U.S. Equity Markets took a small breather after reaching new highs on Monday, finishing the day lower, led by the Dow which closed with a loss of 0.56%. Reimposed COVID-19 restrictions spooked investors. California Governor Gavin Newsom said the State was pulling the emergency brake, reinstituting bans on indoor businesses, instituting a mask mandate, and considering a curfew. New Jersey and Philadelphia also brought back restrictions to slow the spread of the virus. In terms of Economic data, October Retail sales rose, but missed estimates. This sparked concerns over slowing consumer spending without another stimulus package. But Industrial Production for October and the NAHB Housing Market Index for November both beat estimates. Federal Reserve Chairman Jerome Powell also spoke, saying that the central bank won’t pull back its emergency tools anytime soon. This is a good indication that the Fed will continue to act to support the U.S. economy. Euroepan Indices also closed lower. Irish Foreign Minister Simon Coveney said he hoped a post-Brexit trade deal between the European Union and Britain could be reached in the next couple of weeks. German Chancellor Angela Merkel and State leaders were said to agree on delaying a decision on new Coronavirus restrictions until November 25. Bank of England Governor Andrew Bailey said the Central Bank’s Quantitative Easing measures will prevent unwanted tightening in financial markets. French Health Minister Olivier Véran said the Nation was regaining control over the Coronavirus, but cautioned that it’s not yet ready to ease restrictions. Elsewhere, Oil closed flat on reports that OPEC was set to extend its production cuts into 2021 to combat rising crude inventories.
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The S&P 500 closed 0.48% lower at a price of 3609.
The Dow Jones Industrial Average closed 167 points lower for a 0.56% loss at a price of 29,783.
The NASDAQ 100 closed 0.30% lower a price of 11,977.
The Stoxx Europe 600 Index closed 0.4% lower.
The MSCI Asia Pacific Index rose 0.4%.
Yesterday, the Nikkei closed 0.42% higher at a price of 26,014 – A NEW 29 YEAR HIGH
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.1% higher at $1.1870.
The British Pound closed 0.6% higher at $1.3256.
The Japanese Yen closed 0.3% higher at 104.17 per dollar.
The yield on 10-year Treasuries closed six basis points lower at 0.86%.
Germany’s 10-year yield closed two basis points lower at -0.56%.
Britain’s 10-year yield closed two basis points lower at 0.33%.
The Bloomberg Commodity Index closed 0.3% higher.
West Texas Intermediate closed 0.17% higher at $41.32 a barrel.
Gold closed unchanged at $1880 an ounce.
This morning on the Economic Front we have UK CPI, PPI and Retail Price Index at 7.00 am. This is followed by Euro-Zone CPI at 10.00 am. Next, we have U.S Building Permits and Housing Starts at 1.30 pm. Finally, at 6.15 pm we have a speech from Fed Member Williams.
December S&P 500
Frustratingly, the S&P just missed my 3583 buy level with a 3584 low pring before rallying to an afternoon high at 3620 and I am still flat. Given how overbought the S&P is trading I am reluctant to chase the market higher and I will only raise my buy level slightly to 3571/3587 with a higher 3559 ‘’Closing Stop’’. Meanwhile I will continue to be a seller from 3640/3655 with the same 3671 stop.
The Euro traded in a narrow range yesterday and I am still flat. I will leave my 1.1780/1.1820 buy level unchanged with the same 1.1735 stop. If I am taken long I will have a T/P level at 1.1855.
December Dollar Index
No Change as I am still a small buyer from 91.80/92.20 with a 91.35 stop. If I am taken long I will have a T/P level at 92.55.
I am still flat the DAX which fell shy of my initial 13005 buy level before having a small rally into the close. Given the strength of the Euro, I will now lower my buy level to 12880/12960 with a 12795 stop.
I am still flat and I will now lower my sell level to 6370/6440 with a lower 6505 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 25540 buy level before rallying 300 points. Unfortunately, I covered this long position too early at 25620 and I am still flat. Today I will again be a buyer on any dip lower to 25290/25490 with the same 29175 stop. My only interest in selling the Dow is still on a further rally higher to 30200/30400 with the same 30545 ‘’Closing Stop’’.
The NASDAQ traded in a narrow range since I posted 24 hours ago and I am still flat. I will continue to be a buyer from 11780/11880 with a 11695 stop. If I am taken long I will have a T/P level at 11965.
The BUND continues to be a buy on dips as the theme of Central Banks buying bonds on any sell-off continues despite the insane low yield. I will now raise my buy level to 174.30/174.80 with a 173.85 stop.
Gold Rolling Contract
No Change as I am still a buyer from 1846/1862 with the same 1833 stop.
Silver Rolling Contract
I am still flat as Silver continues to trade heavy. I will now lower my buy level to 23.10/23.70 with a lower 22.65 stop.