t’s been US traders appear set to head home for the holidays in a good mood. Today four major indices, the Dow Industrials, S&P 500, Nasdaq Composite and Russell 2000 all hit new all-time highs, indicating that this rally has growing breadth, a bullish sign.
We’re still just at the start of the seasonally strongest time of the year for stocks. Unlike last year when the seasonal rally (which usually starts mid-October) was delayed until February, this year, the seasonally stronger period appears to have only had a short delay due to the US election. Speculation that the incoming Trump Administration may pursue pro-business policies while dropping or de-emphasising some of the more contentious diversions or disruptive policies (like his decision not to keep going after the Clintons). Traders also appear to be seeing positives in the video President-Elect Trump released about his plans for his first day in office. In the video he talked about replacing TPP with bi-lateral agreements, and about reducing regulations in the energy sector which making no mention of Mexico or Obamacare.
It was a mixed day for commodity action. Copper continues to rally, boosting metal mining stocks. Speculation on an OPEC deal turned out to be premature once again (I don’t expect anything to be finalized before the November 30th OPEC meeting, that’s how these kind of talks usually go). Today’s pullback in oil while a normal trading correction took the wind out of energy stocks sails along with CAD. Late today, API reported a fall of 1.3 mmbbls in US inventories but the oil price hasn’t really responded yet. It may remain active around ongoing OPEC speculation and Wednesday’s US DOE inventories.
Wednesday is the busiest day of the week for economic news particularly from the US. Flash manufacturing reports are due for Germany, France and the US. There is a ton of data out from the US Wednesday morning with several reports usually due later in the week being moved up. Some of the big numbers due include durable goods orders, jobless claims, flash manufacturing PMI and consumer sentiment.
Minutes from the last Fed meeting are also due. Although a December rate hike is expected by pretty much everyone, any comments related to the path of future hikes into 2017 may attract some attention with the US Dollar index having priced in 4-5 increases next year.
Overall, US markets are expected to go quiet after Wednesday about noon as traders head home (This time of year always reminds me of the movie Planes, Trains and Automobiles. US markets are closed Thursday and return for a quiet session Friday where the desks are staffed by junior people under orders not to make any waves while the heavy hitters are out shopping. Friday and over the weekend, Black Friday sales results and anecdotes form the malls about traffic may give an idea of the state of consumer spending heading into the Christmas season.
There have been no major announcements after the US close today.
Significant announcements released overnight include:
API US crude oil inventories
Canada retail sales 0.6% as expected vs previous (0.1%)
Canada retail ex auto 0.0% vs street 0.5% and previous 0.0%
US existing home sales 5.60M vs street 5.44M
US Richmond Fed 4 vs street 0 and previous (4)
UK CBI total orders (3) vs street (8) vs previous (17)
UK CBI selling prices 19 vs previous 8
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
4:00 pm AEDT Singapore consumer prices street 0.0%
4:00 pm AEDT Singapore core CPI street 1.1%
7:00 am GMT Norway unemployment rate street 4.9%
8:00 am GMT France flash manufacturing PMI street 51.5
8:00 am GMT France flash service PMI street 51.9
8:30 am GMT Germany flash manufacturing PMI street 54.8
8:30 am GMT Germany flash service PMI street 54.0
8:30 am EST US durable goods orders street 1.7%
8:30 am EST US durables ex transport street 0.2%
8:30 am EST US jobless claims street 250K
9:00 am EST US FHFA house prices street 0.6%
9:45 am EST US flash manufacturing PMI street 53.5
10:00 am EST US new home sales street 590K
10:00 am EST US consumer sentiment street 91.6
10:30 am EST US DOE crude oil inventories street 1.0 mmbbls vs previous 5.2
10:30 am EST US DOE gasoline inventories street 0.9 mmbbls
12:00 pm EST US natural gas storage street 8 BCF
2:00 pm EST FOMC November meeting minutes
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