purchases surged ahead of Diwali festival and wedding season. Dhanteras, the biggest gold-buying festival in India, was celebrated yesterday. Diwali, the Indian festival of lights celebrated on October 23, is considered a favorable time for buying gold. Researcher CPM Group estimates the holiday generates about a fifth of India’s annual purchases. Bullion for immediate delivery added as much as 0.3 percent to $1,251.90 an ounce and was at $1,249.06 by 2:47 p.m. in Singapore. Experts estimate after the additional support that Indian buyers are providing during the Dhanteras-Diwali season, gold will likely meet resistance at $1,250 to $1,260 short-term, in part due to Indian government gold tariffs imposed to assist in narrowing their current-account deficit.
US markets rallied on Tuesday propelled by better than expected corporate earnings report from Apple Inc and news that the European Central Bank plans to expand its monetary stimulus program. The S&P 500 jumped 37.27 points, or 2% to 1,941.28, its biggest one-day gain in a year. The benchmark index rose for the fourth straight day and moved above 200-day moving average. This may be interpreted as a sign that last week’s pullback is over. The Dow Jones Industrial Average rose 215 points, or 1.3%, to 16,614.81 and turned positive for the year. Nasdaq Composite index jumped 103.4 points, or 2.4% to 4,419.48, led by gains in biotech stocks. It registered its fourth consecutive gain and best one-day advance in more than two years. Sales of new flagship iPhone 6 helped Apple beat analysts’ estimates. Shares of Apple Inc. rose 2.7% to $102.47, after the company reported a 13% rise in profit, aided by strong demand for its new, bigger-screen iPhones. Boeing Co., Simon Property Group Inc. and Xerox Corp. are among U.S. companies reporting earnings today. As media reported the ECB is planning buying corporate bonds to provide more liquidity in an attempt to fight deflationary pressures, investors took it as a good news even though ECB officials didn’t confirm existence of plans for such expansion. Another piece of good news was National Association of Realtors report yesterday that sales of existing homes rose 2.4% in September to a seasonally adjusted annual rate of 5.17 million from 5.05 million in August. The rate increase indicates real estate market is on a recovery track after an unexpected drop in August, but the September pace is still 1.7% down from a year earlier. Today at 13:00 CET Mortgage applications for the week ended October 17 will be released in US. And at 14:30 CET the Consumer Price Index for September will be released. The tentative outlook for the consumer price index is positive.
The euro fell and European stocks rallied on a news report that the ECB may start buying corporate bonds in the secondary market to further stimulate Eurozone economy. The reports had indicated the decision could be made as soon as December and the purchases of corporate debt could start in early 2015. An ECB spokesperson later indicated that the Governing Council “has taken no such decision” about purchasing corporate bonds. The Stoxx Europe 600 index rose 2.1% to close at 323.74, recording gain for the week. Germany’s DAX 30 index added 1.9% to close at 8,886.96, while France’s CAC 40 index climbed 2.3% to 4,081.24. The U.K.’s FTSE 100 index gained 1.7% to close at 6,372.33.
Asian stocks followed the lead of US and European markets. The Nikkei Stock Average gained 1.7% after a 2% fall on Tuesday. The Hong Kong's Hang Seng Index was up 0.6% Wednesday, after the government and student leaders negotiated for the first time Tuesday. Elsewhere, Australia's S&P/ASX 200 was up 0.8% at 5366.40 and Korea's Kospi was up 0.5% at 1925.19.
Oil gained as reports on Chinese economy indicated increased industrial production in the world’s second biggest economy. Brent Crude for December settlement increased 82 cents, or 1 percent, to end the session at $86.22 a barrel on the London-based ICE Futures Europe exchange. Volume was 5.8 percent higher than the 100-day average. The European benchmark closed at a $3.73 premium to Oil WTI for December delivery, up from $3.49 yesterday. Industrial production in China rose 8 percent in September from a year earlier compared with August’s 6.9 percent, according to the National Bureau of Statistics in Beijing. Oil has been falling as major oil producers are increasing production while global demand is falling behind due to slow global economic recovery.
Gold held near the highest price in six weeks as purchases surged ahead of Diwali festival and wedding season. Dhanteras, the biggest gold-buying festival in India, was celebrated yesterday. Diwali, the Indian festival of lights celebrated on October 23, is considered a favorable time for buying gold. Researcher CPM Group estimates the holiday generates about a fifth of India’s annual purchases. Bullion for immediate delivery added as much as 0.3 percent to $1,251.90 an ounce and was at $1,249.06 by 2:47 p.m. in Singapore. Experts estimate after the additional support that Indian buyers are providing during the Dhanteras-Diwali season, gold will likely meet resistance at $1,250 to $1,260 short-term, in part due to Indian government gold tariffs imposed to assist in narrowing their current-account deficit.
US markets decline
Stock markets in US recorded modest gains in the morning trading session on Wednesdays but retraced later in the trading day. The S&P 500 snapped a four-day winning streak by falling 14.17 points, or 0.7% to 1,927.11. The Dow Jones Industrial Average lost 153.49 points, or 0.9%, to 16,461.32, dragged down by big declines in Boeing Co. The Nasdaq Composite fell 36.63 points, or 0.8% to 4,382.85. Boeing shares fell 4.5% despite beating profit expectations. Yahoo Inc. shares rose 4.5%, after the online search provider posted better-than-expected third-quarter results late Tuesday. Investor nervousness might be explained by news of shots fired at the Canadian Parliament building in Ottawa, and the sole economic news of the day of modest gain in consumer price index in September wasn’t enough to boost investor confidence. The report of US Bureau of Labor Statistics showed US consumer prices rose slightly in September owing to higher costs for food and housing, but inflationary pressures continue to be held in check by falling energy expenses. The increase was in line with expectations. Today a number of economic indicators will be released. At 9:30 CET Markit releases German Manufacturing and Services PMI advance reports for October, the tentative outlooks are positive. At 10:00 CET advance Manufacturing and Services PMIs for EU for October will be released, tentative outlook is positive. At 11:30 Retail Sales will be published in UK, the outlook is positive. At 14:30 Continuing Claims and Initial Jobless Claims for weeks ended October 11 and 18 will be published in US, the tentative forecasts are positive and negative respectively, and at 15:45 CET Markit’s Manufacturing PMI advance report for October will be published.
European markets rose on Wednesday building on the previous day’s momentum after investor confidence was boosted by news reports the European Central Bank is considering buying corporate bonds to further stimulate the Eurozone economy. The trading was uneven and the markets moved briefly into the negative zone in midmorning trading after the Spanish news agency Efe reported that at least 11 banks will fail the ECB’s stress tests. The results of the tests are due on Sunday. The euro fell after the news. Investors’ optimism spurred by news of ECB expansion of monetary stimulus program outweighed the uncertainty about the ECB banks stress tests and markets resumed the advance. France’s CAC 40 index rose 0.6% to 4,105.09. Germany’s DAX 30 index climbed 0.6% to 8,940.14. The U.K.’s FTSE 100 index added 0.4% to end at 6,399.73.
Prospects of additional stimulus programs by the European Central Bank and the steady growth of China’s economy as evidenced by the latest reports of nation’s statistics office buoyed investor optimism in Asia and propelled the stock markets. Nikkei gained 2.4% on Wednesday, recovering from a 2% drop in a previous session, after reports showed the country’s export increased 6.9% from a year earlier in September. Falling yen contributed to this surge, as well as increased shipments of components for Apple’s new smartphone. The Hang Seng Index rose 1.2% Wednesday after the government and leaders of protesters conducted official talks for the first time on Tuesday which didn’t result in an agreement how the city’s chief executive should be elected. Australia’s S&P/ASX 200 and Korea’s Kospi advanced 1.1% each.
After the US Energy Information Administration reported yesterday that crude stockpiles expanded 7.1 million barrels last week, more than expected, West Texas Intermediate for December delivery in electronic trading on the New York Mercantile Exchange dropped $1.97 to $80.52 yesterday, the lowest close for a front-month contract since June 28, 2012. It was at $80.62 a barrel in electronic trading on the New York Mercantile Exchange, up 10 cents, at 2:55 p.m. Singapore time. The volume of all futures traded was about 26 percent above the 100-day average. Prices have decreased 18 percent this year. Brent was steady in London. As oil is getting a downward push due to the expanding production and trailing demand, Libya’s OPEC governor called for output cut. Venezuela earlier had requested a special meeting to discuss measures to boost the price. Saudi Arabia and Kuwait have signaled that the fall in oil prices doesn’t warrant immediate production cuts. OPEC, responsible for about 40 percent of the world’s crude supply, is scheduled to meet on Nov. 27 in Vienna.
Expectations of drier weather in US and rain in Brazil have reversed the recent soybeans upward trend. The improved weather will allow US farmers to accelerate harvesting of a record crop, and rain in Brazil boosts the outlook for production. The contract for November delivery dropped as much as 0.7 percent to $9.56 a bushel on the Chicago Board of Trade and were at $9.6125 by 2:30 p.m. in Singapore. Corn for December delivery fell as much as 0.4 percent to $3.515 a bushel and was at $3.525. Wheat for delivery in December lost 0.3 percent to $5.2075 a bushel.
Stock markets in US recorded modest gains in the morning trading session on Wednesdays but retraced later in the trading day. The S&P 500 snapped a four-day winning streak by falling 14.17 points, or 0.7% to 1,927.11. The Dow Jones Industrial Average lost 153.49 points, or 0.9%, to 16,461.32, dragged down by big declines in Boeing Co. The Nasdaq Composite fell 36.63 points, or 0.8% to 4,382.85. Boeing shares fell 4.5% despite beating profit expectations. Yahoo Inc. shares rose 4.5%, after the online search provider posted better-than-expected third-quarter results late Tuesday. Investor nervousness might be explained by news of shots fired at the Canadian Parliament building in Ottawa, and the sole economic news of the day of modest gain in consumer price index in September wasn’t enough to boost investor confidence. The report of US Bureau of Labor Statistics showed US consumer prices rose slightly in September owing to higher costs for food and housing, but inflationary pressures continue to be held in check by falling energy expenses. The increase was in line with expectations. Today a number of economic indicators will be released. At 9:30 CET Markit releases German Manufacturing and Services PMI advance reports for October, the tentative outlooks are positive. At 10:00 CET advance Manufacturing and Services PMIs for EU for October will be released, tentative outlook is positive. At 11:30 Retail Sales will be published in UK, the outlook is positive. At 14:30 Continuing Claims and Initial Jobless Claims for weeks ended October 11 and 18 will be published in US, the tentative forecasts are positive and negative respectively, and at 15:45 CET Markit’s Manufacturing PMI advance report for October will be published.
European markets rose on Wednesday building on the previous day’s momentum after investor confidence was boosted by news reports the European Central Bank is considering buying corporate bonds to further stimulate the Eurozone economy. The trading was uneven and the markets moved briefly into the negative zone in midmorning trading after the Spanish news agency Efe reported that at least 11 banks will fail the ECB’s stress tests. The results of the tests are due on Sunday. The euro fell after the news. Investors’ optimism spurred by news of ECB expansion of monetary stimulus program outweighed the uncertainty about the ECB banks stress tests and markets resumed the advance. France’s CAC 40 index rose 0.6% to 4,105.09. Germany’s DAX 30 index climbed 0.6% to 8,940.14. The U.K.’s FTSE 100 index added 0.4% to end at 6,399.73.
Prospects of additional stimulus programs by the European Central Bank and the steady growth of China’s economy as evidenced by the latest reports of nation’s statistics office buoyed investor optimism in Asia and propelled the stock markets. Nikkei gained 2.4% on Wednesday, recovering from a 2% drop in a previous session, after reports showed the country’s export increased 6.9% from a year earlier in September. Falling yen contributed to this surge, as well as increased shipments of components for Apple’s new smartphone. The Hang Seng Index rose 1.2% Wednesday after the government and leaders of protesters conducted official talks for the first time on Tuesday which didn’t result in an agreement how the city’s chief executive should be elected. Australia’s S&P/ASX 200 and Korea’s Kospi advanced 1.1% each.
After the US Energy Information Administration reported yesterday that crude stockpiles expanded 7.1 million barrels last week, more than expected, West Texas Intermediate for December delivery in electronic trading on the New York Mercantile Exchange dropped $1.97 to $80.52 yesterday, the lowest close for a front-month contract since June 28, 2012. It was at $80.62 a barrel in electronic trading on the New York Mercantile Exchange, up 10 cents, at 2:55 p.m. Singapore time. The volume of all futures traded was about 26 percent above the 100-day average. Prices have decreased 18 percent this year. Brent was steady in London. As oil is getting a downward push due to the expanding production and trailing demand, Libya’s OPEC governor called for output cut. Venezuela earlier had requested a special meeting to discuss measures to boost the price. Saudi Arabia and Kuwait have signaled that the fall in oil prices doesn’t warrant immediate production cuts. OPEC, responsible for about 40 percent of the world’s crude supply, is scheduled to meet on Nov. 27 in Vienna.
Expectations of drier weather in US and rain in Brazil have reversed the recent soybeans upward trend. The improved weather will allow US farmers to accelerate harvesting of a record crop, and rain in Brazil boosts the outlook for production. The contract for November delivery dropped as much as 0.7 percent to $9.56 a bushel on the Chicago Board of Trade and were at $9.6125 by 2:30 p.m. in Singapore. Corn for December delivery fell as much as 0.4 percent to $3.515 a bushel and was at $3.525. Wheat for delivery in December lost 0.3 percent to $5.2075 a bushel.
S&P 500 hit two-year high
World markets went on rising on Friday. S&P 500 climbed 5.5% during the week, the 2-year high. The macroeconomic data was neutral on Friday. Microsoft good earnings report boosted the stock prices. Its stocks rose 2.5% and Procter & Gamble (+2,3%). Amazon stocks tumbled 8.3%, but it could not drag down the US stock market. However, the activity of market participants was considerably low. The trading volume on US exchanges was 5.3 billion stocks, 35% lower than the October average.
Currently, 205 companies listed in S&P 500 announced their earnings reports. The 69.8% of companies’ earnings outperformed the tentative forecasts. On average such a surplus was observed in only 63% of the companies since 1994. Profit forecasts overshot 59.8%. This is less than the average level since 2002, which is equal to 61% of the companies. Today Pending Home Sales in September are to be released at 14-00 СЕТ in the United States. The outlook is positive. It should be noted that S&P 500 upped 4.7% on the quarter-average since March 2009 to June 2014. This is almost five times higher than the quarterly average increase in GDP (+0.9%) for the same period. The gap in the growth rate of the American GDP and the US stock market is now the largest since 1947. S&P 500 has been rising for 68 consecutive months for the first time since 1938. In our opinion, all that may indicate that US exchanges may slump down again.
European stocks ticked up on Thursday and Friday together with the American ones. Today they are down due to weak performance of the German economy in October, or the so-called Ifo indices. The results of the ECB stress tests also boosted the prices. These tests were failed by 25 European banks. At 14-30 СЕТ we expect the ECB to announce the conditions of covered bonds purchase. There is a possibility that this data may weaken the euro.
Today Nikkei dipped together with other world indices. The Japanese economy recovery is fragile and needs the monetary incentive, as the Prime Minister of Japan Shinzo Abe announced. According to his point of view, another sales tax hike is needed in order to reduce the budget gap. It may occur in April 2017. Tonight Retail Sales in September is to be released at 23-50 СЕТ in Japan. We assume the outlook to be negative.
According to the US Commodity Futures Trading Commission (CFTC), hedge funds increased the number of oil net long positions by 5.7%. It happened regardless of Goldman Sachs report: the average Brent crude price forecast was lowered for the first quarter of next year from $100 per barrel to $85, and WTI – from $90 to $75 per barrel. Thus, in Q2 of 2015 a barrel for both types of oil may go down even $5 more. According to Goldman Sachs, the US demand for imported oil would be reduced as its own shale oil production increases. The states not included in OPEC, and especially Russia will not cut the production output since the country is in need of oil revenues amid the Western economic sanctions. In turn, we accept the possibility of a "technical" upward retracement of the world oil prices. It can be fostered by the recent news from India and Indonesia about a significant increase in demand for petroleum products in 2015. Thus, the diesel fuel consumption in India could increase 2.8% compared to the growth of 1.3% this year. Note that the current drop in oil prices was affected by the fact that OPEC production hit the three-year high, so in September it was 30.47 million barrels per day. At the same time, the US oil production reached the highest level of 9.5 million barrels per day since 1970. Meanwhile, it is hard to say whether the oil production will be increased, so that it would meet the rising demand of South-East Asia amid falling oil prices by 25%.
Dilma Rousseff's victory at the presidential elections in Brazil pushed the world coffee and sugar prices down. Market participants believe that the Real weakening (Brazilian currency), which Dilma Rousseff stands for, can boost the growth of Brazilian exports. Let us remind you that since she has been at the office since 2011, Real to US dollar rate has fallen by about one third. We assume that in the midterm coffee and sugar price fluctuations would mostly depend on weather conditions and crop forecasts, and not on political factors.
World markets went on rising on Friday. S&P 500 climbed 5.5% during the week, the 2-year high. The macroeconomic data was neutral on Friday. Microsoft good earnings report boosted the stock prices. Its stocks rose 2.5% and Procter & Gamble (+2,3%). Amazon stocks tumbled 8.3%, but it could not drag down the US stock market. However, the activity of market participants was considerably low. The trading volume on US exchanges was 5.3 billion stocks, 35% lower than the October average.
Currently, 205 companies listed in S&P 500 announced their earnings reports. The 69.8% of companies’ earnings outperformed the tentative forecasts. On average such a surplus was observed in only 63% of the companies since 1994. Profit forecasts overshot 59.8%. This is less than the average level since 2002, which is equal to 61% of the companies. Today Pending Home Sales in September are to be released at 14-00 СЕТ in the United States. The outlook is positive. It should be noted that S&P 500 upped 4.7% on the quarter-average since March 2009 to June 2014. This is almost five times higher than the quarterly average increase in GDP (+0.9%) for the same period. The gap in the growth rate of the American GDP and the US stock market is now the largest since 1947. S&P 500 has been rising for 68 consecutive months for the first time since 1938. In our opinion, all that may indicate that US exchanges may slump down again.
European stocks ticked up on Thursday and Friday together with the American ones. Today they are down due to weak performance of the German economy in October, or the so-called Ifo indices. The results of the ECB stress tests also boosted the prices. These tests were failed by 25 European banks. At 14-30 СЕТ we expect the ECB to announce the conditions of covered bonds purchase. There is a possibility that this data may weaken the euro.
Today Nikkei dipped together with other world indices. The Japanese economy recovery is fragile and needs the monetary incentive, as the Prime Minister of Japan Shinzo Abe announced. According to his point of view, another sales tax hike is needed in order to reduce the budget gap. It may occur in April 2017. Tonight Retail Sales in September is to be released at 23-50 СЕТ in Japan. We assume the outlook to be negative.
According to the US Commodity Futures Trading Commission (CFTC), hedge funds increased the number of oil net long positions by 5.7%. It happened regardless of Goldman Sachs report: the average Brent crude price forecast was lowered for the first quarter of next year from $100 per barrel to $85, and WTI – from $90 to $75 per barrel. Thus, in Q2 of 2015 a barrel for both types of oil may go down even $5 more. According to Goldman Sachs, the US demand for imported oil would be reduced as its own shale oil production increases. The states not included in OPEC, and especially Russia will not cut the production output since the country is in need of oil revenues amid the Western economic sanctions. In turn, we accept the possibility of a "technical" upward retracement of the world oil prices. It can be fostered by the recent news from India and Indonesia about a significant increase in demand for petroleum products in 2015. Thus, the diesel fuel consumption in India could increase 2.8% compared to the growth of 1.3% this year. Note that the current drop in oil prices was affected by the fact that OPEC production hit the three-year high, so in September it was 30.47 million barrels per day. At the same time, the US oil production reached the highest level of 9.5 million barrels per day since 1970. Meanwhile, it is hard to say whether the oil production will be increased, so that it would meet the rising demand of South-East Asia amid falling oil prices by 25%.
Dilma Rousseff's victory at the presidential elections in Brazil pushed the world coffee and sugar prices down. Market participants believe that the Real weakening (Brazilian currency), which Dilma Rousseff stands for, can boost the growth of Brazilian exports. Let us remind you that since she has been at the office since 2011, Real to US dollar rate has fallen by about one third. We assume that in the midterm coffee and sugar price fluctuations would mostly depend on weather conditions and crop forecasts, and not on political factors.
US markets mixed after last week's rally
After an uneven trading US stock indexes finished Monday session little changed. Investors have adopted a wait and see approach ahead of the Federal Open Market Committee meeting and further corporate earnings reports. The S&P 500 index lost 2.95 points, or 0.2%, to 1961.63. The Dow Jones Industrial Average added 12.53 points, or 0.1%, to 16817.94. The Nasdaq Composite Index gained 2.22, or less than 0.1%, to 4485.93. Investors preferred the safety of defensive stocks over cyclical businesses that tend to be more responsive to changes in the state of overall economy. The gains in defensive stocks - shares of big companies in consumer staples, utilities and telecom that tend to pay dividends and are more stable in business cycles, were offset by big losses in cyclical shares- energy and materials companies that are more dependent on economy. Energy shares were the most actively traded, and their decline pulled the S&P 500 index down. The S&P 500 Energy sector index declined 2% and has dropped 15.4% in the last three months due to sliding oil prices. Shares of Exxon Mobil fell 0.8%. Investors are waiting to see what the Federal Open Market Committee will decide as the US central bank holds a policy meeting today and Wednesday. The Fed is expected to announce the completion of its quantitative easing program. It is widely anticipated that the Federal Reserve will likely reinforce its stated willingness to wait a long time before hiking interest rates after a volatile month in financial markets. Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased. Based on the recent data of weak US inflation, troubled state of European economy and strengthening dollar, it is more likely that the Fed will not indicate plans for early interest rate hikes as the current global growth slowdown and disinflationary pressures negatively affect the US recovery. It should be noted that the Federal Reserve expected the US recovery would continue to strengthen which would allow them to raise interest rates around middle of the next year. Today at 13:30 CET Durable Goods Orders for September will be released in US, the forecast is positive. At 15:00 CET the Conference Board Consumer Confidence Index will be published. The tentative outlook is positive.
European stocks fell on Monday as investors decided to take profit after recent gains and the European Central Bank review of the region's banks. Though the results of the tests were considered positive by traders and fund managers, most euro zone banking stocks declined, pairing big gains made in the run-up to the results of the ECB review. STOXX euro zone bank index fell 2.3 percent, after surging 14 percent since mid-October. Hurting sentiment, the Munich-based Ifo's business climate index, based on a monthly survey of some 7,000 firms, fell to 103.2 from 104.7 the previous month, suggesting deteriorating outlook for Europe's largest economy in the fourth quarter. UK's FTSE 100 index fell 0.4 percent, Germany's DAX index shed 1 percent and France's CAC 40 lost 0.8 percent. Asian shares were modestly higher while the dollar held steady on Tuesday, as investors awaited the outcome of the U.S. Federal Reserve's two-day meeting that begins later in the session for clues to the direction of U.S. interest rates. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose about 0.3 percent. But Japan's Nikkei stock average declined further, shedding 0.8 percent on concerns over corporate earnings after disappointing results from Canon Inc, despite upbeat economic data released before the market open.
In commodities markets, West Texas Intermediate crude oil fell for a third day amid speculation crude inventories increased to near a four-month high in the US, the world’s biggest oil consumer. Brent crude oil fell in London. Brent for December settlement decreased as much as 68 cents, or 0.8 percent, to $85.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude oil traded at a $4.81 premium to WTI.
Wheat rose for a second day on concern that harvests in Australia and Russia may drop because of extreme weather. Soybeans fell from a seven-week high. Wheat for December gained as much as 0.6 percent to $5.2575 a bushel on the Chicago Board of Trade and was at $5.25 at 10:43 a.m. in Singapore.
After an uneven trading US stock indexes finished Monday session little changed. Investors have adopted a wait and see approach ahead of the Federal Open Market Committee meeting and further corporate earnings reports. The S&P 500 index lost 2.95 points, or 0.2%, to 1961.63. The Dow Jones Industrial Average added 12.53 points, or 0.1%, to 16817.94. The Nasdaq Composite Index gained 2.22, or less than 0.1%, to 4485.93. Investors preferred the safety of defensive stocks over cyclical businesses that tend to be more responsive to changes in the state of overall economy. The gains in defensive stocks - shares of big companies in consumer staples, utilities and telecom that tend to pay dividends and are more stable in business cycles, were offset by big losses in cyclical shares- energy and materials companies that are more dependent on economy. Energy shares were the most actively traded, and their decline pulled the S&P 500 index down. The S&P 500 Energy sector index declined 2% and has dropped 15.4% in the last three months due to sliding oil prices. Shares of Exxon Mobil fell 0.8%. Investors are waiting to see what the Federal Open Market Committee will decide as the US central bank holds a policy meeting today and Wednesday. The Fed is expected to announce the completion of its quantitative easing program. It is widely anticipated that the Federal Reserve will likely reinforce its stated willingness to wait a long time before hiking interest rates after a volatile month in financial markets. Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased. Based on the recent data of weak US inflation, troubled state of European economy and strengthening dollar, it is more likely that the Fed will not indicate plans for early interest rate hikes as the current global growth slowdown and disinflationary pressures negatively affect the US recovery. It should be noted that the Federal Reserve expected the US recovery would continue to strengthen which would allow them to raise interest rates around middle of the next year. Today at 13:30 CET Durable Goods Orders for September will be released in US, the forecast is positive. At 15:00 CET the Conference Board Consumer Confidence Index will be published. The tentative outlook is positive.
European stocks fell on Monday as investors decided to take profit after recent gains and the European Central Bank review of the region's banks. Though the results of the tests were considered positive by traders and fund managers, most euro zone banking stocks declined, pairing big gains made in the run-up to the results of the ECB review. STOXX euro zone bank index fell 2.3 percent, after surging 14 percent since mid-October. Hurting sentiment, the Munich-based Ifo's business climate index, based on a monthly survey of some 7,000 firms, fell to 103.2 from 104.7 the previous month, suggesting deteriorating outlook for Europe's largest economy in the fourth quarter. UK's FTSE 100 index fell 0.4 percent, Germany's DAX index shed 1 percent and France's CAC 40 lost 0.8 percent. Asian shares were modestly higher while the dollar held steady on Tuesday, as investors awaited the outcome of the U.S. Federal Reserve's two-day meeting that begins later in the session for clues to the direction of U.S. interest rates. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose about 0.3 percent. But Japan's Nikkei stock average declined further, shedding 0.8 percent on concerns over corporate earnings after disappointing results from Canon Inc, despite upbeat economic data released before the market open.
In commodities markets, West Texas Intermediate crude oil fell for a third day amid speculation crude inventories increased to near a four-month high in the US, the world’s biggest oil consumer. Brent crude oil fell in London. Brent for December settlement decreased as much as 68 cents, or 0.8 percent, to $85.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude oil traded at a $4.81 premium to WTI.
Wheat rose for a second day on concern that harvests in Australia and Russia may drop because of extreme weather. Soybeans fell from a seven-week high. Wheat for December gained as much as 0.6 percent to $5.2575 a bushel on the Chicago Board of Trade and was at $5.25 at 10:43 a.m. in Singapore.
Markets rally ahead of FOMC meeting
US markets rose sharply on Tuesday ahead of the Federal Reserve’s two day policy meeting statement on Wednesday. The S&P 500 added 23.42 points, or 1.2%, to 1,985.05. Broad-based gains were led by the energy and industrials sectors, which recovered some of the steep losses from Monday. The Nasdaq Composite rose 78.36 points, or 1.8%, to 4,564.29. The Dow Jones Industrial Average jumped 187.8 points, or 1.1%, to 17,005.75, closing above the 17,000 level for the first time since October 3. Investors are clearly expecting that the Fed will not adopt a hawkish stance on tightening the monetary policy and will likely reinforce its stated willingness to wait longer before raising interest rates. In its previous statement the Fed had indicated the rates will remain low for a “considerable time”, and the market consensus was the rates would not be hiked before mid 2015. The Fed forecasts have estimated the US economy will grow around 3 percent this year with inflation rising gradually to Fed’s target level of 2 percent. But slower than expected global growth presents a challenge for US economic recovery, as indicated by recent economic data. As Commerce Department reported yesterday, the demand for US made capital goods excluding aircraft fell 1.7 % in September against an expected increase of 0.6%, second month in row. It is the biggest drop in eight months. A second report indicated US home prices grew by less than forecast in August, according to S&P/Case-Shiller’s 20-city composite index. A third report by Conference Board said the index of consumer attitudes increased to 94.5 in October, the highest reading in seven years. Investors clearly discounted poor economic reports by focusing on improved consumer optimism and confidence in the short-term outlook for the economy. The weak capital goods orders and house price data indicate a slowdown in activity, further indication of unsteady US recovery. As a result of slower than expected global growth and slower US recovery investors have recently pushed their expectation for an initial interest rate hike back to next year, although some top Fed officials recently said they think the US Central Bank is still on track to bump up borrowing costs in mid 2015. Investors will be reading closely the statement the Fed will issue at 19:00 CET to see whether it continues to refer to “significant” slack in the US labor market and whether it retains language indicating rates will remain low for a “considerable time” as widely expected.
uropean stocks rebounded on Tuesday after yesterday’s losses as better-than-expected results from a number of blue-chips including pharmaceutical group Novartis and bank UBS helped lift sentiment. The German DAX rose 1.9 percent. The gains of French CAC and Britain's FTSE indexes were more modest at 0.4 percent and 0.6 percent respectively as a result of steep falls in French pharmaceutical Sanofi and UK-listed Standard Chartered Bank after they reported results that missed expectations. Stronger corporate reports have propped investor optimism after the market hit a low for 2014 just under two weeks ago. Asian shares advanced to one-month highs on Wednesday, helped by US market rally. Japanese stocks rose after better-than-expected industrial production data and upbeat earnings figures bouyed investor sentiment. Industrial production rose by 2.7 percent in September, the trade Ministry reported, the fastest pace since January. The Nikkei share average jumped 1.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent, led by a 1.2 percent rise in South Korean shares.
West Texas Intermediate crude rose as supply and recent economic data gave rise to speculation that fuel demand will increase in the US, the world’s biggest oil consumer. US crude stockpiles dropped by 3.7 million barrels, the American Petroleum Institute reported yesterday. And the data from the Conference Board showed consumer confidence in US advanced to a seven-year high in October, providing indication of better US economic outlook. WTI for December delivery rose as much as 41 cents to $81.83 a barrel in electronic trading on the New York Mercantile Exchange and was at $81.71 at 1:07 pm Seoul time. Brent Oil for December settlement gained as much as 35 cents, or 0.4 percent, to $86.38 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.60 to WTI, compared with $4.61 yesterday.
Gold traded above a two-week low as investors assessed the health of the US economy before the Federal Reserve concludes a policy meeting. Gold for immediate delivery dropped to $1,222.62 an ounce yesterday, the lowest price since October 15, before rebounding as US data showed durable goods orders unexpectedly declined. It traded at $1,230.01 an ounce by 12:16 pm in Singapore from $1,228.52 yesterday. Russia joined Turkey in adding bullion to reserves according to the International Monetary Fund data. Silver for immediate delivery traded at $17.235 an ounce from $17.214. Spot platinum rose 0.2 percent to $1,269.75 an ounce from $1,266.75. Palladium was little changed at $793.93 an ounce after a four-day increase.
US markets rose sharply on Tuesday ahead of the Federal Reserve’s two day policy meeting statement on Wednesday. The S&P 500 added 23.42 points, or 1.2%, to 1,985.05. Broad-based gains were led by the energy and industrials sectors, which recovered some of the steep losses from Monday. The Nasdaq Composite rose 78.36 points, or 1.8%, to 4,564.29. The Dow Jones Industrial Average jumped 187.8 points, or 1.1%, to 17,005.75, closing above the 17,000 level for the first time since October 3. Investors are clearly expecting that the Fed will not adopt a hawkish stance on tightening the monetary policy and will likely reinforce its stated willingness to wait longer before raising interest rates. In its previous statement the Fed had indicated the rates will remain low for a “considerable time”, and the market consensus was the rates would not be hiked before mid 2015. The Fed forecasts have estimated the US economy will grow around 3 percent this year with inflation rising gradually to Fed’s target level of 2 percent. But slower than expected global growth presents a challenge for US economic recovery, as indicated by recent economic data. As Commerce Department reported yesterday, the demand for US made capital goods excluding aircraft fell 1.7 % in September against an expected increase of 0.6%, second month in row. It is the biggest drop in eight months. A second report indicated US home prices grew by less than forecast in August, according to S&P/Case-Shiller’s 20-city composite index. A third report by Conference Board said the index of consumer attitudes increased to 94.5 in October, the highest reading in seven years. Investors clearly discounted poor economic reports by focusing on improved consumer optimism and confidence in the short-term outlook for the economy. The weak capital goods orders and house price data indicate a slowdown in activity, further indication of unsteady US recovery. As a result of slower than expected global growth and slower US recovery investors have recently pushed their expectation for an initial interest rate hike back to next year, although some top Fed officials recently said they think the US Central Bank is still on track to bump up borrowing costs in mid 2015. Investors will be reading closely the statement the Fed will issue at 19:00 CET to see whether it continues to refer to “significant” slack in the US labor market and whether it retains language indicating rates will remain low for a “considerable time” as widely expected.
uropean stocks rebounded on Tuesday after yesterday’s losses as better-than-expected results from a number of blue-chips including pharmaceutical group Novartis and bank UBS helped lift sentiment. The German DAX rose 1.9 percent. The gains of French CAC and Britain's FTSE indexes were more modest at 0.4 percent and 0.6 percent respectively as a result of steep falls in French pharmaceutical Sanofi and UK-listed Standard Chartered Bank after they reported results that missed expectations. Stronger corporate reports have propped investor optimism after the market hit a low for 2014 just under two weeks ago. Asian shares advanced to one-month highs on Wednesday, helped by US market rally. Japanese stocks rose after better-than-expected industrial production data and upbeat earnings figures bouyed investor sentiment. Industrial production rose by 2.7 percent in September, the trade Ministry reported, the fastest pace since January. The Nikkei share average jumped 1.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent, led by a 1.2 percent rise in South Korean shares.
West Texas Intermediate crude rose as supply and recent economic data gave rise to speculation that fuel demand will increase in the US, the world’s biggest oil consumer. US crude stockpiles dropped by 3.7 million barrels, the American Petroleum Institute reported yesterday. And the data from the Conference Board showed consumer confidence in US advanced to a seven-year high in October, providing indication of better US economic outlook. WTI for December delivery rose as much as 41 cents to $81.83 a barrel in electronic trading on the New York Mercantile Exchange and was at $81.71 at 1:07 pm Seoul time. Brent Oil for December settlement gained as much as 35 cents, or 0.4 percent, to $86.38 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.60 to WTI, compared with $4.61 yesterday.
Gold traded above a two-week low as investors assessed the health of the US economy before the Federal Reserve concludes a policy meeting. Gold for immediate delivery dropped to $1,222.62 an ounce yesterday, the lowest price since October 15, before rebounding as US data showed durable goods orders unexpectedly declined. It traded at $1,230.01 an ounce by 12:16 pm in Singapore from $1,228.52 yesterday. Russia joined Turkey in adding bullion to reserves according to the International Monetary Fund data. Silver for immediate delivery traded at $17.235 an ounce from $17.214. Spot platinum rose 0.2 percent to $1,269.75 an ounce from $1,266.75. Palladium was little changed at $793.93 an ounce after a four-day increase.
US markets close lower after Fed decision
The US markets slipped on Wednesday after the Fed statement confirmed the expected completion of the bond buying stimulus program and added language that ties the timing and pace of any future rate hike to incoming economic data. The S&P 500 closed 2.75 points, or 0.1%, lower at 1,982.30. The Nasdaq Composite Index, which was already under pressure from Internet stocks lost 15 points, or 0.3%, to 4,549.23. Meanwhile, the Dow industrials dipped 31.44 points, or 0.2%, at 16,974. While the end of Quantitative Easing was widely anticipated, investors were surprised with the Fed’s upbeat view on the labor market. The Fed’s view implies the U.S. economy is on firm footing but the markets had hoped for more signs that a low-rate policy would be maintained for an extended period. The Fed characterized the labor market conditions by stating that the range of labor market indicators suggests the underutilization of labor resources is gradually diminishing. This is an important departure from previous statement in which it had described the US labor market slack as “significant”. Conditioning the future rate hikes on US economy performance the Fed nevertheless reconfirmed that interest rates would remain low for a "considerable time" following the end of the bond purchases this month. Together with an assessment of improved labor market conditions the statement explicitly stated for the first time the Fed could raise interest rates sooner than markets have forecast, if the economy grows faster than the bank projects. Fed officials didn’t refer to recent financial turmoil or global economy weakness and the risks they pose to US economic growth, instead they repeated language from September that the likelihood of inflation running persistently below 2 percent has diminished somewhat. The statement expressed confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy. The investors were clearly expecting a more dovish assessment, and were particularly surprised by the Fed’s statement of possible sooner rate hikes than currently anticipated “if incoming information indicates faster progress toward the committee's employment and inflation objective than the committee now expects”. Fed's Head Janet Yellen speaks in Washington today at 14:00 CET. And new economic data are coming out today in US: at 13:30 CET the third quarter US Gross Domestic Product estimates, the Core Personal Consumption Expenditure (QoQ) for the third quarter, Continuing Claims for the week ended October 18 and Initial Jobless Claims for the week ended October 25 will be released.
European stocks advanced on Wednesday ahead of the statement from the US Federal Open Market Committee. France’s CAC 40 index rose 0.2% to 4,120.37. Germany’s DAX 30 index gained 0.5% to 9,111.09. The U.K.’s FTSE 100 index picked up 0.8% to 6,455.85. The Stoxx Europe 600 index added 0.3% to 329.36, on track for its highest closing level in three weeks. No major economic data were expected to be released during the day and markets anticipated the FOMC statement to announce the end of the quantitative easing program and issue a dovish guidance on interest rates. Stocks in Asia rose Wednesday ahead of a U.S. Federal Reserve announcement on quantitative easing and after a rally on Wall Street on Tuesday. The Nikkei gained 1.5% to 15,553.91, helped by a stronger dollar and earnings from heavyweights such as Nomura Holdings and Hitachi Construction Machinery. On Thursday morning stocks in Japan rose as the Federal Reserve’s statement that the U.S. labor market was improving and interest rates would remain low for a "considerable time" boosted investor optimism about US economy. The Nikkei benchmark rose 0.7 percent to 15,665.24 points by mid-morning, the highest since October 9.
West Texas Intermediate Crude Oil fell from a one-week high after data from Energy Information Administration, the Energy Department’s statistical arm, showed crude stockpiles rose as output surged to a record high in the US, the world’s biggest oil consumer. WTI for December delivery dropped as much as 45 cents to $81.75 a barrel in electronic trading on the New York Mercantile Exchange, and was at $81.84 at 4:40 p.m. Seoul time. Brent Oil for December settlement declined as much as 32 cents, or 0.4 percent, to $86.80 a barrel on the London-based ICE Futures Europe exchange. The contract rose 1.3 percent yesterday.
Gold tumbled as markets priced in the reduced expectation of inflation after the Federal Reserve ended its bond purchasing program. Gold for immediate delivery dropped 1.4 percent to $1,211.68 an ounce at 3:49 pm New York time, heading for the biggest drop since October 3. Prices touched $1,208.50, the lowest since October 8. Goldman Sachs Group Inc. predicts gold prices will drop to $1,050 over the next 12 months as the US economy accelerates. Silver futures for delivery in December added 0.2 percent to $17.264 an ounce on the Comex. On the New York Mercantile Exchange, palladium futures for delivery in December advanced 0.9 percent to $800.70 an ounce. Prices rose for a ninth straight sessions, the longest rally since August 18. Platinum futures for January delivery gained 0.2 percent to $1,269.20 an ounce.
The US markets slipped on Wednesday after the Fed statement confirmed the expected completion of the bond buying stimulus program and added language that ties the timing and pace of any future rate hike to incoming economic data. The S&P 500 closed 2.75 points, or 0.1%, lower at 1,982.30. The Nasdaq Composite Index, which was already under pressure from Internet stocks lost 15 points, or 0.3%, to 4,549.23. Meanwhile, the Dow industrials dipped 31.44 points, or 0.2%, at 16,974. While the end of Quantitative Easing was widely anticipated, investors were surprised with the Fed’s upbeat view on the labor market. The Fed’s view implies the U.S. economy is on firm footing but the markets had hoped for more signs that a low-rate policy would be maintained for an extended period. The Fed characterized the labor market conditions by stating that the range of labor market indicators suggests the underutilization of labor resources is gradually diminishing. This is an important departure from previous statement in which it had described the US labor market slack as “significant”. Conditioning the future rate hikes on US economy performance the Fed nevertheless reconfirmed that interest rates would remain low for a "considerable time" following the end of the bond purchases this month. Together with an assessment of improved labor market conditions the statement explicitly stated for the first time the Fed could raise interest rates sooner than markets have forecast, if the economy grows faster than the bank projects. Fed officials didn’t refer to recent financial turmoil or global economy weakness and the risks they pose to US economic growth, instead they repeated language from September that the likelihood of inflation running persistently below 2 percent has diminished somewhat. The statement expressed confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy. The investors were clearly expecting a more dovish assessment, and were particularly surprised by the Fed’s statement of possible sooner rate hikes than currently anticipated “if incoming information indicates faster progress toward the committee's employment and inflation objective than the committee now expects”. Fed's Head Janet Yellen speaks in Washington today at 14:00 CET. And new economic data are coming out today in US: at 13:30 CET the third quarter US Gross Domestic Product estimates, the Core Personal Consumption Expenditure (QoQ) for the third quarter, Continuing Claims for the week ended October 18 and Initial Jobless Claims for the week ended October 25 will be released.
European stocks advanced on Wednesday ahead of the statement from the US Federal Open Market Committee. France’s CAC 40 index rose 0.2% to 4,120.37. Germany’s DAX 30 index gained 0.5% to 9,111.09. The U.K.’s FTSE 100 index picked up 0.8% to 6,455.85. The Stoxx Europe 600 index added 0.3% to 329.36, on track for its highest closing level in three weeks. No major economic data were expected to be released during the day and markets anticipated the FOMC statement to announce the end of the quantitative easing program and issue a dovish guidance on interest rates. Stocks in Asia rose Wednesday ahead of a U.S. Federal Reserve announcement on quantitative easing and after a rally on Wall Street on Tuesday. The Nikkei gained 1.5% to 15,553.91, helped by a stronger dollar and earnings from heavyweights such as Nomura Holdings and Hitachi Construction Machinery. On Thursday morning stocks in Japan rose as the Federal Reserve’s statement that the U.S. labor market was improving and interest rates would remain low for a "considerable time" boosted investor optimism about US economy. The Nikkei benchmark rose 0.7 percent to 15,665.24 points by mid-morning, the highest since October 9.
West Texas Intermediate Crude Oil fell from a one-week high after data from Energy Information Administration, the Energy Department’s statistical arm, showed crude stockpiles rose as output surged to a record high in the US, the world’s biggest oil consumer. WTI for December delivery dropped as much as 45 cents to $81.75 a barrel in electronic trading on the New York Mercantile Exchange, and was at $81.84 at 4:40 p.m. Seoul time. Brent Oil for December settlement declined as much as 32 cents, or 0.4 percent, to $86.80 a barrel on the London-based ICE Futures Europe exchange. The contract rose 1.3 percent yesterday.
Gold tumbled as markets priced in the reduced expectation of inflation after the Federal Reserve ended its bond purchasing program. Gold for immediate delivery dropped 1.4 percent to $1,211.68 an ounce at 3:49 pm New York time, heading for the biggest drop since October 3. Prices touched $1,208.50, the lowest since October 8. Goldman Sachs Group Inc. predicts gold prices will drop to $1,050 over the next 12 months as the US economy accelerates. Silver futures for delivery in December added 0.2 percent to $17.264 an ounce on the Comex. On the New York Mercantile Exchange, palladium futures for delivery in December advanced 0.9 percent to $800.70 an ounce. Prices rose for a ninth straight sessions, the longest rally since August 18. Platinum futures for January delivery gained 0.2 percent to $1,269.20 an ounce.
Global markets still rising on Friday
World stock markets went on rising on Friday. From its local low of October 15, S&P500 climbed 8.4%, the biggest two-week rise since December 2011. As expected, the US economic data was quite ambiguous on Friday. Personal Income and Spending indicator fell, while Chicago PMI and Michigan Consumer Sentiment Index upped.
We assume that the overall price growth on US exchanges could be caused by good quarter reports of such large companies, as Exxon Mobil (stocks rose 2.4%) and Chevron (+2,3%). The trading volume on Friday was 7% above the monthly average and amounted to 8.3 billion stocks. About 70% of the US companies have announced their earnings reports so far. In general, their profits outperform tentative forecasts. Due to this data, S&P 500 and Dow Jones Industrial hit historical highs last week. The US dollar index has also grown considerably. In our opinion, the US dollar consolidation would cut the financial performance of corporations. There is still a possibility that the dollar and the US stock indices would move in opposite directions, so we plan to create a PCI for the practical use of such assumptions. Today at 14-45 СЕТ Markit’s Manufacturing PMI for October is to be released in the US. At 15-00 СЕТ ISM Manufacturing in October and Construction Spending in September will be announced. Besides, the two regional Fed officials will be giving their speeches. In general, we believe that tentative forecasts are slightly negative, and both indices are not that important, so that market participants would continue active stock purchasing at historical highs.
FTSEurofirst 300 stock index had the fastest growth last week since December 2013, adding 3%. There was no significant macroeconomic data released, the ECB officials have not declared anything substantial. The prices were rising in line with the global trend. Note that the Bank of England increased the leverage ratio for Scottish banks. Barclays bank stock price ticked up 8%, Royal Bank of Scotland – 7%. European stocks are slipping slightly today. The earnings reports look weaker than those in the US: 67% of European companies have announced their reports. The performance of 58% of the companies matched or exceeded the outlook. There are 75.8% of such companies in the US. The members of the ECB Governing Council are expected to give speeches at 12-00 and 14-00 СЕТ.
Nikkei jumped greatly on Friday. More information about that is available in the previous overview. Today the majority of Japanese financial institutions are closed for the national holiday – Culture Day.
Commodity futures prices plunged as quite negative macroeconomic data was released in China. The reduced Manufacturing PMI in October outperformed forecasts (51.2), while in fact it was 50.8 points. Note that when the index rises above 50, a general tendency of the economic growth is maintained.
Grain futures are dipping after the rally in October. Thus, corn prices rose 18% last month, the highest level since July 2012. Apart from the economic slowdown in China, the grain futures plunge was caused by the forecasts indicating warm weather in the US, and also the crop growth forecast by the International Grains Council (IGC). There was being gathered only 46% of the US grain crop by the end of October: it is significantly less than the 5-year average of 65%. According to IGC, the global corn crop of this year would amount to 979.7 million tons, and wheat - 717.6 million tons. Compared to the previous forecast, the corn crop has been increased by 6 million tons, and wheat – by 1 million tons. However, note that according to the weekly data of CFTC, hedge funds raised corn net long positions and reduced net short positions on wheat and soybeans. Cocoa and coffee net long positions were also reduced.
World stock markets went on rising on Friday. From its local low of October 15, S&P500 climbed 8.4%, the biggest two-week rise since December 2011. As expected, the US economic data was quite ambiguous on Friday. Personal Income and Spending indicator fell, while Chicago PMI and Michigan Consumer Sentiment Index upped.
We assume that the overall price growth on US exchanges could be caused by good quarter reports of such large companies, as Exxon Mobil (stocks rose 2.4%) and Chevron (+2,3%). The trading volume on Friday was 7% above the monthly average and amounted to 8.3 billion stocks. About 70% of the US companies have announced their earnings reports so far. In general, their profits outperform tentative forecasts. Due to this data, S&P 500 and Dow Jones Industrial hit historical highs last week. The US dollar index has also grown considerably. In our opinion, the US dollar consolidation would cut the financial performance of corporations. There is still a possibility that the dollar and the US stock indices would move in opposite directions, so we plan to create a PCI for the practical use of such assumptions. Today at 14-45 СЕТ Markit’s Manufacturing PMI for October is to be released in the US. At 15-00 СЕТ ISM Manufacturing in October and Construction Spending in September will be announced. Besides, the two regional Fed officials will be giving their speeches. In general, we believe that tentative forecasts are slightly negative, and both indices are not that important, so that market participants would continue active stock purchasing at historical highs.
FTSEurofirst 300 stock index had the fastest growth last week since December 2013, adding 3%. There was no significant macroeconomic data released, the ECB officials have not declared anything substantial. The prices were rising in line with the global trend. Note that the Bank of England increased the leverage ratio for Scottish banks. Barclays bank stock price ticked up 8%, Royal Bank of Scotland – 7%. European stocks are slipping slightly today. The earnings reports look weaker than those in the US: 67% of European companies have announced their reports. The performance of 58% of the companies matched or exceeded the outlook. There are 75.8% of such companies in the US. The members of the ECB Governing Council are expected to give speeches at 12-00 and 14-00 СЕТ.
Nikkei jumped greatly on Friday. More information about that is available in the previous overview. Today the majority of Japanese financial institutions are closed for the national holiday – Culture Day.
Commodity futures prices plunged as quite negative macroeconomic data was released in China. The reduced Manufacturing PMI in October outperformed forecasts (51.2), while in fact it was 50.8 points. Note that when the index rises above 50, a general tendency of the economic growth is maintained.
Grain futures are dipping after the rally in October. Thus, corn prices rose 18% last month, the highest level since July 2012. Apart from the economic slowdown in China, the grain futures plunge was caused by the forecasts indicating warm weather in the US, and also the crop growth forecast by the International Grains Council (IGC). There was being gathered only 46% of the US grain crop by the end of October: it is significantly less than the 5-year average of 65%. According to IGC, the global corn crop of this year would amount to 979.7 million tons, and wheat - 717.6 million tons. Compared to the previous forecast, the corn crop has been increased by 6 million tons, and wheat – by 1 million tons. However, note that according to the weekly data of CFTC, hedge funds raised corn net long positions and reduced net short positions on wheat and soybeans. Cocoa and coffee net long positions were also reduced.
Markets end Monday's session lower on weak economic data
The US markets ended Monday’s session marginally lower. The stock indexes were dragged down by falling energy stocks. Investors are getting rid of energy and materials sector stocks on the backdrop of falling oil prices. The S&P 500 hit an intraday record at 2,024.54, but finished the day marginally lower at 2,017.81 with the S&P 500 energy sub sector losing 1.7%. The Dow Jones Industrial Average hit an intraday record of 17, 398.54, but ended lower, losing 24.28 points, or 0.1%, and closed at 17,366.24. Meanwhile, the Nasdaq Composite defied the general trend and finished up 8.17 points, or 0.2%, to 4,638. US economic data released on Monday were mixed and failed to boost investor sentiment. The Institute for Supply Management manufacturing survey index rose in October, but the final PMI index and construction spending fell. The ISM survey results showed the October manufacturing index jumped to 59% from a reading of 56.6% in September. At the same time the final reading of Markit’s US manufacturing purchasing managers index dropped to 55.9 in October from an advance reading of 56.2 and a September level of 57.9. The data on construction spending were also disappointing as they indicated a 0.4% fall in September against a forecasts for a 0.7% increase. Manufacturing data from Europe and China were also disappointing. At the same time, experts are optimistic about US stock market prospects, pointing to healthy earnings growth and the decision by the Japanese Government Pension Investment Fund to increase its holdings of foreign stocks to 25% of its monetary base (from roughly 16% currently). The reports of nearly 375 S&P 500 companies indicate earnings are growing at a nearly 10% pace, and revenue is up 4% to 5%, beating expectations. Furthermore, experts estimate the Japanese Government Pension Investment Fund will allocate about $60 billion for new purchases of non-Japanese stocks and that half could be invested in US stocks by the end of 2015 expansion, which would benefit US equity markets next year. A couple of economic reports are due today. Today at 14:30 CET US Trade Balance and Factory orders for September will come out. The tentative forecast is slightly negative, with the negative Trade Balance widening to an expected -$40.2 billion from -$40.1 billion in the previous month. The Factory Orders are expected to fall by 0.6% against a 10.1 % reduction in the previous month.
European stocks fell from a four-week high on disappointing euro zone and US economic data. Investors were disappointed by the results of Markit’s PMI survey for euro zone which indicated manufacturing activity in the euro zone grew slightly more slowly than thought last month and Germany recorded only marginal expansion while France and Italy contracted. The FTSEurofirst 300 index of top European shares ended 0.86 percent lower at 1,340.38 points after rising to as much as 1,355.16, the highest since early October. As experts note, the weak economic data increase the probability that the European Central Bank will take more aggressive measures to support the Eurozone economy. Stocks in Asia were mixed on Monday following the report on Saturday that China’s official manufacturing gauge came in at a five-month low of 50.8 for October. Markets in Australia and Hong Kong fell slightly while Shanghai gained. Tokyo was closed for a holiday.
Oil prices fell on Monday on weak global demand, stronger dollar and fears Saudi Arabia could announce another price cut after last month it slashed prices. December Brent crude oil, which is widely seen as the global oil benchmark, fell $1.58 to $84.28 a barrel on London’s ICE Futures exchange. Oil extended an early decline after the reported increase of Institute for Supply Management’s US October manufacturing index pushed the US dollar index up 0.5%. Stronger dollar added further pressure on oil after data over the weekend showed China’s official manufacturing PMI dropped to a five-month low of 50.8 in October from 51.1 in September, indicating China’s economy is slowing down. China is the world’s second-largest oil consumer, and sagging oil demand, due to its slowing economy, has been partly responsible for the slump in global oil prices. And today Saudi Arabian Oil Co., known as Saudi Aramco, lowered the cost of its crude to the US. Aramco increased the cost to Asia and Europe. The price cut for US importers means the largest OPEC producer wants to preserve market share in US, which was falling recently due to expanding domestic production which has increased 54 percent in the past three years.
After slumping 2.3% to finish at $1,171.60 an ounce last week, gold fell again on Monday. Gold for December delivery lost $1.80 to $1,169.80 an ounce. Rising dollar, helped by improving US economy and surprise announcement of the Bank of Japan on Friday about expanding its quantitative easing program, makes commodities more expensive. With no increase in global economic uncertainty the demand for gold and other safe haven assets has been declining recently. Elsewhere in metals trading, January platinum closed up $4.80, or 0.4% to $1,240 an ounce, while December palladium rose $11.45, or 1.45.%, to $803.25 an ounce.
The US markets ended Monday’s session marginally lower. The stock indexes were dragged down by falling energy stocks. Investors are getting rid of energy and materials sector stocks on the backdrop of falling oil prices. The S&P 500 hit an intraday record at 2,024.54, but finished the day marginally lower at 2,017.81 with the S&P 500 energy sub sector losing 1.7%. The Dow Jones Industrial Average hit an intraday record of 17, 398.54, but ended lower, losing 24.28 points, or 0.1%, and closed at 17,366.24. Meanwhile, the Nasdaq Composite defied the general trend and finished up 8.17 points, or 0.2%, to 4,638. US economic data released on Monday were mixed and failed to boost investor sentiment. The Institute for Supply Management manufacturing survey index rose in October, but the final PMI index and construction spending fell. The ISM survey results showed the October manufacturing index jumped to 59% from a reading of 56.6% in September. At the same time the final reading of Markit’s US manufacturing purchasing managers index dropped to 55.9 in October from an advance reading of 56.2 and a September level of 57.9. The data on construction spending were also disappointing as they indicated a 0.4% fall in September against a forecasts for a 0.7% increase. Manufacturing data from Europe and China were also disappointing. At the same time, experts are optimistic about US stock market prospects, pointing to healthy earnings growth and the decision by the Japanese Government Pension Investment Fund to increase its holdings of foreign stocks to 25% of its monetary base (from roughly 16% currently). The reports of nearly 375 S&P 500 companies indicate earnings are growing at a nearly 10% pace, and revenue is up 4% to 5%, beating expectations. Furthermore, experts estimate the Japanese Government Pension Investment Fund will allocate about $60 billion for new purchases of non-Japanese stocks and that half could be invested in US stocks by the end of 2015 expansion, which would benefit US equity markets next year. A couple of economic reports are due today. Today at 14:30 CET US Trade Balance and Factory orders for September will come out. The tentative forecast is slightly negative, with the negative Trade Balance widening to an expected -$40.2 billion from -$40.1 billion in the previous month. The Factory Orders are expected to fall by 0.6% against a 10.1 % reduction in the previous month.
European stocks fell from a four-week high on disappointing euro zone and US economic data. Investors were disappointed by the results of Markit’s PMI survey for euro zone which indicated manufacturing activity in the euro zone grew slightly more slowly than thought last month and Germany recorded only marginal expansion while France and Italy contracted. The FTSEurofirst 300 index of top European shares ended 0.86 percent lower at 1,340.38 points after rising to as much as 1,355.16, the highest since early October. As experts note, the weak economic data increase the probability that the European Central Bank will take more aggressive measures to support the Eurozone economy. Stocks in Asia were mixed on Monday following the report on Saturday that China’s official manufacturing gauge came in at a five-month low of 50.8 for October. Markets in Australia and Hong Kong fell slightly while Shanghai gained. Tokyo was closed for a holiday.
Oil prices fell on Monday on weak global demand, stronger dollar and fears Saudi Arabia could announce another price cut after last month it slashed prices. December Brent crude oil, which is widely seen as the global oil benchmark, fell $1.58 to $84.28 a barrel on London’s ICE Futures exchange. Oil extended an early decline after the reported increase of Institute for Supply Management’s US October manufacturing index pushed the US dollar index up 0.5%. Stronger dollar added further pressure on oil after data over the weekend showed China’s official manufacturing PMI dropped to a five-month low of 50.8 in October from 51.1 in September, indicating China’s economy is slowing down. China is the world’s second-largest oil consumer, and sagging oil demand, due to its slowing economy, has been partly responsible for the slump in global oil prices. And today Saudi Arabian Oil Co., known as Saudi Aramco, lowered the cost of its crude to the US. Aramco increased the cost to Asia and Europe. The price cut for US importers means the largest OPEC producer wants to preserve market share in US, which was falling recently due to expanding domestic production which has increased 54 percent in the past three years.
After slumping 2.3% to finish at $1,171.60 an ounce last week, gold fell again on Monday. Gold for December delivery lost $1.80 to $1,169.80 an ounce. Rising dollar, helped by improving US economy and surprise announcement of the Bank of Japan on Friday about expanding its quantitative easing program, makes commodities more expensive. With no increase in global economic uncertainty the demand for gold and other safe haven assets has been declining recently. Elsewhere in metals trading, January platinum closed up $4.80, or 0.4% to $1,240 an ounce, while December palladium rose $11.45, or 1.45.%, to $803.25 an ounce.
US and European markets decline
US stocks declined on Tuesday as the sell-off of energy shares dragged the S&P500 index lower. Investor sentiment was not helped by the news that the European Commission cut its forecast for growth of domestic product for the 18-country euro zone to 0.8% in 2014, from a previous forecast of 1.2%, in the spring. The downward revision of euro zone economic growth rate is the latest indication of slowing global growth after recent data on Chinese Purchasing Managers' Index showing Chinese factory activity unexpectedly fell to a five-month low in October, reinforcing views that the country's economic growth is slowing. The unexpected decision by the Saudi Arabia on Monday to cut oil prices for US resulted in a further slide in oil prices, putting a further pressure on energy stocks. The S&P 500 finished 5.71 points, or 0.3%, lower at 2,021.10. After swinging between small gains and losses the Dow Jones Industrial Average finished the session with a 0.1% marginal gain at 17,383.84. The Nasdaq Composite shed 15.27 points, or 0.3%, to 4,623.64. Most of the companies having published their earnings reports, investors will be focusing on economic data and the ECB meeting on Thursday. The Commerce Department said on Tuesday the trade deficit increased 7.6 percent to $43.03 billion instead of narrowing as had been expected. The surprising spike in the trade deficit is likely to reduce third-quarter growth when the government revises the report later this month. Today at 13:00 CET the Mortgage Applications for the week ended October 31 will be released by Mortgage Bankers Association in US. At 14:15 CET the Automatic Data Processing, Inc publishes the Non-Farm Employment Change in US for October, the tentative forecast is positive. At 16:00 CET the ISM Non-Manufacturing Composite index for October will be released in US, the tentative outlook is positive. At 15:15 CET Fed's Kocherlakota speaks on Monetary Policy in Minnesota, and at 15:30 CET Fed's Lacker speaks on Financial Stability in Washington, while Fed's Rosengren speaks at Conference in Lima.
European stock markets retreated from earlier gains and slumped in late trading on Tuesday after reports that central bankers in the euro area planned to challenge European Central Bank President Mario Draghi over his secretive management style. Investors are concerned that the division within the ECB will negatively affect the European monetary authority’s ability to implement bold policy actions to fight deflation and stimulate economic growth in euro zone. The cut by the European Commission to its growth forecast for the euro zone didn't help bolster investment optimism either. The revised forecasts predict the euro zone economy will expand 0.8 percent this year, 1.1 percent next year and by 1.7 percent in 2016 - a level the Commission had said six months ago would be achieved next year. Across Europe, Britain's FTSE 100 fell 0.5 percent, Germany's DAX dropped 0.9 percent and France's CAC fell 1.5 percent. In Asia, Nikkei surged 2.7% to a seven-year high Tuesday, after the Bank of Japan’s surprise decision on Friday to expand bond purchasing program to ¥80 trillion (around $700 billion) annually from ¥60-¥70 trillion.
Oil continued falling as expanding supply outpaces consumption growth limited by slowing global economy. West Texas Intermediate crude oil for December delivery declined as much as 45 cents to $76.74 a barrel in electronic trading on the New York Mercantile Exchange and was at $76.81 at 3:10 pm Singapore time. The contract lost $1.59 to $77.19 yesterday, the lowest close since October 2011. Brent for December settlement slid as much as 73 cents, or 0.9 percent, to $82.09 a barrel on the London-based ICE Futures Europe exchange. Prices are down 26 percent in 2014. The major producers are not willing to cut production. According to the US Energy Information Administration, oil output in US increased to 8.97 million barrels a day through October 24, the fastest pace in more than 30 years. Saudi Arabia cut its December sales price for Arab Light crude to the US Gulf Coast by 45 cents a barrel, a company statement on November 3 showed. This move is interpreted as a signal Saudi Arabia will be fighting for his US market share, defending it from shale producers. Saudi Arabia’s Oil Minister Ali Al-Naimi is scheduled to attend a climate event in Venezuela starting on November 6, according to embassy officials in Caracas. As experts note, the Saudis are trying to bring OPEC’s smaller members in line before the group’s November 27 meeting in Vienna.
Corn dropped for a third day to reach a one-week low on speculation that dry weather in the U.S. will allow farmers to accelerate harvesting of a record crop. The contract for December delivery lost 0.7 percent to $3.62 a bushel on the Chicago Board of Trade, the lowest level since October 28. Soybeans for January delivery retreated 0.3 percent to $10.07 a bushel after dropping 1.9 percent yesterday. About 83 percent of soybeans were harvested as of November 2 from 70 percent a week earlier, matching the five-year average. Wheat for December delivery fell 0.2 percent to $5.2925 a bushel after declining 1.4 percent yesterday.
US stocks declined on Tuesday as the sell-off of energy shares dragged the S&P500 index lower. Investor sentiment was not helped by the news that the European Commission cut its forecast for growth of domestic product for the 18-country euro zone to 0.8% in 2014, from a previous forecast of 1.2%, in the spring. The downward revision of euro zone economic growth rate is the latest indication of slowing global growth after recent data on Chinese Purchasing Managers' Index showing Chinese factory activity unexpectedly fell to a five-month low in October, reinforcing views that the country's economic growth is slowing. The unexpected decision by the Saudi Arabia on Monday to cut oil prices for US resulted in a further slide in oil prices, putting a further pressure on energy stocks. The S&P 500 finished 5.71 points, or 0.3%, lower at 2,021.10. After swinging between small gains and losses the Dow Jones Industrial Average finished the session with a 0.1% marginal gain at 17,383.84. The Nasdaq Composite shed 15.27 points, or 0.3%, to 4,623.64. Most of the companies having published their earnings reports, investors will be focusing on economic data and the ECB meeting on Thursday. The Commerce Department said on Tuesday the trade deficit increased 7.6 percent to $43.03 billion instead of narrowing as had been expected. The surprising spike in the trade deficit is likely to reduce third-quarter growth when the government revises the report later this month. Today at 13:00 CET the Mortgage Applications for the week ended October 31 will be released by Mortgage Bankers Association in US. At 14:15 CET the Automatic Data Processing, Inc publishes the Non-Farm Employment Change in US for October, the tentative forecast is positive. At 16:00 CET the ISM Non-Manufacturing Composite index for October will be released in US, the tentative outlook is positive. At 15:15 CET Fed's Kocherlakota speaks on Monetary Policy in Minnesota, and at 15:30 CET Fed's Lacker speaks on Financial Stability in Washington, while Fed's Rosengren speaks at Conference in Lima.
European stock markets retreated from earlier gains and slumped in late trading on Tuesday after reports that central bankers in the euro area planned to challenge European Central Bank President Mario Draghi over his secretive management style. Investors are concerned that the division within the ECB will negatively affect the European monetary authority’s ability to implement bold policy actions to fight deflation and stimulate economic growth in euro zone. The cut by the European Commission to its growth forecast for the euro zone didn't help bolster investment optimism either. The revised forecasts predict the euro zone economy will expand 0.8 percent this year, 1.1 percent next year and by 1.7 percent in 2016 - a level the Commission had said six months ago would be achieved next year. Across Europe, Britain's FTSE 100 fell 0.5 percent, Germany's DAX dropped 0.9 percent and France's CAC fell 1.5 percent. In Asia, Nikkei surged 2.7% to a seven-year high Tuesday, after the Bank of Japan’s surprise decision on Friday to expand bond purchasing program to ¥80 trillion (around $700 billion) annually from ¥60-¥70 trillion.
Oil continued falling as expanding supply outpaces consumption growth limited by slowing global economy. West Texas Intermediate crude oil for December delivery declined as much as 45 cents to $76.74 a barrel in electronic trading on the New York Mercantile Exchange and was at $76.81 at 3:10 pm Singapore time. The contract lost $1.59 to $77.19 yesterday, the lowest close since October 2011. Brent for December settlement slid as much as 73 cents, or 0.9 percent, to $82.09 a barrel on the London-based ICE Futures Europe exchange. Prices are down 26 percent in 2014. The major producers are not willing to cut production. According to the US Energy Information Administration, oil output in US increased to 8.97 million barrels a day through October 24, the fastest pace in more than 30 years. Saudi Arabia cut its December sales price for Arab Light crude to the US Gulf Coast by 45 cents a barrel, a company statement on November 3 showed. This move is interpreted as a signal Saudi Arabia will be fighting for his US market share, defending it from shale producers. Saudi Arabia’s Oil Minister Ali Al-Naimi is scheduled to attend a climate event in Venezuela starting on November 6, according to embassy officials in Caracas. As experts note, the Saudis are trying to bring OPEC’s smaller members in line before the group’s November 27 meeting in Vienna.
Corn dropped for a third day to reach a one-week low on speculation that dry weather in the U.S. will allow farmers to accelerate harvesting of a record crop. The contract for December delivery lost 0.7 percent to $3.62 a bushel on the Chicago Board of Trade, the lowest level since October 28. Soybeans for January delivery retreated 0.3 percent to $10.07 a bushel after dropping 1.9 percent yesterday. About 83 percent of soybeans were harvested as of November 2 from 70 percent a week earlier, matching the five-year average. Wheat for December delivery fell 0.2 percent to $5.2925 a bushel after declining 1.4 percent yesterday.
S&P 500 and Dow hit historical highs
World stock markets rose yesterday. S&P 500 and DJI even hit new historical highs. In general, the sideways trend is observed on the global markets since the beginning of the week, as the US labor market data for October will be released tomorrow.
ADP Non-Farm Employment Change in October was released on Wednesday in the US. The risen number of jobs (230K) appeared to be at the highest level since June and outperformed the forecasts (220K). Currently, investors expect the official data released on Friday to be positive. The Republican Party gained the majority of votes in the US Senate yesterday. This was the reason for energy stocks to jump in prices. Market participants hope that Republicans would get the permission to export the US hydrocarbon material. Nasdaq fell slightly due to weak earnings reports of TripAdvisor and FireEye. Their stocks tumbled 14% and 15%, respectively. The trading volume on the US stock exchanges was 13% below the 5-day average and reached 6.4 billion stocks. Today we expect the release of Initial Claims and Q3 Non-Farm Payrolls at 13-30 СЕТ in the US. In general, the outlook is neutral. The US dollar index is slipping moderately. The euro is rising ahead of the next ECB meeting and its President Mario Draghi speaking at the press conference at 13-30 СЕТ. It has already been reported the issuing money volume would amount to $1 trillion euro. However, most of the market participants believe that the conditions of private bonds purchasing will be revealed at the ECB meeting in December. Today Mario Draghi’s speech is likely to be limited to the ECB forecasts of the EU economic indicators. There is a possibility if that happens, the euro may continue its upward movement and strengthen against the US dollar.
European markets upped less than the US markets. Investors deem that the delay in the ECB program of European economy stimulation would have a negative impact on the financial statements of companies. Currently the earnings reports have been published by approximately half of the European companies. The earnings of 64% of them exceeded or matched the forecasts. Now the European stock indices are falling, as investors do not expect good news and the launch of the ECB economic stimulus at 12-45 and 13-30 СЕТ. Moreover, the German growth of industrial orders in September released in the morning was worse than expected.
Nikkei is now dipping in line with other world indices after a strong growth in last few days. In our opinion, its further rise should be confirmed by good economic data. It will come out only the next Monday late in the evening. Note that some economists have criticized the recent decision of the Bank of Japan to increase the amount of money issued, so that it caused the Nikkei growth.
Grain futures, precious metals, coffee and cocoa continued to fall as the US dollar strengthens and the Chinese economy indicates recession. Amid these events the copper price has fallen. Morgan Stanley lowered 1.1% or 250K tons the copper demand forecast in 2014/2015. According to International Copper Study Group, there was a global copper shortage of 589K tons in the first seven months of this year, and since the end of July there was an excess of 77K tons.
The rainy weather forecast in Brazil given by MDA Weather Services pushed coffee and sugar prices down. Some market participants are even planning to revise downwards their crop forecasts in this country. Cocoa price fell ahead of the rainy weather in West Africa and the Ebola situation stabilization. It has not yet spread to the main cocoa producer, the Ivory Coast.
According to China National Grain and Oils Information Centre, there would be an increase in soybean imports to China in November by 5.81 million tons (+38,3%), and in December to 6.8 million tons (+ 62%), compared to 4.2 million tons in October. There is a possibility it might boost soybean prices by the end of the year.
World stock markets rose yesterday. S&P 500 and DJI even hit new historical highs. In general, the sideways trend is observed on the global markets since the beginning of the week, as the US labor market data for October will be released tomorrow.
ADP Non-Farm Employment Change in October was released on Wednesday in the US. The risen number of jobs (230K) appeared to be at the highest level since June and outperformed the forecasts (220K). Currently, investors expect the official data released on Friday to be positive. The Republican Party gained the majority of votes in the US Senate yesterday. This was the reason for energy stocks to jump in prices. Market participants hope that Republicans would get the permission to export the US hydrocarbon material. Nasdaq fell slightly due to weak earnings reports of TripAdvisor and FireEye. Their stocks tumbled 14% and 15%, respectively. The trading volume on the US stock exchanges was 13% below the 5-day average and reached 6.4 billion stocks. Today we expect the release of Initial Claims and Q3 Non-Farm Payrolls at 13-30 СЕТ in the US. In general, the outlook is neutral. The US dollar index is slipping moderately. The euro is rising ahead of the next ECB meeting and its President Mario Draghi speaking at the press conference at 13-30 СЕТ. It has already been reported the issuing money volume would amount to $1 trillion euro. However, most of the market participants believe that the conditions of private bonds purchasing will be revealed at the ECB meeting in December. Today Mario Draghi’s speech is likely to be limited to the ECB forecasts of the EU economic indicators. There is a possibility if that happens, the euro may continue its upward movement and strengthen against the US dollar.
European markets upped less than the US markets. Investors deem that the delay in the ECB program of European economy stimulation would have a negative impact on the financial statements of companies. Currently the earnings reports have been published by approximately half of the European companies. The earnings of 64% of them exceeded or matched the forecasts. Now the European stock indices are falling, as investors do not expect good news and the launch of the ECB economic stimulus at 12-45 and 13-30 СЕТ. Moreover, the German growth of industrial orders in September released in the morning was worse than expected.
Nikkei is now dipping in line with other world indices after a strong growth in last few days. In our opinion, its further rise should be confirmed by good economic data. It will come out only the next Monday late in the evening. Note that some economists have criticized the recent decision of the Bank of Japan to increase the amount of money issued, so that it caused the Nikkei growth.
Grain futures, precious metals, coffee and cocoa continued to fall as the US dollar strengthens and the Chinese economy indicates recession. Amid these events the copper price has fallen. Morgan Stanley lowered 1.1% or 250K tons the copper demand forecast in 2014/2015. According to International Copper Study Group, there was a global copper shortage of 589K tons in the first seven months of this year, and since the end of July there was an excess of 77K tons.
The rainy weather forecast in Brazil given by MDA Weather Services pushed coffee and sugar prices down. Some market participants are even planning to revise downwards their crop forecasts in this country. Cocoa price fell ahead of the rainy weather in West Africa and the Ebola situation stabilization. It has not yet spread to the main cocoa producer, the Ivory Coast.
According to China National Grain and Oils Information Centre, there would be an increase in soybean imports to China in November by 5.81 million tons (+38,3%), and in December to 6.8 million tons (+ 62%), compared to 4.2 million tons in October. There is a possibility it might boost soybean prices by the end of the year.
Stock markets go on rising
European markets rebounded after the falling observed last week. Such a surge was caused by the investor reaction on positive earnings reports released by major European companies: Carlsberg, Nutreco NV, Fugro NV, Kabel Deutschland and Serco Group Plc. As a result, today Stoxx Europe 600 rose 0.2% to close at 336.05.
S&P 500 hit the weekly high amid expectations of positive earnings reports and added 0.1%. A similar growth was demonstrated by DJI index. This week we expect the data released by 16 companies listed in S&P 500, including Cisco Systems Inc. and Wal-Mart Stores Inc. Excellent results were shown by the companies which have already published their reports: 80% of them have outperformed the profit expectations, 60% exceeded the expected sales turnover.
China announced the opening of Shanghai and Hong Kong exchanges for foreign investors: the asset capitalization traded on the stock exchange amounts to $4.2 trillion. The program starts on November, 17. Currently, Shanghai and Hong Kong indices upped 0.8%. Note that the market liberalization program is designed to attract additional investment funds and reduce China's dependence on exports. The country will partially re-focus its markets on domestic consumption.
Gold continued to fall on the London exchange. The investor expectation that the US economy boosting would result in loans amount increase was not justified. In general, the market of precious metals grew on November 7, after the US labor market data release. Non-farm Payrolls was below the outlook: 214000 jobs vs. the expected 235000.
Brent crude oil futures climbed to the weekly high level. Chinese exports outperformed the economic outlook, and that triggered the commodity demand reassessment. Note that China is the second largest importer, and an increase in technology products exports requires higher energy costs, which leads to a natural rise in oil prices: London’s Brent has added 1.7% today. However, we should not expect the global recovery. Kuwaiti Energy Minister said he did not expect any decision on the reduction of oil production at the next OPEC meeting on November 27.
European markets rebounded after the falling observed last week. Such a surge was caused by the investor reaction on positive earnings reports released by major European companies: Carlsberg, Nutreco NV, Fugro NV, Kabel Deutschland and Serco Group Plc. As a result, today Stoxx Europe 600 rose 0.2% to close at 336.05.
S&P 500 hit the weekly high amid expectations of positive earnings reports and added 0.1%. A similar growth was demonstrated by DJI index. This week we expect the data released by 16 companies listed in S&P 500, including Cisco Systems Inc. and Wal-Mart Stores Inc. Excellent results were shown by the companies which have already published their reports: 80% of them have outperformed the profit expectations, 60% exceeded the expected sales turnover.
China announced the opening of Shanghai and Hong Kong exchanges for foreign investors: the asset capitalization traded on the stock exchange amounts to $4.2 trillion. The program starts on November, 17. Currently, Shanghai and Hong Kong indices upped 0.8%. Note that the market liberalization program is designed to attract additional investment funds and reduce China's dependence on exports. The country will partially re-focus its markets on domestic consumption.
Gold continued to fall on the London exchange. The investor expectation that the US economy boosting would result in loans amount increase was not justified. In general, the market of precious metals grew on November 7, after the US labor market data release. Non-farm Payrolls was below the outlook: 214000 jobs vs. the expected 235000.
Brent crude oil futures climbed to the weekly high level. Chinese exports outperformed the economic outlook, and that triggered the commodity demand reassessment. Note that China is the second largest importer, and an increase in technology products exports requires higher energy costs, which leads to a natural rise in oil prices: London’s Brent has added 1.7% today. However, we should not expect the global recovery. Kuwaiti Energy Minister said he did not expect any decision on the reduction of oil production at the next OPEC meeting on November 27.
World markets rise on Monday
US stock markets recorded marginal gains on Monday with investors’ optimism supported by the release of US payroll figures on Friday on the backdrop of weak global economic growth. The S&P 500 closed at a new record high, adding 6.34 points, or 0.3%, higher at 2,038.26. The The Nasdaq Composite rose 19.08 points, or 0.4%, to 4,651.62, the highest level since March 2,000. On Monday the Federal Reserve released its new monthly labor market conditions index, based on 19 separate U.S. labor market indicators, including the unemployment rate and labor force participation rate. The index showed an unchanged 4.0 level for October, providing a modest boost to investor confidence amid concerns over slow recovery in job market. Experts indicate that falling oil prices will likely provide still further momentum for US economic growth as lower gasoline prices will free up consumer spending and the increased consumption component of GDP will outweigh the loss of earnings by energy companies.
European stock markets rebounded on Monday as oil company stocks rose with rising energy prices and companies boosted acquisition activity in the oil services industry . The Stoxx Europe 600 index gained 0.2% to 335.96, after closing out last week with a 0.5% weekly slide. In a speech on Monday a senior ECB policy maker, Executive Board member Yves Mersch said the European Central Bank could examine the possibility of buying state bonds as the bloc's recovery and that of its top economy, Germany, has lost pace. Asian stocks rose today, helped by the gains on Wall Street. The MSCI Asia Pacific Index advanced 0.3 percent by 1:45 pm in Tokyo, with Hong Kong’s Hang Seng Index climbing 0.6 percent. Japanese shares outperformed in Asia on Tuesday, with the Nikkei stock average rising more than 2 percent to a 7-year high as investors expect Prime Minister Shinzo Abe may postpone a planned sales tax increase and call early elections.
West Texas Intermediate crude oil fell for a second day as forecasts for a sixth weekly gain in US crude stockpiles bolstered speculation that rising supply is outpacing demand. Brent Oil for December settlement dropped 1.3 percent to close at $82.34 yesterday, the lowest level since October 2010. The European benchmark crude traded at a premium of $5 to WTI. Amid signs that global supply is outpacing demand OPEC Secretary General Abdullah al-Badri told markets not to “panic” over low oil prices at an industry conference in Abu Dhabi. OPEC’s second-largest producer, Iraq, has joined Saudi Arabia in fighting to protect its market share. This is another indication the major oil producers are not planning to cut production in near future.
With dollar gaining strength and US economy improving gold is under pressure and was trading above the lowest level since 2010. Gold for December delivery slid 1 percent to $1,148.50 an ounce on the Comex in New York after most-active prices sank to $1,130.40 on November 7, the lowest level since April 2010. Silver for immediate delivery slid 0.7 percent to $15.507 an ounce. Spot platinum was at $1,197.88 an ounce from $1,198 yesterday and palladium rose 0.2 percent to $764.50 an ounce.
US stock markets recorded marginal gains on Monday with investors’ optimism supported by the release of US payroll figures on Friday on the backdrop of weak global economic growth. The S&P 500 closed at a new record high, adding 6.34 points, or 0.3%, higher at 2,038.26. The The Nasdaq Composite rose 19.08 points, or 0.4%, to 4,651.62, the highest level since March 2,000. On Monday the Federal Reserve released its new monthly labor market conditions index, based on 19 separate U.S. labor market indicators, including the unemployment rate and labor force participation rate. The index showed an unchanged 4.0 level for October, providing a modest boost to investor confidence amid concerns over slow recovery in job market. Experts indicate that falling oil prices will likely provide still further momentum for US economic growth as lower gasoline prices will free up consumer spending and the increased consumption component of GDP will outweigh the loss of earnings by energy companies.
European stock markets rebounded on Monday as oil company stocks rose with rising energy prices and companies boosted acquisition activity in the oil services industry . The Stoxx Europe 600 index gained 0.2% to 335.96, after closing out last week with a 0.5% weekly slide. In a speech on Monday a senior ECB policy maker, Executive Board member Yves Mersch said the European Central Bank could examine the possibility of buying state bonds as the bloc's recovery and that of its top economy, Germany, has lost pace. Asian stocks rose today, helped by the gains on Wall Street. The MSCI Asia Pacific Index advanced 0.3 percent by 1:45 pm in Tokyo, with Hong Kong’s Hang Seng Index climbing 0.6 percent. Japanese shares outperformed in Asia on Tuesday, with the Nikkei stock average rising more than 2 percent to a 7-year high as investors expect Prime Minister Shinzo Abe may postpone a planned sales tax increase and call early elections.
West Texas Intermediate crude oil fell for a second day as forecasts for a sixth weekly gain in US crude stockpiles bolstered speculation that rising supply is outpacing demand. Brent Oil for December settlement dropped 1.3 percent to close at $82.34 yesterday, the lowest level since October 2010. The European benchmark crude traded at a premium of $5 to WTI. Amid signs that global supply is outpacing demand OPEC Secretary General Abdullah al-Badri told markets not to “panic” over low oil prices at an industry conference in Abu Dhabi. OPEC’s second-largest producer, Iraq, has joined Saudi Arabia in fighting to protect its market share. This is another indication the major oil producers are not planning to cut production in near future.
With dollar gaining strength and US economy improving gold is under pressure and was trading above the lowest level since 2010. Gold for December delivery slid 1 percent to $1,148.50 an ounce on the Comex in New York after most-active prices sank to $1,130.40 on November 7, the lowest level since April 2010. Silver for immediate delivery slid 0.7 percent to $15.507 an ounce. Spot platinum was at $1,197.88 an ounce from $1,198 yesterday and palladium rose 0.2 percent to $764.50 an ounce.
World markets continue rising on Tuesday
US stocks closed at record high for a fifth straight trading session on Tuesday. Stocks posted marginal gains in thinly traded sideways session as no major economic data were released during the day. The S&P 500 added 1.42 points to 2,039.68, registering a fresh record. The Dow Jones Industrial Average climbed 1.2 points, or less than 0.1 percent, to a record 17,614.90. The Nasdaq Composite rose 8.94 points, or 0.2%, to 4,660.56. The single piece of economic data released in a day absent of significant economic statistics due to the Veterans Day holiday, the National Federation of Independent Business reported its small-business optimism index rose 0.8 point to 96.1 in October, a two-month high. And in a CNBC interview Charles PLosser, Philadelphia Fed president, said that even though inflation was below the Fed's preferred level of 2 percent, there was no reason to keep interest rates at current crisis-era levels, especially with U.S. unemployment now so low. He is among the minority of Fed officials who support ending the ultra easy monetary policy sooner than mid 2015. The Fed statement last month reconfirmed that interest rates will be kept low for a "considerable time", but tied a rate hike more closely to economic data. Today at 16:00 CET the Wholesale Inventories mom for September will be released in US, with the forecast of 0.3% against the previous month’s actual number of 0.7% . At 18:00 CET Federal Reserve Bank of Minneapolis President Narayana Kocherlakota will deliver a speech titled "Clarifying the Objectives of Monetary Policy" in Wisconsin.
Major European benchmarks ended the trading session on Tuesday higher for a second straight day. Investor optimism in Europe was boosted by upbeat earnings reports. The Stoxx Europe 600 index closed up 0.4% at 338.93, building on a 0.7% gain from Monday. France’s CAC 40 index added 0.5% to 4,244.53, while Germany’s DAX 30 index gained 0.2% to 9,369.03. The UK’s FTSE 100 index put on 0.2% to 6,627.40, moving higher for a fifth straight day. Vodafone Group PLC , Henkel AG and Royal Vopak NV gained 5.4%, 4.6% and 1.9% after reporting improved performance and revenues. Today at 11:00 CET euro zone Industrial Production data will be released. And at 11:30 CET the Bank of England Inflation Report will be published after employment data at 10:00 CET. Economists expect that the Governor Mark Carney is likely to signal that British interest rates will stay at a record low until around the middle of next year, and the Bank is likely to revise downward the forecasts for growth and inflation it published three months ago because of euro zone economy slowdown and falling oil prices. This will likely result in weakening of the British pound sterling. And tomorrow in the morning at 08:00 CET German Consumer Price Index YoY for October will be released, the outlook is neutral as the CPI is expected to stay unchanged at the level of 0.8%. Two hours later at 10:00 CET on Thursday the ECB publishes its Monthly Report. Asian markets were mixed on Tuesday. Hong Kong stocks rose for a second straight day, as investors squeezed some more gains out of news that the long-awaited Hong Kong-Shanghai Stock Connect would start next week that will allow retail investors around the world to invest in mainland Chinese equities. In Japan stocks rallied on Tuesday as investor optimism was boosted by tumbling yen and an unexpected surge in current account surplus in September. The Nikkei Average jumped 2.1%, recovering from Monday’s loss of 0.6%. Meanwhile, the yen dropped sharply versus the dollar, trading at ¥115.86, compared with ¥114.94 a day earlier. Official data showed Tuesday that Japan’s current account surplus reached ¥963 billion ($8.1 billion) in September, up 61.9% from a year ago. And a newspaper reported today that Japanese Prime Minister Shinzo Abe will postpone a planned tax increase and call a general election for December, boosting stocks further.
Brent crude fell for a third day and West Texas Intermediate dropped in New York. Brent for December settlement closed at $81.67 yesterday, the lowest price since October 2010. Amid signs that supply is outpacing global demand OPEC members are cutting export prices to the US to defend their market share. Yesterday Angola’s Deputy Oil Minister Anibal Octavio da Silva said OPEC is undecided on a production cut. Saudi Arabia, OPEC’s largest producer, and Kuwait have signaled they’re unlikely to reduce output, while Libya, Venezuela and Ecuador have called for action to keep prices from falling further.
Gold posted a marginal gain on Tuesday in a session that started with losses. Gold for December delivery added $3.20, or 0.3%, to $1,163 an ounce on the Comex division of the New York Mercantile Exchange. Holdings in the SPDR Gold Trust shrank for a sixth day to a six-year low yesterday in the longest slump since November 2013. Gold will be under pressure as long as stronger US dollar and improving US economy decrease the demand for safe haven asset. Elsewhere in the metals sector, January platinum lost 20 cents to settle at $1,206.70 an ounce while December palladium rose $6.45, or 0.8%, to settle at $772.70 an ounce. Meanwhile, December silver settled up less than a penny at just under $15.68 an ounce.
US stocks closed at record high for a fifth straight trading session on Tuesday. Stocks posted marginal gains in thinly traded sideways session as no major economic data were released during the day. The S&P 500 added 1.42 points to 2,039.68, registering a fresh record. The Dow Jones Industrial Average climbed 1.2 points, or less than 0.1 percent, to a record 17,614.90. The Nasdaq Composite rose 8.94 points, or 0.2%, to 4,660.56. The single piece of economic data released in a day absent of significant economic statistics due to the Veterans Day holiday, the National Federation of Independent Business reported its small-business optimism index rose 0.8 point to 96.1 in October, a two-month high. And in a CNBC interview Charles PLosser, Philadelphia Fed president, said that even though inflation was below the Fed's preferred level of 2 percent, there was no reason to keep interest rates at current crisis-era levels, especially with U.S. unemployment now so low. He is among the minority of Fed officials who support ending the ultra easy monetary policy sooner than mid 2015. The Fed statement last month reconfirmed that interest rates will be kept low for a "considerable time", but tied a rate hike more closely to economic data. Today at 16:00 CET the Wholesale Inventories mom for September will be released in US, with the forecast of 0.3% against the previous month’s actual number of 0.7% . At 18:00 CET Federal Reserve Bank of Minneapolis President Narayana Kocherlakota will deliver a speech titled "Clarifying the Objectives of Monetary Policy" in Wisconsin.
Major European benchmarks ended the trading session on Tuesday higher for a second straight day. Investor optimism in Europe was boosted by upbeat earnings reports. The Stoxx Europe 600 index closed up 0.4% at 338.93, building on a 0.7% gain from Monday. France’s CAC 40 index added 0.5% to 4,244.53, while Germany’s DAX 30 index gained 0.2% to 9,369.03. The UK’s FTSE 100 index put on 0.2% to 6,627.40, moving higher for a fifth straight day. Vodafone Group PLC , Henkel AG and Royal Vopak NV gained 5.4%, 4.6% and 1.9% after reporting improved performance and revenues. Today at 11:00 CET euro zone Industrial Production data will be released. And at 11:30 CET the Bank of England Inflation Report will be published after employment data at 10:00 CET. Economists expect that the Governor Mark Carney is likely to signal that British interest rates will stay at a record low until around the middle of next year, and the Bank is likely to revise downward the forecasts for growth and inflation it published three months ago because of euro zone economy slowdown and falling oil prices. This will likely result in weakening of the British pound sterling. And tomorrow in the morning at 08:00 CET German Consumer Price Index YoY for October will be released, the outlook is neutral as the CPI is expected to stay unchanged at the level of 0.8%. Two hours later at 10:00 CET on Thursday the ECB publishes its Monthly Report. Asian markets were mixed on Tuesday. Hong Kong stocks rose for a second straight day, as investors squeezed some more gains out of news that the long-awaited Hong Kong-Shanghai Stock Connect would start next week that will allow retail investors around the world to invest in mainland Chinese equities. In Japan stocks rallied on Tuesday as investor optimism was boosted by tumbling yen and an unexpected surge in current account surplus in September. The Nikkei Average jumped 2.1%, recovering from Monday’s loss of 0.6%. Meanwhile, the yen dropped sharply versus the dollar, trading at ¥115.86, compared with ¥114.94 a day earlier. Official data showed Tuesday that Japan’s current account surplus reached ¥963 billion ($8.1 billion) in September, up 61.9% from a year ago. And a newspaper reported today that Japanese Prime Minister Shinzo Abe will postpone a planned tax increase and call a general election for December, boosting stocks further.
Brent crude fell for a third day and West Texas Intermediate dropped in New York. Brent for December settlement closed at $81.67 yesterday, the lowest price since October 2010. Amid signs that supply is outpacing global demand OPEC members are cutting export prices to the US to defend their market share. Yesterday Angola’s Deputy Oil Minister Anibal Octavio da Silva said OPEC is undecided on a production cut. Saudi Arabia, OPEC’s largest producer, and Kuwait have signaled they’re unlikely to reduce output, while Libya, Venezuela and Ecuador have called for action to keep prices from falling further.
Gold posted a marginal gain on Tuesday in a session that started with losses. Gold for December delivery added $3.20, or 0.3%, to $1,163 an ounce on the Comex division of the New York Mercantile Exchange. Holdings in the SPDR Gold Trust shrank for a sixth day to a six-year low yesterday in the longest slump since November 2013. Gold will be under pressure as long as stronger US dollar and improving US economy decrease the demand for safe haven asset. Elsewhere in the metals sector, January platinum lost 20 cents to settle at $1,206.70 an ounce while December palladium rose $6.45, or 0.8%, to settle at $772.70 an ounce. Meanwhile, December silver settled up less than a penny at just under $15.68 an ounce.
The Dow and S&P 500 snap 5-day winning streak
US stocks fell on Wednesday, breaking the S&P 500's and Dow Jones Industrial Average’s 5-day record-closing streak as falling oil prices and heightened geopolitical risks turned investors cautious. After advancing 1.4% in previous five sessions the S&P 500 closed 1.43 points lower at 2,038.25 as investors sold off utilities and energy sector stocks. The Dow Jones Industrial Average slipped 2.7 points to 17,612.20. Today at 14:30 CET the Continuing Claims for the week ended November 1 and Initial Jobless Claims for the week ended November 8 will be released in US. The tentative forecast for the Continuing claims is positive, while the Initial Jobless Claims number is expected to rise marginally. At 18:45 CET Fed Chair Janet Yellen will deliver welcoming remarks at FED/ECB event.
European markets closed lower on Wednesday as banking shares declined after companies agreed to pay multi-billion dollar fine to settle allegations that their traders helped rig currency markets and data from European Union’s statistics agency indicated that third-quarter output in euro zone will be lower than in the second quarter. A report from the International Monetary Fund on Wednesday warned of downside risks to its growth projections for the euro zone, and urged the European Central Bank to act if prices continue falling. Declining banking stocks dragged UK’s FTSE 100 , which fell 0.3% to 6,611.04. The British pound slumped after the Bank of England cut its forecasts for growth and inflation and signaled it is unlikely to raise interest rates until the second half of next year. The Bank of England sees British inflation falling below 1 percent in the next six months and Governor Mark Carney said markets were right to rule out an interest rate hike any time soon. The pound fell to $1.5818, from $1.5918 late on Tuesday. Separately, the Organization for Economic Cooperation and Development report indicated economic growth is set to slow in the euro zone and in the UK over the coming months. The Stoxx Europe 600 index fell 1.1% to close at 335.09, falling from a five-week closing high reached on Tuesday.
In Asia, China’s stock markets closed higher as investors expect that a stock trading link between Shanghai and Hong Kong launching on Monday will bring new players to mainland China’s stock market. In Japan, the Nikkei Stock Average ended up 0.4% at 17,197.05. Investors are betting that the planned national consumption tax increase originally expected next year will be delayed by Prime Minister Abe after he evaluates economic indicators such as July-September gross domestic product, scheduled to come out November 17.
Brent crude fell further from a four-year low, trading near $80 a barrel amid signs that OPEC remains unwilling to reduce output to stem global oversupply. West Texas Intermediate was steady in New York. Saudi Arabia’s oil minister said in a public comment that talk of a price war has “no basis in reality” and they “want stable oil markets and steady prices”. Kuwaiti Oil Minister Ali Al-Omair said today OPEC won’t cut its collective output target at this month’s meeting.
Corn advanced for a fourth day, as reports of arctic air masses moving to northern and central US this week gave rise to speculation ranchers will increase feed stocks as animals will need to use more energy to stay warm.
US stocks fell on Wednesday, breaking the S&P 500's and Dow Jones Industrial Average’s 5-day record-closing streak as falling oil prices and heightened geopolitical risks turned investors cautious. After advancing 1.4% in previous five sessions the S&P 500 closed 1.43 points lower at 2,038.25 as investors sold off utilities and energy sector stocks. The Dow Jones Industrial Average slipped 2.7 points to 17,612.20. Today at 14:30 CET the Continuing Claims for the week ended November 1 and Initial Jobless Claims for the week ended November 8 will be released in US. The tentative forecast for the Continuing claims is positive, while the Initial Jobless Claims number is expected to rise marginally. At 18:45 CET Fed Chair Janet Yellen will deliver welcoming remarks at FED/ECB event.
European markets closed lower on Wednesday as banking shares declined after companies agreed to pay multi-billion dollar fine to settle allegations that their traders helped rig currency markets and data from European Union’s statistics agency indicated that third-quarter output in euro zone will be lower than in the second quarter. A report from the International Monetary Fund on Wednesday warned of downside risks to its growth projections for the euro zone, and urged the European Central Bank to act if prices continue falling. Declining banking stocks dragged UK’s FTSE 100 , which fell 0.3% to 6,611.04. The British pound slumped after the Bank of England cut its forecasts for growth and inflation and signaled it is unlikely to raise interest rates until the second half of next year. The Bank of England sees British inflation falling below 1 percent in the next six months and Governor Mark Carney said markets were right to rule out an interest rate hike any time soon. The pound fell to $1.5818, from $1.5918 late on Tuesday. Separately, the Organization for Economic Cooperation and Development report indicated economic growth is set to slow in the euro zone and in the UK over the coming months. The Stoxx Europe 600 index fell 1.1% to close at 335.09, falling from a five-week closing high reached on Tuesday.
In Asia, China’s stock markets closed higher as investors expect that a stock trading link between Shanghai and Hong Kong launching on Monday will bring new players to mainland China’s stock market. In Japan, the Nikkei Stock Average ended up 0.4% at 17,197.05. Investors are betting that the planned national consumption tax increase originally expected next year will be delayed by Prime Minister Abe after he evaluates economic indicators such as July-September gross domestic product, scheduled to come out November 17.
Brent crude fell further from a four-year low, trading near $80 a barrel amid signs that OPEC remains unwilling to reduce output to stem global oversupply. West Texas Intermediate was steady in New York. Saudi Arabia’s oil minister said in a public comment that talk of a price war has “no basis in reality” and they “want stable oil markets and steady prices”. Kuwaiti Oil Minister Ali Al-Omair said today OPEC won’t cut its collective output target at this month’s meeting.
Corn advanced for a fourth day, as reports of arctic air masses moving to northern and central US this week gave rise to speculation ranchers will increase feed stocks as animals will need to use more energy to stay warm.
Japan: investors shocked
The Japanese recession onset pushed the major European, American and Asian indices. The Q3 GDP in Japan, the world’s third largest economy, shrank 1.6% after a reduction of 7.3% in the previous quarter. The official outlook amounted to 2.3% of it’s growth. It was reported that the Bank of Japan was planning to create new incentives for Japanese exports in terms of interest rate reduction and bond issuing. This event leads to the main conclusion: the US economy is no good at coping with the global economic growth function.
Stoxx Europe 600 Index has slipped 0.5% at the London Stock Exchange opening. S&P500 futures dropped 0.4%. Industrial Production data will be released today in the United States. It is estimated to 0.2% in the past month, and that is much lower than in September (1%). MSCI Pacific index and Japan’s Topix have also fallen 1.2% and 2.5%, respectively.
WTI crude oil continued to slide and lost 1.2% after the largest retracement in the previous month: investors don’t believe there will be any decision made regarding the reduction of oil supply at the next OPEC meeting. The targeted dumping is more probable to maintain the market share. Oil prices have fallen about 30% since early June as the US oil production rose till the historical high level. As a result, OPEC failed to achieve a reduction in oil production and was forced to decrease export prices. Among the most affected countries were Venezuela, Libya, and Ecuador. WTI price slipped more than 3.6% over the past week, and 24% compared to the last year.
Gold prices rose $24.10, or 2.07%, to $1185,60 per troy ounce. Gold futures is traded at the level of one-week high: investors are still cautious at closing short positions before the today’s release of important US economic data. Note that today we expect the publication of Empire State manufacturing Index and the US Industrial Production m/m. We don’t expect a long-term price growth of precious metals as positive US economic data makes it possible to expect the monetary policy tightening in the short term.
The Japanese recession onset pushed the major European, American and Asian indices. The Q3 GDP in Japan, the world’s third largest economy, shrank 1.6% after a reduction of 7.3% in the previous quarter. The official outlook amounted to 2.3% of it’s growth. It was reported that the Bank of Japan was planning to create new incentives for Japanese exports in terms of interest rate reduction and bond issuing. This event leads to the main conclusion: the US economy is no good at coping with the global economic growth function.
Stoxx Europe 600 Index has slipped 0.5% at the London Stock Exchange opening. S&P500 futures dropped 0.4%. Industrial Production data will be released today in the United States. It is estimated to 0.2% in the past month, and that is much lower than in September (1%). MSCI Pacific index and Japan’s Topix have also fallen 1.2% and 2.5%, respectively.
WTI crude oil continued to slide and lost 1.2% after the largest retracement in the previous month: investors don’t believe there will be any decision made regarding the reduction of oil supply at the next OPEC meeting. The targeted dumping is more probable to maintain the market share. Oil prices have fallen about 30% since early June as the US oil production rose till the historical high level. As a result, OPEC failed to achieve a reduction in oil production and was forced to decrease export prices. Among the most affected countries were Venezuela, Libya, and Ecuador. WTI price slipped more than 3.6% over the past week, and 24% compared to the last year.
Gold prices rose $24.10, or 2.07%, to $1185,60 per troy ounce. Gold futures is traded at the level of one-week high: investors are still cautious at closing short positions before the today’s release of important US economic data. Note that today we expect the publication of Empire State manufacturing Index and the US Industrial Production m/m. We don’t expect a long-term price growth of precious metals as positive US economic data makes it possible to expect the monetary policy tightening in the short term.
Stock markets rise, S&P500 hits new record
US stocks declined in the morning trade on Monday following unexpected news that Japan’s economy contracted for the second consecutive quarter. The US central bank report that nation’s industrial production fell 0.1% in October after a 0.8 percent increase in September, the second decline in the past three months didn’t help investor optimism either. Stocks recovered in afternoon trade after market sentiment was bolstered by the news report that European Central Bank president Mario Draghi stated during testimony to the European Parliament in Brussels that the central bank would be open to potentially buying government bonds, if needed. The S&P 500 posted a small gain of 1.5 points which was enough to push the index to a new record close at 2,041.43 , its 42nd this year. The Dow Jones Industrial Average added 13 points, or 0.1%, to 17,647.75. In a separate report, the New York Federal Reserve said its Empire State general business conditions index rose in November. Businesses remain upbeat about the future as an index for future business hit its highest level since January 2012.
European stocks ended Monday higher after Draghi’s testimony indicated a possible start of a new round of monetary stimulus program by the ECB to help the recovery of euror zone economy. The Stoxx 600 had been lower for much of Monday’s session after data showed real gross domestic product in Japan shrank 1.6% in the third quarter. Draghi also reiterated his view that eurozone governments must enact structural reforms to foster economic growth, particularly by enacting labor reforms that would make job markets more flexible. The Stoxx Europe 600 index closed up 0.5% at 337.25, led by telecom, tech, resources and financial stocks. The euro fell to $1.2454 Monday as investors sold euros in anticipation of expansion of the monetary easing policy by ECB after trading above $1.2500 before Draghi’s remarks.
In Japan stock market is rising today after falling by 3% on Monday as investors anticipate that Japanese Prime Minister Shinzo Abe will announce later in the day that he will delay an unpopular sales tax increase by more than a year and call a general election on December 14. Investors expect that the Bank of Japan will also announce about expansion of its monetary stimulus program as its two-day policy board meeting ends on Wednesday. The unexpected GDP contraction and the expansion of monetary easing measures by Japan’s central bank indicate that the yen will continue to weaken against US dollar.
Brent crude oil fell for a second day amid signs of weakening global demand. Futures dropped as much as 0.6 percent in London. West Texas Intermediate was steady in New York. US shale drillers have said they are planning on production growth with fewer rigs despite of falling prices. More investors believe OPEC is not likely cut its output as it doesn’t want to lose its market share to US shale producers.
Corn fell for a third day in the longest retreat this month as US farmers accelerated harvesting of a record crop. The contract for March delivery lost as much as 0.5 percent to $3.8875 a bushel on the Chicago Board of Trade and was at $3.8975 by 10:56 am in Singapore. A decline today would complete the longest such run since September 23. Soybeans also dropped. Soybeans for January delivery dropped 0.7 percent to $10.2925 a bushel.
US stocks declined in the morning trade on Monday following unexpected news that Japan’s economy contracted for the second consecutive quarter. The US central bank report that nation’s industrial production fell 0.1% in October after a 0.8 percent increase in September, the second decline in the past three months didn’t help investor optimism either. Stocks recovered in afternoon trade after market sentiment was bolstered by the news report that European Central Bank president Mario Draghi stated during testimony to the European Parliament in Brussels that the central bank would be open to potentially buying government bonds, if needed. The S&P 500 posted a small gain of 1.5 points which was enough to push the index to a new record close at 2,041.43 , its 42nd this year. The Dow Jones Industrial Average added 13 points, or 0.1%, to 17,647.75. In a separate report, the New York Federal Reserve said its Empire State general business conditions index rose in November. Businesses remain upbeat about the future as an index for future business hit its highest level since January 2012.
European stocks ended Monday higher after Draghi’s testimony indicated a possible start of a new round of monetary stimulus program by the ECB to help the recovery of euror zone economy. The Stoxx 600 had been lower for much of Monday’s session after data showed real gross domestic product in Japan shrank 1.6% in the third quarter. Draghi also reiterated his view that eurozone governments must enact structural reforms to foster economic growth, particularly by enacting labor reforms that would make job markets more flexible. The Stoxx Europe 600 index closed up 0.5% at 337.25, led by telecom, tech, resources and financial stocks. The euro fell to $1.2454 Monday as investors sold euros in anticipation of expansion of the monetary easing policy by ECB after trading above $1.2500 before Draghi’s remarks.
In Japan stock market is rising today after falling by 3% on Monday as investors anticipate that Japanese Prime Minister Shinzo Abe will announce later in the day that he will delay an unpopular sales tax increase by more than a year and call a general election on December 14. Investors expect that the Bank of Japan will also announce about expansion of its monetary stimulus program as its two-day policy board meeting ends on Wednesday. The unexpected GDP contraction and the expansion of monetary easing measures by Japan’s central bank indicate that the yen will continue to weaken against US dollar.
Brent crude oil fell for a second day amid signs of weakening global demand. Futures dropped as much as 0.6 percent in London. West Texas Intermediate was steady in New York. US shale drillers have said they are planning on production growth with fewer rigs despite of falling prices. More investors believe OPEC is not likely cut its output as it doesn’t want to lose its market share to US shale producers.
Corn fell for a third day in the longest retreat this month as US farmers accelerated harvesting of a record crop. The contract for March delivery lost as much as 0.5 percent to $3.8875 a bushel on the Chicago Board of Trade and was at $3.8975 by 10:56 am in Singapore. A decline today would complete the longest such run since September 23. Soybeans also dropped. Soybeans for January delivery dropped 0.7 percent to $10.2925 a bushel.
Stocks continue rising, S&P 500 and Dow hit new record closing highs
The US stocks recorded sizable gains on Tuesday as investor optimism was boosted by upbeat housing data, as well as news of a sales tax hike delay in Japan and better-than-expected ZEW survey data from Germany. The S&P 500 rose 10.48 points, or 0.5% to close at an all-time high of 2,051.80. The Dow Jones Industrial Average added 40 points, or 0.2%, to close at a record level of 17,687.82. US home builder sentiment rose in November as the Housing Market Index released on Tuesday indicated an advance to 58 in November from 54 in October, which was led by more optimism over present and upcoming sales of single-family homes. And US producer inflation edged up 0.2 percent in October, above expectations. Nevertheless, the underlying inflation trend is weak as core PPI excluding energy, food and services rose only 0.1 percent. Today at 20:00 CET Fed releases Minutes from October 28-29 FOMC Meeting which markets will watch for any clues on when the Fed will start raising rates.
European markets were buoyed by the better-than-expected German ZEW survey, showing the lead economic-sentiment indicator rose to 11.5 in November from a negative 3.6 in October. The survey eased concerns about Europe’s biggest economy by providing grounds for optimism after data released last week showed Germany narrowly avoided recession in the third quarter. The DAX equity index jumped 1.6% to 9,456.53, the strongest close since September 30. The UK’s FTSE 100 index rose 0.6% to 6,709.13, and in Paris, the CAC 40 gained 0.9% to end at 4,262.38. The euro rose against the dollar following the ZEW data, but will likely remain under pressure as the European Central Bank has indicated it is considering purchasing government bonds as the next stage of its monetary easing policy measures. The dollar fell against the pound after a report that inflation in the UK accelerated in October to 1.3%, from 1.2% in September. Yesterday afternoon Japanese Prime Minister Shinzo Abe called for snap elections in December and delayed a planned sales-tax hike delay for a year and a half. Japanese stocks started modestly higher today but quickly added to gains as the yen continued falling ahead of Bank of Japan’s Interest Rate Statement and the central bank’s Governor Haruhiko Kuroda’s press conference later in the day.
Oil continued falling amid speculation that OPEC will resist production cuts sought by some of its smaller members. Ecuador and Venezuela will ask members of the Organization of Petroleum Exporting Countries to reduce excess output, an Ecuador official said. Brent for January settlement fell 84 cents to $78.47 a barrel yesterday on the London-based ICE Futures Europe exchange.
Gold prices jumped Tuesday as the dollar fell against major currencies amid economic and political news. The US currency fell against the yen after Japanese Prime Minister Shinzo Abe said Tuesday the government will delay by 18 months a planned increase in sales tax. He will dissolve the lower house of parliament and has called for a snap election to be held in December. Gold has been falling against the backdrop of improving US economy and stronger dollar as central banks outside US expand monetary easing policy measures to stimulate faltering economies. Gold for December delivery gained $13.60, or 1.2%, to settle at $1,197.10 an ounce. December silver gained 12 cents, or 0.7%, settling at $16.17 an ounce.
The US stocks recorded sizable gains on Tuesday as investor optimism was boosted by upbeat housing data, as well as news of a sales tax hike delay in Japan and better-than-expected ZEW survey data from Germany. The S&P 500 rose 10.48 points, or 0.5% to close at an all-time high of 2,051.80. The Dow Jones Industrial Average added 40 points, or 0.2%, to close at a record level of 17,687.82. US home builder sentiment rose in November as the Housing Market Index released on Tuesday indicated an advance to 58 in November from 54 in October, which was led by more optimism over present and upcoming sales of single-family homes. And US producer inflation edged up 0.2 percent in October, above expectations. Nevertheless, the underlying inflation trend is weak as core PPI excluding energy, food and services rose only 0.1 percent. Today at 20:00 CET Fed releases Minutes from October 28-29 FOMC Meeting which markets will watch for any clues on when the Fed will start raising rates.
European markets were buoyed by the better-than-expected German ZEW survey, showing the lead economic-sentiment indicator rose to 11.5 in November from a negative 3.6 in October. The survey eased concerns about Europe’s biggest economy by providing grounds for optimism after data released last week showed Germany narrowly avoided recession in the third quarter. The DAX equity index jumped 1.6% to 9,456.53, the strongest close since September 30. The UK’s FTSE 100 index rose 0.6% to 6,709.13, and in Paris, the CAC 40 gained 0.9% to end at 4,262.38. The euro rose against the dollar following the ZEW data, but will likely remain under pressure as the European Central Bank has indicated it is considering purchasing government bonds as the next stage of its monetary easing policy measures. The dollar fell against the pound after a report that inflation in the UK accelerated in October to 1.3%, from 1.2% in September. Yesterday afternoon Japanese Prime Minister Shinzo Abe called for snap elections in December and delayed a planned sales-tax hike delay for a year and a half. Japanese stocks started modestly higher today but quickly added to gains as the yen continued falling ahead of Bank of Japan’s Interest Rate Statement and the central bank’s Governor Haruhiko Kuroda’s press conference later in the day.
Oil continued falling amid speculation that OPEC will resist production cuts sought by some of its smaller members. Ecuador and Venezuela will ask members of the Organization of Petroleum Exporting Countries to reduce excess output, an Ecuador official said. Brent for January settlement fell 84 cents to $78.47 a barrel yesterday on the London-based ICE Futures Europe exchange.
Gold prices jumped Tuesday as the dollar fell against major currencies amid economic and political news. The US currency fell against the yen after Japanese Prime Minister Shinzo Abe said Tuesday the government will delay by 18 months a planned increase in sales tax. He will dissolve the lower house of parliament and has called for a snap election to be held in December. Gold has been falling against the backdrop of improving US economy and stronger dollar as central banks outside US expand monetary easing policy measures to stimulate faltering economies. Gold for December delivery gained $13.60, or 1.2%, to settle at $1,197.10 an ounce. December silver gained 12 cents, or 0.7%, settling at $16.17 an ounce.
Markets retreat, S&P 500 snaps 4-day advance
The US stocks traded in a narrow range on Wednesday as the latest minutes from the October meeting of the Federal Open Market Committee were published and closed marginally lower. The S&P 500 closed 3.1 points lower at 2,048.72, ending its four-day winning streak and posting its 43rd record high previous day. The Dow Jones Industrial Average ticked down 2.1 points to 17,685.73. The Nasdaq Composite finished down 26.73 points, or 0.6%, at 4,675.71. The Fed minutes revealed that several Federal Reserve officials pushed colleagues to say more publicly about the pace of interest rate increases, suggesting that the central bank is still planning to raise rates next year despite low inflation and weak global economic outlook. No additional information was revealed about when interest rates would be hiked. It is expected Fed will increase rates near the end of 2015. Earlier Wednesday the Commerce Department reported that construction started on new US homes fell in October as multifamily-home construction dropped 15.5%, while single family home construction actually rose 4.2% to its highest pace since November 2013. Today at 14:30 CET the Consumer Price Index for October (YoY) will be released in US, the tentative forecast is 1.6% against 1.7 percent in the previous month. At the same time the Continuing Claims and Initial Jobless Claims for the weeks ended November 8 and 15 will be released, and the tentative forecast is positive. At 15:45 CET Markit releases preliminary US Manufacturing PMI for November. And at 16:00 CET Existing Home Sales for October, the Leading Indicators for October and Philadelphia Fed Manufacturing Index will be released, which are expected to come out lower compared with the previous month.
European stock markets posted marginal gains after hitting a seven-week high earlier on Wednesday as investors adopted cautious stance ahead of minutes of Fed’s October policy meeting. The stocks were also under pressure as mining shares fell following a 5% drop in China’s iron ore futures, indicating a supply glut and weak demand. Germany's DAX rose 0.17 percent and France's CAC was up 0.09 percent. UK’s FTSE 100 index fell 0.2% to 6,696.60. The euro moved higher against the dollar for the second consecutive session, briefly climbing to $1.2605 immediately after the FOMC minutes before falling back to $1.2543. Japan’s exports rose the most in eight months in October, as data from finance ministry indicated overseas shipments rose 9.6 percent from a year earlier to the highest level since October 2008. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession. China’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction and the lowest in six months.
Crude-oil futures extended losses to a third straight session on the backdrop of the US Energy Information Administration report earlier Wednesday showing a surprise increase in supplies. January Brent crude on London’s ICE Futures exchange fell 0.5%, to finish at $78.10 a barrel. Brent prices slid 1.7% in the last three sessions. Gold declined on reports Wednesday that support for a Swiss November 30 referendum to require the country’s central bank to hold 20% of its reserves in gold will likely not secure more than 50% support to pass. Gold for December delivery slid $3.20 to settle at 1,193.90 an ounce.
The US stocks traded in a narrow range on Wednesday as the latest minutes from the October meeting of the Federal Open Market Committee were published and closed marginally lower. The S&P 500 closed 3.1 points lower at 2,048.72, ending its four-day winning streak and posting its 43rd record high previous day. The Dow Jones Industrial Average ticked down 2.1 points to 17,685.73. The Nasdaq Composite finished down 26.73 points, or 0.6%, at 4,675.71. The Fed minutes revealed that several Federal Reserve officials pushed colleagues to say more publicly about the pace of interest rate increases, suggesting that the central bank is still planning to raise rates next year despite low inflation and weak global economic outlook. No additional information was revealed about when interest rates would be hiked. It is expected Fed will increase rates near the end of 2015. Earlier Wednesday the Commerce Department reported that construction started on new US homes fell in October as multifamily-home construction dropped 15.5%, while single family home construction actually rose 4.2% to its highest pace since November 2013. Today at 14:30 CET the Consumer Price Index for October (YoY) will be released in US, the tentative forecast is 1.6% against 1.7 percent in the previous month. At the same time the Continuing Claims and Initial Jobless Claims for the weeks ended November 8 and 15 will be released, and the tentative forecast is positive. At 15:45 CET Markit releases preliminary US Manufacturing PMI for November. And at 16:00 CET Existing Home Sales for October, the Leading Indicators for October and Philadelphia Fed Manufacturing Index will be released, which are expected to come out lower compared with the previous month.
European stock markets posted marginal gains after hitting a seven-week high earlier on Wednesday as investors adopted cautious stance ahead of minutes of Fed’s October policy meeting. The stocks were also under pressure as mining shares fell following a 5% drop in China’s iron ore futures, indicating a supply glut and weak demand. Germany's DAX rose 0.17 percent and France's CAC was up 0.09 percent. UK’s FTSE 100 index fell 0.2% to 6,696.60. The euro moved higher against the dollar for the second consecutive session, briefly climbing to $1.2605 immediately after the FOMC minutes before falling back to $1.2543. Japan’s exports rose the most in eight months in October, as data from finance ministry indicated overseas shipments rose 9.6 percent from a year earlier to the highest level since October 2008. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession. China’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction and the lowest in six months.
Crude-oil futures extended losses to a third straight session on the backdrop of the US Energy Information Administration report earlier Wednesday showing a surprise increase in supplies. January Brent crude on London’s ICE Futures exchange fell 0.5%, to finish at $78.10 a barrel. Brent prices slid 1.7% in the last three sessions. Gold declined on reports Wednesday that support for a Swiss November 30 referendum to require the country’s central bank to hold 20% of its reserves in gold will likely not secure more than 50% support to pass. Gold for December delivery slid $3.20 to settle at 1,193.90 an ounce.
