U.S. Equity Markets recovered some of its earlier losses to end the day mixed. The S&P ended the session, closing -0.13% lower while the Russell 2000 again outperformed closing higher by 1.08%. A sharp rise in Jobless claims weighed on markets. Jobless Claims rose in the week ending December 5, despite the estimate for them to remain the same. This marked the third increase in four weeks, and Claims also hit the highest level since September. The data also continue to spark fears that recent Coronavirus lockdowns will spur another increase in layoffs. Stimulus remained in the headlines, as Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi both touted the progress they had made. After the markets closed the FDA’s advisory committee gave the green light for the Covid Vaccine with the regulator expected to approve the Pfizer and BioNTech’s vaccine next week. European Indices closed higher. European Commission President Ursula von der Leyen and British Prime Minster Boris Johnson said they would determine the future of post-Brexit trade talks by Sunday. The European Union group of national leaders meets for its final time this year, starting today, as it tries to resolve a deadlock on moving forward with its budget and Coronavirus-aid spending. French Industrial Production beat estimates in October, bringing total production within 3.6% of pre-COVID-19 levels. The European Central Bank kept interest rates unchanged, but increased its Asset-Purchase programme, which now sits at $2.25 trillion. In her post-meeting press conference, President Christine Lagarde noted the rebound of economic activity in the third quarter was stronger than expected. But she expressed concern growth in the fourth quarter, hence the support from the central bank. Elsewhere, Oil closed 3% higher on optimism that a vaccine will spur a return to “normal” economic activity, while Gold again closed flat.
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The S&P 500 closed 0.13% lower at a price of 3668.
The Dow Jones Industrial Average closed 69 points lower for a 0.23% loss at a price of 30,000.
The NASDAQ 100 closed 0.3% higher at a price of 12,401.
The Stoxx Europe 600 Index closed 0.4% higher.
The MSCI Asia Pacific Index rose 0.3%.
This morning the Nikkei closed 0.39% lower at a price of 26,652.
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.4% higher at $1.2125.
The British pound fell 0.3% to close at $1.3290.
The Japanese yen closed 0.1% higher at 104.29 per dollar.
Germany’s 10-year yield closed unchanged at -0.61%.
Britain’s 10-year yield closed three basis points lower at 0.22%.
US 10 Year Treasury closed one basis point higher at 0.93%.
West Texas Intermediate crude closed 3% higher at $45.88 a barrel.
Gold closed flat at $1,829.20 an ounce.
This morning on the Economic Front we already had the release of German CPI which came in as expected with a -0.3% print. At 9.30 am we have the Bank of England Financial Policy Committee Minutes and this is followed at 1.30 pm by U.S PPI. Finally, at 3.00 pm we have the University of Michigan Consumer Sentiment Index.
December S&P 500
My aggressive 3346 S&P buy level worked well with the market rallying 30 Handles, enabling me to cover this position at my 3659 T/P level and I am still flat. Despite sentiment levels near all-time highs I am happy to buy the dip in the S&P as long as we do not break and close below the near-term support from 3590/3610. Today my buy level will be from 3625/3639 with a 3913 stop. If I am taken long and subsequently stopped out of this position, I will be a more aggressive buyer from 3590/3605 with a 3577 ‘’Closing Stop’’. Ahead of the weekend I will now raise my sell level to 3695/3710 with a 3722 stop.
After the Euro traded higher to my 1.2155 sell level the Euro fell 40 points and I used this move lower to exit this short position at my revised 1.2136 T/P level and I am now flat. I will raise my buy level to 1.2010/1.2060 with a 1.1965 stop. The Euro has resistance from 1.2180/1.2230 where I will be a seller with a 1.2275 stop.
December Dollar Index
The Dollar traded lower to my 90.60 buy level before having a small rally which enabled me to cover this position for a small gain at 90.73 and I am now flat. Today, I will again be a buyer on any dip lower to 89.90/90.40 with an 89.45 stop. If I am taken long I will have a T/P level at 90.75.
Despite the ECB announcing a smaller than expected Stimulus the DAX held in yesterday and I am still flat. I am not going to chase the market higher. As I go to press the DAX is selling off and I will now lower my buy level to 12995/13075 with a lower 12915 stop.
I am still flat the FTSE as the market just missed my sell-level before falling into the close and I am still flat. Given how overbought the FTSE is trading I will continue to be a seller from 6620/6680 with the same 6735 ‘’Closing Stop’’.
Dow Rolling Contract
Frustratingly, the Dow missed my 29850 buy level by 20 points before rallying over 150 points and I am still flat. I am reluctant to chase the market higher especially as I have a nearby buy level in the S&P. Therefore, I will lower my buy level to 29550/29750 with a 29395 stop. If I am taken long I will have a T/P level at 29920.
The NASDAQ held the key 12200 support level as outlined in yesterday’s Daily Commentary before rallying to my 12400 sell level. Subsequently the NASDAQ traded lower to my 12360 revised T/P level and I am now flat. The NASDAQ has resistance from 12460/12540 where I will be a seller with a 12605 stop. If I am taken short I will have a T/P level at 12410. The NASDAQ has strong support from 12100/12180 where I will be a buyer with a 11995 wider stop. If I am taken long I will have a T/P level at 12230.
Unfortunately, the Bund made a high at 178.52, just missing my 178.55 initial sell level, before the market sold off into the close. I am still flat and I will now lower my sell level to 178.45/178.95 with a 179.32 stop.
Gold Rolling Contract
After selling off $40 on Wednesday, Gold traded in a narrow range yesterday and I am still flat. Ahead of the weekend I will lower my buy level to 1790/1805 with a 1778 stop.
Silver Rolling Contract
I am still flat and today I will raise my buy level slightly to 22.90/23.50 with a higher 22.45 stop.