U.S. Equity Markets finished a week of duelling tariff headlines on a high note, as investors tried to anticipate the next moves in the trade war with China. Ten-year Treasury yields gained, while the US Dollar rose and West Texas crude held above $57 a barrel. The S&P 500 Index ticked up to a new closing high Friday, surpassing a record set the previous session and registering its fifth consecutive weekly gain, sparked by optimism that global growth troubles are dissipating. Tech shares and health-care stocks led advancers, while energy and utilities slid. The Dow Jones Industrial Average ended the session little changed, while the Nasdaq Composite also reached a record. Investors have been whipsawed the previous two days amid an onslaught of contradictory headlines about progress toward an interim deal in the U.S.-China trade war. Officials from the two countries both said Thursday that a phase-one agreement would feature pledges to roll back tariffs on each-others’ goods in phases, but President Donald Trump said Friday that the U.S. hasn’t agreed to a rollback, dimming hopes for a preliminary trade deal anytime soon.
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Insurance and financial companies weighed on the Stoxx Europe 600 Index, but the gauge still scored a weekly gain as well. China’s exports declined less than expected in October as optimism rose about an interim trade deal, though imports contracted for a sixth straight month. The offshore Yuan edged lower though stayed stronger than 7 per Dollar. Elsewhere, an early rally for Asian stocks fizzled, leaving most shares down in the region. Hong Kong equities were among the worst performing after the death of student protester threatened to inflame demonstrations planned for this weekend.
The S&P 500 Index increased 0.3% to close at 3093.
The Dow Jones Industrial Average closed flat at 27.681.
The Stoxx Europe 600 Index fell 0.3% to close at 405, which is the first retreat in more than a week.
Germany’s DAX Index decreased 0.5% to 13,228.
The MSCI Emerging Markets Index sank 0.9% to 1064, the biggest dip in more than two months.
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index closed 0.2% higher at 1204, the highest in almost three weeks.
The Euro fell 0.3% to $1.1020.
The British Pound sank 0.3% to $1.2783, hitting its weakest level in more than three weeks on its fifth consecutive decline.
The Japanese Yen strengthened 0.1% to 109.15 per dollar.
The yield on 10-year Treasuries increased two basis points to 1.94%, the highest in more than 14 weeks.
The two-year rate was unchanged at 1.67%.
Germany’s 10-year yield declined three basis points to -0.26.
Britain’s 10-year yield was unchanged at 0.795%.
West Texas Intermediate crude gained 0.50% to $57.50 a barrel.
Gold depreciated 0.7% to $1,458 an ounce, the weakest in nearly four months.
This morning on the Economic Front we have UK GDP, Trade Balance, Industrial/Manufacturing Production and Total Business Investment at 9.30 am. With the exception of the Stock Market most U.S Markets and Banks are closed for the Veterans Day Holiday.
December S&P 500
The S&P traded in a narrow range on Friday before having a late rally into the close. While today is Bank Holiday in the US where most markets are closed for the Veterans Day Holiday the stock market is open with normal trading hours. Worryingly for the bulls the McClellan Oscillator again closed in negative territory with a -17 print despite both the NASDAQ and S&P closing at new all-time highs. This should not be happening in a normal market plus the fact that the US Indices are trading at the top of their respective Daily Bollinger Bands and Williams Index also has me on the look-out for some sort of reversal. Today I will leave my 3101/3115 sell level unchanged with the same 3124 stop. I will also be a small buyer on any dip lower to 3063/3073 with a 3057 stop.
The Euro closed at 1.1020 on Friday, 150 points lower than the previous Friday’s high. I am still flat and I will continue to be a small seller from 1.1070/1.1120 with a 1.1155 stop. The Euro has strong support from 1.0940/1.0980 and I will be a buyer on any dip to this area with a 1.0895 stop.
December Dollar Index
No Change as I am still a seller from 98.30/98.70 with a 99.05 stop.
The DAX had its first fall in five sessions on Friday and I am still flat. So far the 13320/13390 resistance area is proving difficult to break. Today I will be a seller on any rally to this area with a 13435 tight stop.
I am still flat the FTSE and today I will now lower my buy level slightly to 7250/7290 with a 7215 stop. Given the weakness of Sterling I still do not want to be short the market at this time.
Dow Rolling Contract
Finally, we saw some weakness in the Dow with the market trading to an intra-day low of 27572 and this move lower enabled me to cover my 27690 short position at my revised 27630 T/P level and I am now flat. Today I will again look to sell the market on any further rally to 27810/27960 with a 28070 stop. I still do not want to be long the Dow at this time.
I am still flat the NASDAQ which just like the S&P had a late rally to close at a new all-time high. Today I will raise my NASDAQ sell level slightly to 8295/8355 with an 8390 tight stop. I still do not want to be long the NASDAQ at this time.
My Bund plan worked well with the market trading lower to my 169.25 buy level before rallying to my 169.55 T/P level and I am now flat. Today I will again look to buy the market on any dip lower to 169.00/169.40 with a 168.65 stop.
Gold Rolling Contract
I was lucky on Friday as Gold rallied to my 1471 T/P level on my latest 1464 long position before falling to test the September low of 1459. I am still flat and today I will again look to buy the market on any dip lower to 1438/1448 with a 1429 stop.
Silver Rolling Contract
While I was lucky with my Gold T/P level, silver was the complete opposite as the market quickly stopped my out of Thursday 17.40 long position at 16.85 and I am now flat. Silver has strong support from 16.00/16.40 which must hold or else we could see a further acceleration to the downside. Today I will be a buyer on any dip to this area with a 15.65 stop. If I am taken long I will have a T/P level at 16.65.